Water Damage Restoration Insurance – Cost and Coverage

Whenever you budget the expenses of your business, Water Damage Restoration 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 liability 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 Water Damage Restoration enterprise, you must consider how much financial danger you are taking on.

If your Water Damage Restoration 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 consequences of their actions. 

In this article, we are giving very general guidelines for startup businesses to outline 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 Water Damage Restoration business?

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

Your Water Damage Restoration business is not protected 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 Montana, 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 right 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 Water Damage Restoration operations, you can’t escape 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 limited liability company, all of that liability belongs to you alone.

What does Water Damage Restoration insurance protect you from?

For your Water Damage Restoration business, the most important sorts of insurance are meant 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 explain the most important points any Water Damage Restoration business owner should remember when negotiating the insurance needed.

The main headings of insurance for your Water Damage Restoration businesses are liability insurance, commercial insurance, asset insurance and workers compensation insurance.

Liability insurance

General liability insurance

Any Water Damage Restoration business is dealing directly with customers, and that means you usually 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 Water Damage Restoration business protects you against claims coming from injury to clients or damage to their property.

It protects your Water Damage Restoration business from the claims themselves and in addition to any associated court costs and legal fees of the lawsuits.

In many cases, it can also 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 Water Damage Restoration 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 Water Damage Restoration insurance operations.

Professional liability insurance for your Water Damage Restoration business

In the event where a client alleges some negligence, errors, or omissions in how you conducted your Water Damage Restoration business for them, you can quickly be involved in a court case.

Even if the lawsuit 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 Water Damage Restoration business should have enough professional liability insurance to cover a once-off claim of $25,000, with annual cover of $50,000.

See the table in the cost of Water Damage Restoration insurance section below for average prices of professional liability insurance for your Water Damage Restoration operations.

Product liability insurance

Whatever goods you sell or advice you give about the goods, you are running a risk that buyers may claim that the results didn’t meet your description of function, or that your guidance 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 responsible for results caused by products claimed to be defective.

To cover yourself against any following lawsuit, you need Product liability insurance for Water Damage Restoration

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 Water Damage Restoration business

Take care! – most policies for private vehicle insurance do not cover any happening like theft or accidental damage when the vehicle 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 direct commercial vehicle insurance package.

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

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

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

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

Tools and Equipment insurance

Since your Water Damage Restoration business needs specialized and costly equipment, you know 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 wipe-out 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 everything needed to keep your Water Damage Restoration 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 Water Damage Restoration business’ equipment.

Commercial Property insurance

Any Water Damage Restoration business that owns or rents space in a building should have a commercial property insurance policy.

If you own the space, you certainly have a substantial capital investment, as well as 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 natural occurrences like fire and storms, and against man-made damages like theft and vandalism.

If your Water Damage Restoration business operates in areas of high risk, like Texas or Georgia, additional 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 Water Damage Restoration business premises, there is a need for more additional cover than in warmer climes.

Whereas 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 Water Damage Restoration insurance section below to give some estimate of the average prices per million dollars of property insurance for your Water Damage Restoration business.

Temporary insurance by month, week or day for your Water Damage Restoration business

Is your Water Damage Restoration business working part-time or casually, or is the level of business seasonal?

Using short-term insurance makes perfect sense. Business insurance by the month, day, or week – temporary insurance for Water Damage Restoration – are special policies where you can cover a specific 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 identical risk cover.

The key feature of short-term insurance is that you buy 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 larger business activity, get the existing cover improved.

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

Business Owners Policy (BOP) for your Water Damage Restoration business

You have the chance to combine a few 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 amalgamating 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 mostly the right choice for small and medium-sized Water Damage Restoration businesses, such as yours.

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

BOPs cannot cover your professional liability or commercial vehicle risks.

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

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

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

Workers Compensation insurance for your Water Damage Restoration business employees

In most states, it is mandatory to have workers compensation insurance when your Water Damage Restoration 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 include 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 required 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 cannot get your workers compensation obligations from private insurance providers.

Workers compensation premiums are worked out 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 Water Damage Restoration insurance need is unique, there are enough examples of usual 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 gathered for the main types of insurance your Water Damage Restoration businesses needs.

Cost of insurance for your Water Damage Restoration operations depends on many different factors.

We have calculated these figures for small self-employed Water Damage Restoration businesses.

In larger states like New York, premiums are generally about 20%-30% higher than national averages, whereas in smaller states like New Mexico, they will be about 20%-30% cheaper.

The location and size and type of your Water Damage Restoration 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.

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

Another useful source of information is the local Better Business Bureau in your town.

FAQ

What is small business insurance for Water Damage Restoration operations?

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

Does my Water Damage Restoration 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.

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

What does a small Water Damage Restoration business insurance policy cover?

Liability insurance provides protection against lawsuits or claims filed by a client 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 best policies for Water Damage Restoration insurance.

How much will Water Damage Restoration business insurance cost?

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

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

You can search for more information insurance for Water Damage Restoration, in the search box below, and follow the relevant links.

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