Stock Brokerage Firms Insurance – What Kind and at What Cost

Whenever you budget the expenses of your business, stock brokerage firms insurance must be high on the list because you can’t always know exactly what is going to happen in the future.

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 brokerage firms enterprise, you must consider how much financial danger you are taking on.

If your stock brokerage firms business runs without proper insurance, you are taking a tremendous 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. 

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

The question is, can you afford to NOT have insurance for your stock brokerage firms business?

What this means, for any stock brokerage firms 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 brokerage firms 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 New Jersey, there are specific monetary levels that limit the amount a court can award in any case against the state.

In a court case, it’s purely the privilege of the jury to award whatever amount they deem appropriate, even sometimes giving a claimant more than they have sued for.

When you are running your stock brokerage firms operations, you can’t deny responsibility for the consequences of your actions.

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

What does stock brokerage firms insurance protect you from?

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

Also there are some legal kinds of insurance that various states require.

In the next few paragraphs, we will outline the most important points any stock brokerage firms business owner should know when negotiating the insurance needed.

The main types of insurance for your stock brokerage firms businesses are liability insurance, commercial insurance, asset insurance and workers compensation insurance.

Liability insurance

General liability insurance

Any stock brokerage firms business is dealing directly with other people, and that means you generally have the danger that some accident can happen to them personally or else something of theirs can be spoiled.

In such a case, they can demand compensation.

General liability insurance policy for your stock brokerage firms business insures you against claims coming from injury to clients or damage to their property.

It protects your stock brokerage firms business from the claims themselves and in addition 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 average level of general liability insurance for your stock brokerage firms business would be with a cap of $1 million for a single event 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 brokerage firms insurance operations.

Professional liability insurance for your stock brokerage firms business

In the event where a buyer alleges some negligence, errors, or omissions in how you conducted your stock brokerage firms business for them, you can quickly face a law suit.

Even if the case against you is decided in your favor, the cost of defense can be substantial, and the impact on your reputation can be damaging.

Most small stock brokerage firms 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 brokerage firms insurance section below for average prices of professional liability insurance for your stock brokerage firms operations.

Product liability insurance

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

You need to be aware of the particular laws of product liability in your own state.

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

To cover yourself against any likely lawsuit, you need Product liability insurance for stock brokerage firms

Only you can know exactly how much insurance you must have.

Best advice is to contact experienced insurance agents, brokers or company representatives for guidance.

Commercial insurance

Commercial vehicle insurance for your stock brokerage firms business

Beware! – practically all policies for private vehicle insurance do not cover any event like theft or accidental damage when the car is being used for business purposes.

The best 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 car policies guarantee the value of any vehicle in case of accident, malicious damage, fire, or theft.

In addition, in case of any accident, the car itself, the content and any legal bills, medical expenses, and property damage is covered if your car is involved in an accident.

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

The necessary value of the insurance is worked-out for the depreciated value of the vehicle, and your declared level of cover of contents. 

Tools and Equipment insurance

Since your stock brokerage firms business needs specialized and dedicated equipment, you can appreciate how much it can cost to replace it in case of any damage, loss, or theft.

The tools may be subject to malicious damage, deliberate fire, theft, other such unexpected acts.

In addition, acts of nature like lightning strikes, hurricanes, earthquakes, and other highly damaging natural events can destroy your whole business in one stroke.

Unless you can afford to immediately replace such unique 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 brokerage firms business running.

It is hard to advise how much equipment insurance you need – it’s basically dependent on how much you have invested in your stock brokerage firms business’ equipment.

Commercial Property insurance

Any stock brokerage firms business that owns or rents space in a building must have a commercial property insurance policy.

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

Your physical building location should carry insurance coverage for the value of the premises and contents against unexpected occurrences like fire and storms, and against man-made damages like theft and vandalism.

If your stock brokerage firms business operates in areas of high risk, like Florida or South Carolina, extra coverage may be needed for earthquakes and hurricanes or tornadoes.

In other states like Washington, where intense cold snaps can cause damage to outer coverings of stock brokerage firms business premises, there is a need for more extra cover than in warmer climes.

Because the level of cover depends completely 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 brokerage firms insurance section below to give some idea of the average prices per million dollars of property insurance for your stock brokerage firms business.

Temporary insurance by month, week or day for your stock brokerage firms business

Is your stock brokerage firms 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 brokerage firms – are special policies where you can cover a designated period when you want to be covered.

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

The essential 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 better business activity, get the existing cover increased.

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

Business Owners Policy BOP for your stock brokerage firms business

You have the option to combine most 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 protect you if any claims of injury or property damage are made.

It is frequently the right choice for small and medium-sized stock brokerage firms businesses, such as yours.

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

BOPs do not cover your professional liability or commercial vehicle cover.

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

The normal business that is eligible for a BOP policy must have no more than one hundred employees, and maximum five million dollars in annual sales.

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

Workers Compensation insurance for your stock brokerage firms business employees

In most states, it is mandatory to have workers compensation insurance when your stock brokerage firms business has one or more employees.

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

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

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

Some states, such as North Dakota, Ohio, Washington, West Virginia, and Wyoming only allow 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 rates are computed 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 brokerage firms insurance need is unique, there are enough examples of standard quotes from insurance companies for us to give approximate guidelines, including what are the cheapest rates offered.

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

The list below is of annual premiums we have researched for the main types of insurance your stock brokerage firms businesses needs.

Cost of insurance for your stock brokerage firms operations depends on many different factors.

We have calculated these figures for small freelance stock brokerage firms businesses.

In larger states like New York, premiums are generally about 20%-30% higher than national averages, while in smaller states like New Mexico, they usually are about 20%-30% less.

The location and size and type of your stock brokerage firms business can have a big effect on the cost of different policies.

You should talk to professional insurance agents and brokers, or insurance company representatives.

Also you can let the internet do the work for you by looking for insurance companies near where your business is located.

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

FAQ

What is small business insurance for stock brokerage firms operations?

This is a wide term used to describe common insurance policies designed to protect stock brokerage firms business owners from risks like bodily injury, property damage, claims of negligence.

Does my stock brokerage firms business have to have insurance?

Some of the kinds of insurance are not mandatory for you to open 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 brokerage firms business insurance policy cover?

Liability insurance provides coverage against lawsuits or claims filed by a third-party for bodily injury, property damage, or negligence.

The specific cover will vary based on your own operations.

See the table in the costing section above for average prices of the most common policies for stock brokerage firms insurance.

How much will stock brokerage firms 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.

You can search for more information insurance for stock brokerage firms, in the search box below, and follow the relevant links.

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