Stock Broker insurance – what kind and at what cost

Whenever you budget the expenses of your business, Stock Broker insurance must be high on the list because you can’t always know exactly what can happen in the future.

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With the protection provided by general insurance and all the other kinds of insurance we will tell you about, you can protect your business and yourself in case something unexpected happens.

Like any business owner, for your Stock Broker enterprise, you must consider how much financial risk you are taking on.

If your Stock Broker business runs without proper insurance, you are taking an enormous chance not just of losing some money but of a total wipe-out.

This is because the laws in every state are very strict in enforcing liability on the owners of businesses for the results of their actions. 

Stock Broker Insurance

In this article, we are giving very general guidelines for growing businesses to explain what the main kinds of insurance that you need are, and where possible, a rough guide to how much you can expect to pay.

The question is, can you afford to NOT have insurance for your Stock Broker business?

What this means, for any Stock Broker business owner, is that if some customer claims that your business caused them some physical or economic damage, a court can award damages far beyond the total size of your business.

Your Stock Broker business is not harbored by laws in the same way as states are, where legislation can place a “cap” on the maximum level of liability.

In some states, like Texas, there are specific monetary levels that limit the amount a judge can award in any case against the state.

In a court case, it’s purely the duty of the jury to award whatever amount they deem appropriate, even sometimes giving a plaintiff more than they have claimed.

When you are running your Stock Broker operations, you can’t deny responsibility for the outcomes of your actions.

Even more importantly, unless you have spent up-front the money necessary to have your business running as an LLC, all of that liability belongs to you as an individual.

What does Stock Broker insurance protect you from?

For your Stock Broker business, the most important types of insurance are intended to cover the risks to your business from accidents, from unexpected events, and from mistakes.

As well there are some mandatory kinds of insurance that various states require.

In the next few paragraphs, we will describe the most important points any Stock Broker business owner should know when negotiating the insurance needed.

The main types of insurance for your Stock Broker businesses are liability insurance, commercial insurance, asset insurance and workers compensation insurance.

Liability insurance

General liability insurance

Any Stock Broker business is dealing directly with other people, and that means you always have the danger that some accident can happen to them personally or else something of theirs can be damaged.

In such a case, they can demand compensation.

General liability insurance policy for your Stock Broker business covers you against claims coming from injury to visitors or damage to their property.

It protects your Stock Broker business from the claims themselves and also to any follow-on court costs and legal fees of the lawsuits.

In many cases, it will even help you to qualify for extra business from city and state organizations, where contracts require proper liability insurance.

The usual level of general liability insurance for your Stock Broker business would be with a upper limit of $1 million for a single submission and a total of $2 million for the whole year.

See the table in the costing section below for average prices of general liability insurance for your Stock Broker insurance operations.

Professional liability insurance for your Stock Broker business

In the event where a client alleges some negligence, errors, or omissions in how you conducted your Stock Broker business for them, you can quickly have to fight a court case.

Even if the matter against you is judged in your favor, the cost of defense can be large, and the impact on your reputation can be damaging.

Almost all small Stock Broker business should have enough professional liability insurance to cover an individual claim of $25,000, with annual cover of $50,000.

See the table in the cost of Stock Broker insurance section below for average prices of professional liability insurance for your Stock Broker operations.

Product liability insurance

Whatever goods you sell or advice you give about the goods, you are running a risk that customers may claim that what they received didn’t meet your description of function, or that your advice was basically incorrect.

You need to know the specific laws of product liability in your own state.

For example, in California, all businesses in the supply chain can be held culpable for injuries caused by products claimed to be defective.

To cover yourself against any following lawsuit, you need Product liability insurance for Stock Broker

Only you can determine exactly how much insurance you should get.

Best advice is to talk to experienced insurance agents, brokers or company representatives for support.

Commercial insurance

Commercial vehicle insurance for your Stock Broker business

Take care! – practically all policies for private vehicle insurance do not cover any happening like theft or accidental damage when the van is being used for business purposes.

The proper way to make sure that your vehicle is insured for both its own value, and the valuable contents, is by taking out a proper commercial vehicle insurance package.

Commercial van policies guarantee the value of any vehicle in case of accident, malicious damage, fire, or theft.

Also, in case of any accident, the truck itself, the content and any legal bills, medical expenses, and property damage is guaranteed if your van is involved in an accident.

Most states, other than Virginia and New Hampshire, insist on this type of insurance.

The required value of the insurance depends on the depreciated value of the vehicle, and your intended level of cover of contents. 

Tools and Equipment insurance

Since your Stock Broker business needs specific and dedicated equipment, you will realize how much it can cost to replace it in case of any damage, loss, or theft.

The gear may be subject to malicious damage, deliberate fire, theft, other such unpredicted acts.

As well, acts of nature like lightning strikes, hurricanes, earthquakes, and other highly damaging natural events can eliminate your whole business in one stroke.

Unless you can afford to immediately replace such specific gear quickly out of your own pocket, you should have full-level equipment insurance so that you can immediately buy whatever needed to keep your Stock Broker business running.

It is hard to advise how much equipment insurance you need – it’s essentially dependent on how much you have invested in your Stock Broker business’ equipment.

Commercial Property insurance

Any Stock Broker business that owns or rents space in a building should have a commercial property insurance policy.

If you own the building, you certainly have a substantial capital investment, in addition to a big liability if there’s a mortgage.

Every physical building location needs to carry insurance coverage for the value of the premises and contents against accidental occurrences like fire and storms, and against deliberate damages like theft and vandalism.

If your Stock Broker business operates in areas of high risk, like California or Georgia, additional coverage may be needed for earthquakes and hurricanes or tornadoes.

In other states like Rhode Island, where unlimited cold snaps can cause damage to outer coverings of Stock Broker business premises, there is a need for more supplementary cover than in warmer climes.

Although the level of cover depends mainly on the value of the property, it’s not possible to say what cover your need, but we have been able in the table in the cost of Stock Broker insurance section below to give some estimate of the average prices per million dollars of property insurance for your Stock Broker business.

Temporary insurance by month, week or day for your Stock Broker business

Is your Stock Broker business working part-time or casually, or is the level of business fluctuating?

Using short-term insurance makes perfect sense. Business insurance by the month, day, or week – temporary insurance for Stock Broker – are special policies where you can cover a nominated period when you want to be covered.

By only paying for that period of cover, you will save by having less premiums but still having identical risk cover.

The important feature of short-term insurance is that you purchase the cover for a defined period – a specific date, or a week or month starting on a specific date, for example for 30 days beginning on the specified date.

When you are expecting periods of higher business activity, get the existing cover raised.

Talk to your insurance agent, broker or the company’s representatives to see what options you have.

Business Owners Policy BOP for your Stock Broker business

You have the choice to combine several of the important kinds of small business insurance in one policy that is known as the business owner’s policy – BOP.

A BOP combines commercial property and public liability insurance by packaging these coverages into one insurance policy, which can save you money.

BOP insurance will shield you if any claims of injury or property damage are made.

It is frequently the right choice for small and medium-sized Stock Broker businesses, such as yours.

There are a few limits that will determine whether BOP is suitable for your own business.

BOPs cannot cover your professional liability or commercial vehicle cover.

Also, the size of your business will dictate whether you are permitted to take out BOP cover.

The typical business that is eligible for a BOP policy must have less than one hundred employees, and maximum five million dollars in annual revenue.

As well, you must separately take out the necessary worker’s compensation, health and disability insurance as determined for your state.

Workers Compensation insurance for your Stock Broker business employees

In almost all states, it is mandatory to have workers compensation insurance when your Stock Broker business has one or more employees.

Workers compensation insurance covers the business against any costs that arise if any hired hand experiences an injury or becomes sick as a result of work.

The benefits provide for medical expenses, death benefits, lost wages, and vocational rehabilitation.

Failure to meet a state’s regulations in this regard can leave you as the employer having to pay penalties levied by the states.

Some states, such as North Dakota, Ohio, Washington, West Virginia, and Wyoming only permit coverage from the government-run monopoly state funds.

In these states, you may not obtain your workers compensation obligations from private insurance companies.

Workers compensation premiums are calculated based on the employee’s pay, and usually come out at around $1.00 per $100 per month.

However, you must refer to the relevant authorities in your state.

Average costs of these types of insurance

Although every Stock Broker insurance level is unique, there are enough examples of standard quotes from insurance companies for us to give rough guidelines, including what are the cheapest rates offered.

Of course, you should always check with an agent what’s relevant for your business.

The list below is of annual premiums we have collected for the main types of insurance your Stock Broker businesses needs.

Types of insurance Price range
Commercial insurance $919 – $2179
Product liability insurance $289 – $864
Commercial vehicle insurance $1839 – $2993
General liability insurance $563 – $880
Equipment insurance $394 – $1079
Public liability insurance $330 – $567

Cost of insurance for your Stock Broker operations depends on many different factors.

We have calculated these figures for small freelance Stock Broker businesses.

In larger states like California, premiums are generally about 20%-30% higher than national averages, while in smaller states like Utah, they usually are about 20%-30% lower.

The location and size and type of your Stock Broker business can have a big effect on the cost of different policies.

You should discuss with professional insurance agents and brokers, or insurance company representatives.

As well you can let the internet do the work for you by searching for insurance companies near where your business is located.

Another reliable source of information is the local Better Business Bureau in your city.

FAQ

What is small business insurance for Stock Broker operations?

This is an umbrella term used to describe common insurance policies designed to protect Stock Broker business owners from risks like bodily injury, property damage, claims of negligence.

Does my Stock Broker business have to have insurance?

Some of the types of insurance are not mandatory for you to run your business, but they can protect you from risks in your business operations.

Several other forms are required by state law, such as workers compensation and vehicle insurance.

What does a small Stock Broker business insurance policy cover?

Liability insurance provides insurance against lawsuits or claims filed by a customer for bodily injury, property damage, or negligence.

The precise cover will vary based on your own operations.

See the table in the costing section above for average prices of the recommended policies for Stock Broker insurance.

How much will Stock Broker business insurance cost?

As well as the size of the business, several other factors, such as location and claims history, are used to determine your policy’s cost.

You should consult with professional insurance agents and brokers, or insurance company representatives.

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