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Are you running a business in Massachusetts or planning on opening your doors soon? Already feeling overwhelmed with expenses and are stressed about having to add insurance to the list? We understand the pressure! As business owners, it’s our job to ensure we protect every asset - in order for our company and clientele to be safely covered in the event of a claim. At Berry Insurance, we help to insure a number of businesses in diverse industries across Massachusetts and beyond! So whether you’re selling cupcakes in Springfield or knick knacks down the Cape, our agency can help you! Plus as a business owner ourselves, we deal with the complexities of business insurance daily. Below we’ll discuss what you can expect to pay for multiple types of business insurance (including general liability, auto, and workers’ compensation), what determines cost, and additional coverages you should know about. Table of contents: How much does business insurance cost? What factors influence the cost of business insurance? How much can I expect to pay for my Massachusetts business insurance? What insurance coverage does my business need? How much does business insurance cost? While a lot goes into determining the cost of insuring your business, it’s important to know the range you can expect to pay. Here are the cost ranges for the main types of business insurance coverage: Business owners policy (BOP): Comprising general liability and property insurance, annual premiums range from $233 for a home-based business to $80,000 for larger businesses with higher risk operations. Commercial auto: Annual premiums for commercial auto insurance can range from $1,500 for a private passenger vehicle to $40,000 for a larger company with many work vehicles. Workers compensation: Premiums for workers compensation policies can range from $282 for a basic nanny policy, for instance, to $100,000 or more for large corporations with higher-risk operations. What factors influence the cost of business insurance? Property insurance: Property insurance covers the actual structure of your business’ building and its contents, as well as the exterior features such as fencing, or signage. Premiums for property coverage are typically based on replacement value or actual cash value and take into account the location, cost to rebuild, building construction, type of materials, sprinklers, alarm systems, distance to the coast, and the limits and deductibles you select. General liability: General liability covers costs arising from claims against businesses resulting from their operations, such as property damage, physical injury, and personal injury, including libel and slander. Premiums for liability coverage are typically based on sales for the year, payroll, square foot of the premises or even average number of guests/attendees at the business, and the limits and deductibles you select. Commercial auto: Commercial or business auto insurance covers the cost of bodily damage or property damage caused by vehicles as well as physical damage of your own vehicles, just like personal car insurance does, but for commercially owned vehicles. Premiums for this type of policy are based on the number of vehicles owned by the company, the cost of the vehicles, where they are garaged, business operations, coverages inclusions, limits, and driver history. Workers compensation: Workers compensation covers wage replacement and medical payments to employees injured while performing job-related duties and protects companies from liability against employee claims. The cost of this coverage is usually based on the number of employees in the company, estimated yearly payrolls, and job duties/business operations, and the limits you select. How much can I expect to pay for my Massachusetts business insurance? While the cost of business insurance will vary greatly between companies, let’s look at a few realistic scenarios of what insurance could cost business owners. Small businesses, such as a singular residential house cleaner with no employees, no property, and no commercial vehicles, may only need to pay around $500 a year for business insurance; as they’d only require general liability coverage. If we instead take a larger business, such as an HVAC contractor. If the contractor has property limits of $60,000, general liability limits at $1M/$2M, a $625,000 payroll, and 10 vehicles they may pay around $60,000 per year for their business insurance coverage. Even larger corporations with more employees, vehicles, equipment, or higher risk (like a mechanical engineering company) could expect to pay around $250,000 each year. What insurance coverage does my business need? Above, we talked about the most common types of business insurance that nearly every business needs to buy, but there are more types. Depending on the specifics of your business, you may need one or more of the following more specialty coverages. These types of coverage typically will require you to spend additional money to get them - check out the links below for more information on the cost of coverages you’re interested in. Professional liability insurance: Also known as errors and omissions insurance, professional liability protects certain types of professionals from costs associated with accusations of negligence. Business umbrella insurance: Business umbrella insurance provides excess coverage on business liability insurance in the case of a lawsuit exceeding policy limits. Cyber and identity theft insurance: This insurance covers costs associated with a cyber attack or data breach. This includes malicious actions such as hacking, viruses, phishing, denial of service (DoS) ransomware, malware and more; but also data losses from incidents such as computer glitches, power surges, and accidental deletions. Flood insurance: For businesses at risk of floods, flood insurance provides coverage from damages caused by floods. Pollution insurance: Pollution insurance covers costs related to pollution caused by a business’ operations. Bonds: Commercial bonds are required in certain industries to protect the business and its customers from specific risks. Having one or more of these insurance policies would increase the amount you spend on insurance for your business. Protect your business with a comprehensive business insurance policy: We know your business is important to you, so it is crucial you protect it. While the combination of business insurance policies you need can sometimes be pricey, it’s worth the protection against even more costly incidents that can put you out of business. As I’m sure you can tell, the cost of business insurance can vary greatly depending on a variety of factors. The best way to know what you will need to pay is by reaching out to your agent or carrier. An agent, like our agents at Berry, can help you create a custom policy to protect your business without breaking the bank. Don’t have an agent or carrier yet? Check out this article about what to look for when selecting an agency or company.

Shopping for insurance can be overwhelming. Not only do you need the right coverage, but you also have to decide where to buy it from. From independent agents, captive agents, buying direct from insurance companies, and everything in between - there’s no shortage of options. With so many choices, how do you know what’s best for you? As an insurance agent and broker, our team at Berry Insurance is asked this question all the time. Keep reading to learn the key differences between each option, how they get paid, and how to determine which choice makes the most sense for you. Table of contents: What are the different ways to buy insurance? What’s the difference between an independent agent and a broker? How do insurance agents and brokers make money? Should I buy insurance directly from a carrier? Which option is best for me? What are the different ways to buy insurance? Insurance can be purchased several ways: Independent Insurance Agent An insurance agent represents (or has contracts with) several different insurance carriers, allowing them to: Shop for you Get you the best insurance policy for your needs Put your interests first. For example, an independent insurance agent can provide you auto insurance quotes from Safety Insurance, Mapfre (formerly Commerce) Insurance, and several others. This allows you to compare coverage and prices, and provides you an agent to work with directly during any claims. Captive Insurance Agent Unlike independent agents that represent multiple carriers, captive agents only work on behalf of a single carrier. This means that they can only provide you one quote, and cannot shop with any other insurance carriers on your behalf. For example, a State Farm agent can only sell you insurance from State Farm. Insurance Carrier/Buying Direct Instead of buying from an agent, you could purchase your policy directly from the insurance carrier. When you buy direct, you lose out on an agent to represent your best interests. For example, if you want a quote from GEICO, you can only get that by contacting them directly. This can be useful for some, but won’t provide multiple quotes, meaning you could lose out on additional coverages or savings from other carriers. To know which Massachusetts insurance carriers we recommend, check out this guide: 5 Best Personal Insurance Carriers in Massachusetts. InsureTech Some insurance carriers have partnered with various smart devices to allow you to obtain insurance estimates via the device. These are not firm quotes, but are able to give you an idea of costs. The downfall is that many of these are carrier-specific, and cannot be used to obtain multiple quotes at once. Associations Some associations have group discounts in place with certain insurance carriers. For example, if you are a Bryant University alumni, you might be eligible for a discount with Amica Insurance. Or if you have a Costco membership, you can obtain a discount through Ameriprise Insurance. Many insurance agents are also able to offer group discounts, so if you are active in any associations, be sure to let them know! What’s the difference between an independent agent and a broker? Sometimes in the insurance world, the terms “independent agent” and “insurance broker” are often used interchangeably. This makes sense, as both can: Obtain quotes for you from several insurance carriers Are paid via commission from the insurance carrier Have knowledge in a wide variety of insurance policies. (Though some insurance brokers may specialize in only one type of insurance policy – for example, health insurance.) However, an insurance agent has contracts in place with multiple insurance carriers and can sell the policies that they are contracted or appointed to sell. An insurance broker is typically someone who does not have a contract in place, but is still able to obtain quotes from multiple carriers. So why the distinction? Having the contract means that an insurance agent has the authority to issue your policy right away if you approve. A broker would not have that authority. There are some insurance agencies that operate both as independent agents and brokers. This means that they have contracts in place with several insurance carriers, and they also have relationships to be able to obtain quotes from many carriers that they do not have a contract with. Finding an agent like this allows you the broadest spectrum of choice in your insurance buying decision. How do insurance agents and brokers make money? Most insurance agencies and brokerages provide their services for free to their clients, as they are paid on commissions from the insurance carrier. That being said, many times the individual insurance agent or broker you work with is paid a salary. How an individual is compensated could be an important distinction for you to determine if they are motivated to represent your best interests first. Why? If an individual is paid a salary, they don’t have a financial interest in which insurance company they issue your policy with. But if they are paid on a commission, they could be more inclined to put your policy with an insurance company that pays a higher commission rate. Not everyone acts like this, but unfortunately it does happen. Knowing that the person you work with has your best interest at heart is vital to your decision. Should I buy insurance directly from a carrier? If insurance agents and brokers are paid a commission from the insurance carrier, you might think then that it would be cheaper for you to buy your insurance directly from the carrier. In fact, it may be quite the opposite. When you buy direct, you lose the advantage of choice. This means that you will now have to do all the shopping yourself, costing you time and effort in the process. You will also lose an unbiased expert to explain the coverage options and choices available to you. An independent agent will be able to thoroughly review the differences in the quotes you obtain so you can feel confident in whatever decision you make. When you buy direct, the insurance carrier cannot compare their quote to another, leaving you to figure it out on your own. Lastly, when you buy direct, you eliminate having a dedicated person there for you when you have questions, claims or need to review your coverages. Also, if you have a more complex situation for which you need insurance, buying direct may take you longer as you’ll need to figure out who the right carrier is to handle your needs. Okay, so which option is best for me? Unfortunately this answer will depend on your specific situation. If you already have an understanding of what coverages you need and want to be able to do your own research and comparisons, then buying direct might be the best option for you. However, if your insurance needs are more complex and you want guidance through the buying process with multiple quotes, then buying from an insurance agent is your best choice. In the end, the decision comes down to what is most important to you, your needs and your preferences. Being a smart shopper If you’ve struggled to compare insurance options, then you know how daunting it can feel to find the perfect coverage at the right price. Now that you know more about the pros and cons of buying from an agent vs. buying direct, you can make an informed decision while shopping for your next insurance policy. If you’re looking for expert guidance and personalized recommendations, look no further than our team at Berry Insurance! Contact our team today, or fill out our free personal insurance worksheet below to get started on your buying process!

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