Web Hosting insurance – cost and types of policies

Whenever you budget the expenses of your business, Web Hosting insurance must be near the top of the list because you can’t always know exactly what is going to happen in the future.

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

Like any business owner, for your Web Hosting enterprise, you must consider how much financial liability you are taking on.

If your Web Hosting business runs without proper insurance, you are taking a giant chance not just of losing some money but of a final wipe-out.

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

Web Hosting Insurance

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

The question is, can you afford to NOT have insurance for your Web Hosting business?

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

Your Web Hosting business is not sheltered by laws in the same way as states are, where laws 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 sued for.

When you are running your Web Hosting 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 a limited liability company, all of that liability belongs to you as an individual.

What does Web Hosting insurance protect you from?

For your Web Hosting business, the most important kinds of insurance are intended to cover the risks to your business from accidents, from unexpected events, and from mistakes.

In addition there are some official kinds of insurance that various states require.

In the next few paragraphs, we will explain the most important points any Web Hosting business owner should remember when negotiating the insurance needed.

The main categories of insurance for your Web Hosting businesses are liability insurance, commercial insurance, asset insurance and workers compensation insurance.

Liability insurance

General liability for your Web Hosting operations

Any Web Hosting business is dealing directly with members of the public, and that means you always have the danger that some accident can happen to them bodily or else something of theirs can be damaged.

In such a case, they can sue you for compensation.

General liability insurance policy for your Web Hosting business protects you against claims coming from injury to visitors or damage to their property.

It protects your Web Hosting business from the claims themselves and as well to any associated court costs and legal fees of the lawsuits.

In many cases, it should 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 Web Hosting 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 Web Hosting insurance operations.

Professional liability insurance for your Web Hosting business

In the event where a customer alleges some negligence, errors, or omissions in how you conducted your Web Hosting business for them, you can quickly face 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 Web Hosting 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 Web Hosting insurance section below for average prices of professional liability insurance for your Web Hosting operations.

Product liability insurance for your Web Hosting business

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

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

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

To cover yourself against any likely lawsuit, you need Product liability insurance for Web Hosting

Only you can know exactly how much insurance you need.

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

Commercial insurance

Commercial vehicle insurance for your Web Hosting business

Take care! – practically all policies for private vehicle insurance do not cover any event like theft or accidental damage when the van 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 designated commercial vehicle insurance package.

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

In addition, in case of any accident, the van 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, require this type of insurance.

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

Tools and Equipment insurance for your Web Hosting business

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

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

Also, 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 specialized gear quickly out of your own pocket, you must have full-level equipment insurance so that you can immediately buy any equipment needed to keep your Web Hosting business running.

It is impossible to advise how much equipment insurance you need – it’s essentially dependent on how much you have invested in your Web Hosting business’ equipment.

Commercial Property insurance for your Web Hosting operations

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

If you own the property, you probably 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 unexpected occurrences like fire and storms, and against man-made damages like theft and vandalism.

If your Web Hosting business works in areas of high risk, like Florida or North Carolina, 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 Web Hosting business premises, there is a need for more additional cover than in warmer climes.

Whereas 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 Web Hosting insurance section below to give some idea of the average prices per million dollars of property insurance for your Web Hosting business.

Temporary insurance by month, week or day for your Web Hosting business

Is your Web Hosting business working part-time or casually, or is the level of business variable?

Using short-term insurance makes perfect sense. Business insurance by the month, day, or week – temporary insurance for Web Hosting – 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 reduced premiums but still having identical risk cover.

The essential 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 increased.

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

Business Owners Policy BOP for your Web Hosting business

You have the chance 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 integrates 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 Web Hosting businesses, such as yours.

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

BOPs will not cover your professional liability or commercial vehicle risks.

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

The typical business that can take out a BOP policy must have fewer than one hundred employees, and not more than five million dollars in annual revenue.

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 Web Hosting business employees

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

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

The benefits cover 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 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 cannot obtain your workers compensation obligations from private insurance companies.

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

However, you must consult the relevant authorities in your state.

Average costs of these types of insurance

Although every Web Hosting 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 agent what’s relevant for your business.

The list below is of annual premiums we have gathered for the main types of insurance your Web Hosting businesses needs.

Types of insurance Price range
Equipment insurance $455 – $1400
Commercial vehicle insurance $1863 – $2612
Commercial insurance $1004 – $2383
General liability insurance $676 – $1101
Product liability insurance $247 – $898
Public liability insurance $312 – $565

Cost of insurance for your Web Hosting operations depends on many different factors.

We have calculated these figures for small self-employed Web Hosting businesses.

In larger states like California, premiums are generally about 20%-30% higher than national averages, but in smaller states like Utah, they can be about 20%-30% cheaper.

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

You should consult 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 good source of information is the local Better Business Bureau in your town.

FAQ

What is small business insurance for Web Hosting operations?

This is a general term used to describe standard insurance policies designed to protect Web Hosting business owners from risks like bodily injury, property damage, claims of negligence.

Does my Web Hosting 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.

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

What does a small Web Hosting business insurance policy cover?

Liability insurance provides insurance 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 best policies for Web Hosting insurance.

How much will Web Hosting 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 consult with professional insurance agents and brokers, or insurance company representatives.

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