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Individuals & Families | Business Insurance | General Liability | Learning Center | Home Insurance | Workers Compensation | homeowners insurance | individuals and families | Personal Umbrella Insurance

By: Corin Cook
September 14th, 2020

2020 sure has been the year of getting creative — especially when it comes to schooling. When the country shut down in March as a result of the COVID-19 pandemic, teachers, school officials and parents scrambled to come up with a plan for remote learning for the remainder of the school year. Now that school is back in session after summer break, parents, teachers, and students are taking even more innovative approaches to learning. Some students are back in the classroom part-time, others are remote full-time. But some parents have also opted for hiring private teachers or tutors, or conducting “teaching pods” gathering a small group of students together under a home school instructor. At Berry Insurance, most of us have kids taking a new approach to schooling this year. We’ve also had several clients inquiring if their insurance will cover their teaching pods or home tutoring.  Since this is obviously something we’ve never had to confront in the century we’ve been in business, we reached out to our carriers to find out if this type of situation would be covered under existing homeowners insurance or if it would require supplemental insurance. And well … we got some mixed answers.  Let’s dive into what we discovered. What’s the insurance risk with home instruction? Your home insurance covers a whole slew of incidents that could happen in your home. It covers property damage, medical payments to others, and personal liability (if someone sues you for injuries). The more people you have in your home (like students or teachers) the more you are at risk for one of these situations happening, and the more your insurance company will see you as a risk. While we like to assume nothing will ever happen in our homes, it can and does, so you need to make sure you are prepared with the right insurance coverage. Are home school instructors covered under homeowners insurance? Many of the insurance situations we’ve had to confront during the COVID-19 pandemic haven’t been straightforward and well … neither is this one. When we asked our carriers if home school instruction is covered under homeowner’s insurance, many said this type of situation wouldn’t be an insurance problem. Given the pandemic, insurance companies know people are having to make teaching adjustments and are likely to be lenient during related insurance claims. However, some carriers said they would at least need to have the situation noted on file. On the other hand, some carriers did not have the same outlook.  Certain carriers are treating this unique homeschooling scenario as essentially a daycare situation and are cancelling policies if they learn of it and not writing any new policies with that kind of exposure. They did say that if the homeowners get a commercial liability policy that covers all the exposures associated with the education/daycare center with a minimum liability limit that at least matches the limit on the homeowner policy, they can renew the policies. So whether or not your specific policy will cover this situation? We don’t really know. You’ll have to reach out to your insurance agent with your specific scenario to find out if you’re covered or if you need to make one of the following changes. You might need a commercial liability policy As we mentioned above, your insurance company might require you to get a commercial liability policy in addition to your personal liability coverage over your homeowners insurance. Business general liability insurance is a type of business insurance policy that covers claims made against your business from someone who experienced bodily injury or property damage. It can also provide coverage for injuries sustained from your product, claims for libel, slander or defamation, and claims filed by your employees or other 3rd-parties. Since hiring a teacher is technically a business operation, commercial insurance could be the only way to cover risks associated with the home teaching. While the cost of liability insurance can vary, we estimate it would cost around $250 – $750 a year for a policy covering one teacher. Commercial liability not needed? Our suggestion: personal umbrella insurance If you don’t need a commercial liability policy, our suggestion is to get an umbrella insurance policy if you don’t already have one. Sometimes known as excess liability or personal liability, umbrella insurance supplements a policyholder’s existing liability coverages, such as auto, homeowners, renters, and condo insurance. It offers an extension of the policyholders existing coverages. Umbrella insurance covers the costs of damages or legal defenses arising from incidents leading to property damage or injury when the policyholder is considered responsible. Specifically, it protects you and your assets if you are found liable for damages beyond what your underlying policies will cover. Having an instructor in your home, or having other children learn in your home automatically creates additional liability risks. If something were to happen and you were to be sued by the teacher or parents of other students, without umbrella insurance, you could be stuck out-of-pocket costs. In our opinion, it’s definitely worth it to buy the protection, especially because it is relatively affordable. A $1 million personal umbrella policy may cost between $160 and $300 per year.  As you increase policy limits beyond $1 million, the premium cost increases in smaller increments.  For example a $2 million policy might only cost 1.8 times the cost of the million dollar one (rather than double), a $3 million dollar policy might cost 2.55 times the million dollar policy (rather than three times) and a $10 million dollar policy might cost 8.9 times the million dollar policy (rather than ten times). You may also want personal injury coverage While it may already be included on your homeowner’s policy, if it is not, you might want to add personal injury coverage. Personal injury is an optional coverage which provides protection if someone were to sue you for libel, slander, or defamation. In today’s society (especially with the prominence of social media), the chances of these types of claims are much higher.  We recommend this coverage in general, but would especially suggest it if you are bringing teachers and other students into your home. You probably also need workers compensation If you have a nanny, tudor, teacher or something similar that you are paying to serve your family, you are technically their employer (unless they are employed by an agency), which means you need workers compensation insurance. Workers’ compensation insurance covers medical payments and a portion of lost wages for employees who become injured or ill due to work-related causes. It also protects the employer from liability for these work-related injuries or illnesses. In Massachusetts, all businesses (this includes individuals who employ home teachers) are required to have workers’ compensation insurance for their employees. Without coverage, employees could sue their employer for injuries or illness sustained on the job. For each person you employ, the base charge for workers comp is $141 per year. (With fees and state assessment charges, the total cost for one nanny on a $1 million policy is $285.) Protect your children and their educators We know you’ve already invested more than you should have had to into your child’s education this year, but don’t forget to invest in insurance to protect it all. While your homeowners insurance might be adequate for your new homeschooling situation, there’s a chance you will need an umbrella policy, commercial liability insurance, or workers compensation. And remember, how you need to change your insurance might not be the same as how the parents next door need to change their insurance. The best way to find out what you need is to contact your insurance agent so they can evaluate your specific situation. Even without having a home school instructor, remote learning alone may prompt changes to your insurance. Read this article to find out how remote learning will affect your personal insurance.

Blog Feature

Individuals & Families | Condo Insurance | Learning Center | Home Insurance | remote learning | Workers Compensation | Renters Insurance | personal insurance

By: Kaitlyn Pintarich
July 30th, 2020

With the new school year quickly approaching, many parents and families are finding themselves at a loss for how to handle the potential of online or remote learning this fall. I think we’d all agree that right now, we just feel utterly unprepared. And it’s no surprise. When schools shut down in the middle of March this year due to Coronavirus, we all hoped and prayed that this nightmare would be over by the new school year. But as we’re quickly approaching August, it is clear that we still have a ways to go. Many of us at Berry Insurance are parents, and are grappling with decisions for remote learning this fall. There are so many things to contemplate! Several of our clients have been reaching out for guidance, and I myself have been wondering what is best for my four young children. How will our children adjust? Will there be any social or behavioral effects? How will we manage our new roles as teachers, and potentially, as working parents?  But there is also one more question we have to grapple with – will remote learning impact my insurance coverage? And the answer is, yes, it potentially could. Let’s dive in. Remote Learning and Homeowners Insurance If your child will be remote learning in the fall, whether it’s elementary school, middle school, high school, or college, there may very well be a few adjustments that need to be made to your Massachusetts homeowners insurance policy. Computer Equipment If you’re like me, you may have had to purchase a few extra laptops this spring to enable your children to work online. If not, perhaps your school district supplied you with a school laptop. Or, your child might be provided a laptop as part of their college tuition costs. Regardless, it’s likely that the number of electronics has increased in your home. If that is the case, you may need to adjust your computer coverage. Many insurance companies provide a sub-limit of around $2,500 for computer coverage. If this limit would not be sufficient to replace your existing devices, you may want to increase this coverage. Cyber Protection In my last count, our family of six has a total of 20 computers, wifi printers, laptops, smartphones, ipads and smart TVs in our home. And I could be missing one or two. These devices are part of our everyday life and in some ways, especially when concerning remote learning, they are essential. But they also create new avenues for cyber hackers to access our network and steal information. Many insurance companies today have created home cyber protection coverages that can provide increased liability coverage to defend against these types of claims. A limit of $50,000 could cost you as little as $50 a year, and may be worth consideration if you have an increase in devices on your network. Personal Injury Coverage Remote learning has children involved with Google Classroom, Zoom and a host of other online learning platforms. Many of these platforms include chat features, and while we never want to think our children would say something bad on the internet – it happens. Trust me… Personal injury coverage on your homeowners policy will provide protection against claims for defamation, libel or slander made by you or your children. Unfortunately we live in a technological world where even the best intended comments can be misconstrued very easily. Adding this coverage to your policy is very inexpensive. Pollutants You might be wondering what remote learning has to do with pollutants, and believe us, at first, we thought the same thing. But if you have a high school or college aged child, pollutants could become an issue for you.  We’ve been hearing from some schools and colleges that lab kits will be sent to the students to complete at home as part of their remote learning requirements. If this will be the case for your child, there are some important limitations to your policy you should be aware of. Your homeowners policy contains a pollutants exclusion, which is most commonly applied to the discharge, seepage, release or escape of pollutants. The definition of what is considered a pollutant is: “any solid, liquid, gaseous or thermal irritant or contaminant, including smoke, vapor, soot, fumes, acids, alkalis, chemicals and waste.” Now, let’s review a few examples.  If a chemical reaction caused a fire, it could potentially be a covered loss. But on the other hand, if a pollutant leak causes damage to your property – say your son spills some chemicals that damage your new kitchen countertops – that would likely be excluded. It’s important to note that this could be a gray area for many insurance companies – as this type of claim has likely never occurred before. So it’s best to review your coverages and exclusions with your insurance agent, so they can work with the insurance company on the best coverage for your individual situation. Business Pursuits Another area of concern, specifically for college-aged students, would be if they are engaging in any remote work arrangements while home for the semester. If your college student has arranged remote work study, paid work, internship, or otherwise, there could be limitations in coverage should a claim occur. A standard Massachusetts homeowners policy will not provide coverage for anything “arising out of or in connection with a ‘business’ engaged in by an ‘insured’.” Unfortunately, this is another gray area. Whether a work study would count as a “business” would depend on the circumstances of the claim. Again, we recommend letting your insurance agent know if your child will have any remote work while at home. Remote Learning and Child Care It’s no question that a return to remote learning this fall will create some logistical problems for working parents. We’ve heard from several clients that they are considering hiring part-time or full-time caregivers for children, either to cover the before-school and after-school care, or to be home all day long. Some are hiring to simply handle drop-off and pick-up duties. And some families are considering hiring a teacher to hold in-home co-op learning for small groups of children. If any of these situations have crossed your mind, you will want to note that your homeowners insurance policy will not cover anyone caring for your child, or offering their teaching services. These individuals, even if only getting paid for an hour a day, would be considered your employee, and thus you would need to obtain a workers compensation policy to cover them. A Massachusetts Workers compensation policy with a $1,000,000 limit costs $293 a year. Hiring someone to help with child care is stressful enough as it is, so be sure you know what nanny insurance is, and what you need to apply for nanny insurance coverage. Get Covered for Remote Learning We know many of you are still waiting to hear from your child’s school on the decision of whether to return to in-school or online learning. And some of you, regardless of what the school decides, have made the choice to keep your child home and engage in remote learning. At Berry Insurance, many of us are facing these very same decisions. We’re sending you virtual hugs! If remote learning is one of your options, be sure to give your insurance agent a call today to discuss what changes you may need to make to your insurance policies. While you’re at it, ask your insurance agent for a complete review of all your insurance coverages so that you can be sure you’re back-to-school ready this fall!

Blog Feature

Business Insurance | Learning Center | Workers Compensation

By: Corin Cook
July 2nd, 2020

Unless you’re new to business ownership, you are probably familiar with workers compensation insurance audits. But, if you’re like most people, you’re probably still confused by them. The annual audit can often be very complex, stressful and time consuming for many businesses. However, understanding how your policy premium is determined, what is needed for the audit and how to avoid any mistakes along the way is critical to avoiding costly overcharges.  Fortunately for you, here at Berry Insurance, we have been through it a couple times (more like a couple thousand). We’re here to simplify the worker’s compensation audit for you, explaining what it is, and how you can prepare so you’ll have an error-proof audit experience. What is a workers comp audit? At the start of your policy, your worker’s compensation premium is estimated based on your projected exposures for the policy term. When the policy expires, you’ll be asked to provide your actual exposures for the policy term. This is your audit.  It is designed so you do not overpay (or underpay) for your coverage.  In other words, it makes sure you only pay for the exposures you actually had.  This is a good thing! We love accuracy, don’t we? Even though the process is beneficial, doesn’t mean it is not confusing. There are a lot of materials to prepare and a lot of mistakes to avoid. So, let’s get into the 5 steps you should take to prepare for your audit. Step 1: Understand How Your Premium is Determined Before your audit, you’ll want to make sure you know what your premium is, and how it was determined. There are several factors that play into determining your cost. Gross payroll First and foremost, you will be charged for the gross payroll of your employees during the policy period.  Each employee will be associated with a 4-digit code that represents their primary job duties. For example code 8810 is used for clerical work while code 5190 is for electrical work. Each code is assigned a rate, which is determined by the State, and may be adjusted annually. Location Your policy is also rated based on the states in which you perform work or have locations.  You will want to be sure to keep a detailed payroll record of the work performed in each state, by employee. Owners, officers, partners, or members of an LLC will have their payroll capped at a payroll amount as determined by the state, which also typically is adjusted annually. And depending on how your corporate structure is set up, owners or officers will either be automatically covered on the policy, or will need to make a written election to be included.  Previous claims experience Your policy also may have a charge (or credit) for your previous claims experience. They determine this charge or credit based on something called an Experience Modification Factor. Your experience mod. is calculated six months prior to the start of your policy, and unfortunately, can also be calculated incorrectly. Your insurance agent should be monitoring this calculation and confirming its accuracy before your policy is put in place. Fees and assessments Lastly, there are a few fees and assessments that are charged as part of the policy. These are things such as terrorism, expense constant, and Department of Industrial Accident assessments. These fees are outside of your control, but it’s important to note that while they are included in your overall costs, they won’t change by much as a result of the audit. These factors are all calculated at the beginning of your workers compensation policy to determine your premium. Step 2: Prepare Your Documents As soon as your policy starts, you’ll want to begin compiling the necessary documents to complete your workers compensation audit. Here are the documents you’ll typically be asked to provide: Last four quarterly 941s  Any 1099s issued Payroll reports or spreadsheet showing individual employee names, job duties, states worked, and gross payroll for the policy period Overtime pay, if any List of all owners/officers names, titles, job duties, gross payroll, ownership percentage and # of working weeks List of subcontractor names, job duties and payroll during the policy period Certificates of Insurance (COI) for all subcontracted labor — Note: If the owner is the person doing the work, make sure that the COI states the owner has coverage for himself/herself or that the COI indicates that officers are not excluded Step 3: Avoid Common Mistakes Unfortunately, mistakes happen. Even if you have all the documentation ready ahead of the audit, there are still ways in which your audit can be calculated incorrectly. Through human error, the auditor could assign the wrong code to an employee, forget to take out overtime, charge for a subcontractor they shouldn’t have, etc. To avoid this, be sure you have the following organized before the audit: Double-check all your COIs for subcontractors to make sure that none are without coverage, or are for dates that don’t include your policy term. If that is the case, request updated COIs immediately. Make sure your payroll records do NOT include any “excluded remuneration” – overtime, rewards, tips, severance, officer exemptions, payments for active military duty, etc. With these considerations, your audit should (in most cases) be calculated correctly. Step 4: Schedule/complete your audit appointment Hopefully your audit will be completed electronically or over the phone, and you’ll be able to expedite the process. But, if you have to schedule an in-person audit, there are a few extra steps you should take to make sure the process goes extra smoothly: If you can’t be available to meet with the auditor, assign a knowledgeable and friendly person to work with the auditor. This should be an employee, not an independent bookkeeper or accountant. Treat the auditor as a welcomed guest. Set them up in a clean, clutter-free work space. Do not portray this visit as an inconvenience. Present the auditor with printed copies of all your records. Do not offer any gratuitous information. Answer questions specifically and without elaboration. Do not allow the auditor to roam freely or unattended around your office or facility. Try and schedule the audit for the afternoon, preferably on a Friday. We know some of these suggestions might seem strange because if the point of an audit is to simply make sure you paid for the right workers compensation, why should how the auditor feels at the appointment affect your audit? Well, to be honest, it shouldn’t, but …it could. Creating a simple, stress-free environment for your auditor will just help the process go more smoothly. Plus it’s just courteous!  Step 5: Obtain the Auditor Worksheets Even if all the steps above are completed successfully, mistakes can still happen! Why? Well, partially due to human error, but also in part because many auditors do not work for the insurance company, but rather a third-party. More often than not they are not well-versed in classification rules or state-specific coverages, resulting in costly mistakes for you.  The only way to accurately confirm that your audit was completed correctly is to obtain a copy of the auditor’s worksheets.  You should ask the auditor for their business card, and request a copy of their worksheets before they leave. This step is critical as their worksheets cannot be released to your insurance agent. So if you don’t request them, you might not ever see them. Review the auditor worksheets to make sure everything seems correct. If anything seems questionable, consult your insurance agent. Get through your audit with ease: We know that audit time of the year can be stressful. But if you understand your premium, keep the required information organized, anticipate common mistakes, and navigate the appointment properly, the process can actually be fairly painless! Of course, if you have any questions or concerns about your business specifically, your agent can help.  Feel free to reach out to us so we can help you feel even more confident about your upcoming audit.  Also, we have something else that might be able to help! Download this checklist to make sure you have navigated the audit process correctly from start to finish!  

Blog Feature

Business Insurance | Learning Center | Workers Compensation | nanny insurance

By: Corin Cook
June 18th, 2020

It’s that time of year again! The kids are out of school for the summer and your daily schedule is about to look different. For many, this means it is time to hire a nanny or an au pair. But did you know if you have a child caretaker, you need nanny insurance? The term nanny insurance can be confusing because it doesn’t have defined boundaries. Massachusetts nanny insurance is a group of policies aimed to protect nannies and their employers from work-related risks. Many of these policies are optional and can be purchased depending on individual needs and risks. However, one of these policies, workers compensation, is not optional. In Massachusetts, if you employ one or more nannies or au pairs, you will need workers compensation insurance. Don’t know where to start? That’s where we come in. At Berry Insurance, we help several clients apply for nanny insurance, and we can help you prepare as well. In this article, we will discuss Massachusetts workers compensation and what you need to apply for it so you can protect yourself and your nanny.  What is workers compensation and what does it cover? Workers’ compensation insurance covers medical payments and a portion of lost wages for employees who become injured or ill due to work-related causes. It also protects the employer from liability for these work-related injuries or illnesses. So how does this apply to having a nanny or au pair? Well actually, it works the same as it does in a more traditional work environment. If a nanny becomes injured or ill while working, whether it be from slipping and falling, heavy lifting, being exposed to chemicals, being cut by an item, etc. workers compensation would pay the nanny for related medical expenses and lost wages if they cannot work.  In Massachusetts, all businesses (this includes individuals who employ nannies) are required to have workers’ compensation insurance for their employees. Without coverage, employees could sue their employer for injuries or illness sustained on the job. What will I need for my nanny insurance (workers compensation) application? If you’re applying for nanny insurance, you’ll need to fill out a workers compensation insurance application. The application is the same whether you are a sole-proprietor or a large-scale company, so you might find some confusing terminology that doesn’t apply to you. Let’s go over the information you will actually need to provide to get nanny insurance. Details about the applicant (that’s you!) As you would expect for any application, you will begin by providing basic information about yourself. This will usually include: Name Address Phone number Federal Employer Identification Number (TAX-ID) In addition to the basic information, you will also need to provide a Federal Employer Identification Number (FEIN).  That’s right, if you pay employees, you are considered an employer and have to file taxes as one. As an employer of a nanny or au pair, you are required to have a FEIN, and you cannot get insurance without one. Don’t have an FEIN? Don’t worry, this part of the application sometimes throws people off, but fortunately, it is very simple to get an ID by applying online, by phone, through mail, or through fax. Once you are appointed a FEIN through the IRS, you can continue the application process. Effective date: When applying for nanny insurance, you will also be asked for an effective date. This simply means the day your nanny is expected to start working. Has your nanny already started working? Not to worry. We often have people come to us who already have a nanny working for them, unaware that they needed the insurance. In this case, you’ll just want to make the insurance effective immediately, so plug in today’s date. Number of nannies You will also need to indicate the number of nannies or au pairs you have working for you. This helps the insurance company determine the cost of the nanny insurance. For each nanny that works for you, the base charge is $141 per year. (With fees and state assessment charges, the total cost for one nanny on a $1 million policy is $285.) Insurance history (workers compensation) Before approving your new workers compensation, the insurance company wants to look at your insurance history to make sure you don’t have any outstanding premiums. If you’ve had workers compensation insurance in the past three years, you will need to provide details about it, including the insurance company, policy number, effective dates, and premium. Seperate form (if you own a business) While this doesn’t apply to most people, if you own a business, you will need to take another step. You will need to fill out some additional paperwork outlining details about your current business and insurance. While your business may seem irrelevant to your nanny insurance, the insurance company wants to make sure you have no outstanding premiums and that everything is filed accordingly with the state. Miscellaneous “yes” or “no” questions Like we said earlier, you are filling out the same workers compensation application that any business is, so you will have to check either “yes” or “no” on many questions that may not even seem to apply to you at all. We’ll give you a hint here: you are most likely checking “no” for most of the questions since they apply to other types of businesses, but read each carefully and check off accordingly. If you are unsure if one of these items might apply to you, your insurance agent can help.  Has the employer’s coverage, either voluntary or assigned risk, recently terminated or expired? Have you received any offers for voluntary coverage? Is there any unpaid workers’ compensation premium due from you or any other commonly owned enterprise? Does the employer have any outstanding audits or inspections on a prior workers’ compensation policy? Has an audit been scheduled? Was the applicant self-insured within the last twelve months or was the applicant’s expiring policy subject to the Premium Determination Endorsement – Former Self-Insurers 1? Has the employer received a Stop Work Order from the DIA? Is the employer in bankruptcy? Does this entity or any other commonly owned entity have operations in states other than MA? Has there been a name change within the last five years? Has there been a sale, transfer or conveyance of ownership interest within the last five years? Did the applicant purchase or otherwise acquire the physical assets of another entity whose operations they took over within the last five years? Have the owners or officers ever had ownership interest in any other entity, either currently or previously existing? Is it anticipated that subcontracted labor will be utilized during the policy term? Do you use independent contractors? Does the employer lease employees to other businesses? Does the employer provide employees to other businesses but not consider their arrangements to be employee leasing arrangements in accordance with 211 CMR 111.00? Does the employer lease employees from or regularly have temporary employees supplied to them from another business? Does the employer operate a trucking or delivery business? Does the employer operate as a general or subcontractor in commercial or residential construction operations? If you answer “yes” to any of the questions, the insurance company may reach out to you to ask for some additional information. Pick your coverage limits: When applying for workers compensation nanny insurance, you will also need to select your coverage limits.  The standard policy offers a $100,000 limit for each accident, a $500,000 limit for the entire policy, and a $100,000 limit for each employee. However, we always recommend the maximum limits ($1 million for each coverage). This policy provides a lot more protection for only about an extra $70 per year. What happens after I apply? After you fill out your application, your agent will submit it to the state, wait for approval and take your payment (in full, checking account only). Typically, this process takes two days. Once approved, you’re officially protected and ready to start working with your nanny! If at any point you no longer have a nanny or au pair, you can cancel your policy, but unfortunately, you probably won’t get any refund. Protect your nanny and yourself: We know when it comes to your childcare plans, protecting your child is at the forefront of your focus (understandably so). But don’t forget to protect the person you’re hiring to care for your children, as well as yourself. Having workers’ compensation for your nanny is not only required, but also critical in ensuring your nanny is covered in the case of an accident, and doesn’t come after you for payment.  While you’re at it, it doesn’t hurt to ensure extra protection. Read this article to assess your risks and see if other, optional nanny insurance policies might be right for you.  

Blog Feature

Business Insurance | General Liability | Learning Center | Property Insurance | Workers Compensation | Business Auto

By: Corin Cook
June 11th, 2020

If you run a business, or are planning on opening a business, by now you know there are many costs associated with it. You may have to pay for the office space itself, the supplies and equipment you use, your employees, and so much more. On top of that, you have to pay for insurance to cover all of those things you are already paying for. This is done through several groups of policies known as “business insurance” or “commercial insurance.” We get how frustrating it can be. At Berry Insurance, we insure a number of businesses across diverse industries, ranging from a handful to thousands of employees. Plus, we are a business ourself, so we see the complexities every day.  If you’re not too familiar with insurance, you might not know what to expect and you might be wondering what it actually costs to insure a business. Honestly, even though we sell the insurance, this is a very hard question for us to answer. Not because we don’t understand insurance or we have something to hide, but because there is no straightforward answer. Asking what business insurance costs is kind of like asking how much it costs to buy a house on Earth. There are so many variables that influence the price. But we also know you want to have an idea of what to expect before you buy insurance, so we want to help you understand the costs of business insurance as best as you can.  Below we’ll address the costs of business insurance (most specifically property, general liability, commercial auto, and workers compensation insurance) and what factors influence each of them. While some businesses may be outliers, with even higher or lower annual premiums than we present, these numbers are general ballpark estimates of what you can expect. What is a business owners policy (BOP)  and what does it cost? When you own a business, your main business owners policy comprises two policies bundled together: property insurance and general liability insurance. Since these two coverages are bundled, we’ll talk a little bit about each, then go over what the package could cost. Property insurance:  What it covers: Property insurance can cover the actual structure of your business’ building and its contents, as well as the exterior features such as fencing, or signage.  What determines the cost: 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 insurance: What it covers: General liability insurance covers costs arising from claims against businesses resulting from their operations, such as property damage, physical injury, and personal injury, including libel and slander. What determines the cost: Premiums for liability coverage are typically based on sales for the year, payroll, square feet of the premises or even average number of guests or attendees at the business, and and the limits and deductibles you select. So, what does a business owner’s policy generally cost? What it costs: Annual premiums for a business owners policy (both property and liability) can range from $233 for a home-based business to closer to $80,000 for larger businesses with higher risk operations. Commercial auto cost What it covers: Commercial 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. What determines the cost: Premiums for commercial auto coverage are generally based on the number of vehicles the company owns, the cost of the vehicles, where the vehicles are garaged, business operations, coverages inclusions, and limits and driver history.  What it costs: Annual premiums for commercial autos can range from $1,500 for a private passenger vehicle to $40,000 for a larger company with many work vehicles. Workers compensation cost What it covers: Workers compensation insurance covers wage replacement and medical payments to employees injured while performing job-related duties and protects companies from liability against employee claims. What determines the cost: Workers compensation costs are usually based on the number of employees in the company, estimated yearly payrolls, and job duties/business operations, and the limits you select. What it costs: Premiums for workers compensation policies can range from $218 for a basic nanny policy, for instance, to $100,000 or more for large corporations with higher-risk operations. Let’s look at some business insurance cost examples: By now, I’m sure you can see how much business insurance cost varies based on details about the business. Let’s look at a couple of realistic scenarios of what business insurance might cost. For a very small business, take for example a singular residential house cleaner with no employees, no property, and no commercial vehicles, they may only pay around $500 a year for business insurance (they only need general liability coverage).  Now let’s look at a larger business. An HVAC contractor with a property coverage limit of $60,000, general liability limits at $1M/$2M, a $625,000 payroll, and 10 vehicles may pay around $60,000 per year for the business insurance they need. An even larger corporation with many employees, work vehicles, expensive equipment, and high risk operations, like a mechanical engineering company could pay $250,000.  Other business insurance costs: 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. We aren’t going to dissect the costs of these additional insurances, but be aware that you may need to spend additional money to get them. If you have any questions about the costs, feel free to reach out to your agent. 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 a 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.

Blog Feature

Business Insurance | General Liability | Learning Center | Workers Compensation | Cyber & Identity Theft | Business Auto

By: Corin Cook
May 26th, 2020

Back in March when the COVID-19 pandemic was ramping up and businesses were temporarily closing or transitioning to remote operations, we wrote this article to help businesses know where to adjust their business insurance during a crisis. Now a few months later, things are starting to get (at least a little bit) back to normal. Some Massachusetts companies may have decided to maintain remote operations, but others are partially or fully re-opening, or working on a plan to slowly shift employees back into the office. For usat Berry Insurance, we are slowly getting back to normal, but things are looking very different for us. We are currently following a detailed plan to slowly phase our team back into the office, while implementing strict social distancing and cleaning practices.  So whether you’re ready to fully re-open or are transitioning employees back into the office like we are, there may be some areas of various insurance policies you may need to adjust at this time (or soon). Where to adjust insurance after a crisis: If you changed certain insurance coverages during the pandemic, or are making operational changes post-COVID-19, you might need to adjust some of the following coverages. 1. Increase sales revenue on liability insurance: It’s safe to assume most businesses (aside from Zoom, Netflix, Nintendo, food delivery services, and liquor stores) had a drop in income during the COVID-19 pandemic. If you lowered your sales revenue on your liability insurance during the crisis, or if your business is booming after the COVID-19 era, it is time to adjust your sales revenue to reflect it. If your sales revenue is not accurate on your insurance policy at the end of your policy term, you may run into issues when being audited. 2. Increase payroll on workers’ compensation: If you had a reduction in workforce during the pandemic, you may have lowered your payroll on your workers’ compensation policy.  If you’re rehiring and adding employees, don’t forget to readjust your payroll.  Again, keep in my mind that your policy may be audited at the end of the policy term, so as things progress, be sure to keep your policy accurate so as to not result in a large audit premium due. 3. Adjust property coverage: For those of you who had to purchase new equipment to enable remote working (laptops, webcams, remote servers, etc.), you probably increased your property coverage to protect that new equipment.  Assuming you are keeping that equipment, you’ll need to keep it on your policy (or add it if you haven’t already!), but if you are getting rid of it, you can remove it. You should also consider any equipment that you may be adding when you re-open. For example, at Berry Insurance, we are investing in new safety, social distancing, and cleaning equipment to enhance the safety of our employees and guests. If you are doing the same, you should add that new equipment to your insurance. 4. Re-add collision coverage: If you’re putting business vehicles back on the road after not using them during the crisis, make sure the vehicles have the proper coverages. During the crisis, we were recommending that businesses remove collision coverage on vehicles they weren’t using to save some money. If this is the case for you, you should re-add the coverage before using the vehicles. Collision insurance covers damages to your vehicle from a collision (whether you are at fault or not). These collisions can be with any object like a tree, pole, guard rail, pothole, or with another vehicle.  This coverage is optional (as long as you don’t have a loan on the vehicle), but not having it can leave you with a large out of pocket expense if there were to be an accident. 5. Adjust your billing plan/method: Many insurance companies offered payment plans and/or extensions on a case-by-case basis during the crisis.  If you are using one of these payment plans, you may need to transition back to a traditional payment plan once the insurance companies require you to. In this case, the company will probably reach out to notify you directly, so just be prepared that this may happen in the coming weeks or months. 6. Remove hired and non-owned auto liability: To adapt to stay-at-home orders, many companies adjusted by offering delivery or using new vehicles for work purposes. These companies needed to add coverage for hired and non-owned auto liability to ensure all drivers and vehicles were fully covered under their commercial auto policy.  If this applies to you, you may want to remove this coverage once you are no longer using those vehicles or offering those services.  It should even save you a little bit of money! Be protected when you’re back up and running We know you’re excited to get your business back up and running as close to normal as possible (we are too!). But in all the excitement and chaos that will most certainly ensue, don’t forget about your insurance! The last thing we all want is to have to deal with an uncovered insurance claim right after finally getting to open up again.  During this time and as always, Berry Insurance is here to help you through your changing insurance needs. We know every business is different, so feel free to reach out so we can make sure you are making the right decisions for your specific business. If your business has gone through significant changes during this time, you may need to make some additional changes. Check out this article about when you may need to switch or update your business insurance.