Business hazard insurance is one of the most popular coverages that all small businesses need to have. The good news is that it isn’t too expensive. You can find a good business hazard insurance policy from a reputable company at $60 a month. But it can also be as expensive as $200 a month. Make sure you shop around with a few companies to compare the costs and the coverages of different policies to find the best and the cheapest for your business.
- How much does hazard insurance for small businesses cost?
- What factors affect hazard insurance cost?
- How can I find cheap business hazard insurance?
- What is business hazard insurance?
- What does business hazard insurance cover?
- Do I need hazard insurance for my business?
- What types of events does hazard insurance protect against?
- Do I need hazard business insurance if I run my business out of my home?
- Are there other types of business hazard related coverage I should consider?
- What’s the difference between business property insurance and business hazard insurance?
- Top 5 business hazard insurance companies
How much does hazard insurance for small businesses cost?
On average, small businesses pay about $60-$210 a month, or $720 – $2,520 a year, for a hazard business insurance policy. Below are the costs of hazard business insurance policies from some popular carriers that we are able to get quotes. (See the quote details in the last section of the article)
|Carriers||Monthly cost |
(Hazard business insurance policy)
As you can see above, hazard business insurance cost varies significantly by carriers. Be sure you get quotes from multiple providers. Working with a top broker like CoverWallet, Simply Business, ez.insure, or commercialinsurance.net is a good way to get and compare several quotes in one screen and choose the best one for your business.
What factors affect hazard insurance cost?
Premium costs can vary dramatically because they’re based on so many factors including:
The age and value of the property
Hazard insurance will pay to repair or replace the property if it gets damaged by one of the covered events such as fire, explosion, theft, vandalism, etc. The age of the property affects the likelihood of these events, for example an old building is more likely to catch fires caused by old electricity system or have explosion caused by old gas system. The value of the property affects how much the insurance company has to pay to repair or rebuild it. That’s the reason these two factors affect the cost of hazard insurance of the property. The older the property is and the more expensive the property is, the higher hazard insurance cost is.
The location of the property
Similarly, location of the property plays a big role in determining hazard insurance cost of the property. If a property is located in a more crime-prone neighborhood, the likelihood for it to get vandalized is a lot higher than a similar property located in a safer neighborhood.
The contents of your property
The more contents there are in the property and the more valuable these contents are, the more expensive the hazard insurance cost is. Because if these contents are damaged or stolen by a cover event, hazard insurance will pay to repair and replace it.
Your business type
Your business type is likely to contribute to the likelihood for these accidents to happen. For example, in the same building and same floor and with the same size, a restaurant will pay a lot more expensive hazard insurance policy than an accounting firm. This is because the activities generated by a restaurant are a lot riskier than activities of an accounting firm.
The limits and coverage options you choose
If you choose to have more coverages and higher coverage limits, you will pay more for the hazard insurance policy. In many cases, you buy hazard insurance policy because you are required by your landlord or you business loan lender, they usually require a certain coverages and their limits as well. You should know that the more coverages, or comprehensive coverages, and the higher coverage limits they require, the more expensive the hazard insurance policy is.
Whether or not you choose full or partial replacement cost
If you choose full replacement cost for you hazard insurance policy, you’ll pay more for the policy. Choosing partial replacement will reduce the cost. However, when accident happens and you need replacement, you might not be as happy with the partial replacement cost policy.
How can I find cheap business hazard insurance?
Here are some tips to help you find the coverage you need at a fair price:
Shop around for the best value
Get quotes from a few companies and compare them to get the best coverage at the lowest cost. Different insurance companies will always give you different quotes and rates. If you decide on the first quote you receive, it is almost certain that you leave some money on the table. Getting several quotes from several companies can be time consuming, working with a broker like CoverWallet, Simply Business, ez.insure, or commercialinsurance.net is a good way to get and compare several quotes more easily. Getting an fast online quote from Thimble is a good start. The quote process is super fast. It shouldn’t take you more than 5 mins to generate a quote on their website.
Make sure that you and your employees follow all best safety practices required or advised by the relevant regulations and conduct regular monitoring and auditing of the essential systems in the building such as fire alarm, electricity fuse test, etc.
Take advantage of discounts
If they’re not offered to you when getting a quote, ask about them, whether you’re buying online or through an agent. Insurance companies always offer several discount programs. You may not be eligible for all programs. But even if you are not eligible now, you will know what it takes for be eligible for these discounts so that you can choose to implement the requirements to be qualified for the discounts in the next 3, 6, or 12 months.
Taking these steps will help ensure you’re not paying too much for your business hazard coverage.
What is business hazard insurance?
Business hazard insurance, more commonly referred to as business property insurance, is a type of small business insurance that protects the buildings that your business operates out of whether you own or rent them. It also covers the equipment you use to run your company.
What does business hazard insurance cover?
Hazard insurance can help cover the costs to repair or replace your:
- Personal property and that of your employees if it’s damaged because of a covered event, such as a fire or weather-related emergency
- Tools and equipment whether they’re damaged or stolen
- Inventory, furniture and computers damaged by a covered event
- Valuable documents if they’re damaged or stolen
- Outdoor items on your property such as fences, signage and mailboxes.
If you’re not clear about what’s covered by your business hazard insurance, read your policy, speak with your business insurance agent or a rep at your business insurance company.
Do I need hazard insurance for my business?
Most states don’t require business owners to purchase hazard insurance. Still, it’s a good idea to have it to protect your business property. If you don’t purchase it, you will need to pay for damages and theft out of pocket. Think about it: Could you afford to pay to rebuild your business and replace its contents after a fire? For most small businesses, the answer is NO. Even something like replacing a sign that gets blown down in a wind storm could have a significant impact on cash flow.
What types of events does hazard business insurance protect against?
Hazard insurance typically covers property losses resulting from:
- Power surges
- Civil unrest or rioting
- Natural disasters, such as blizzards, hail or tornados.
If you can’t open your business because of covered property damage, hazard insurance will also replace a portion of your lost income.
Do I need business hazard insurance if I run my business out of my home?
The answer is probably YES. Homeowners insurance protects your home and it’s contents if anything is harmed by a covered event or stolen. It would not cover any contents that are clearly related to your business. You would need to cover business assets, such as equipment and inventory, with business hazard coverage.
Are there other types of business hazard related coverage I should consider?
If your business is in a state that excludes risks from events like earthquakes, hurricanes or flooding, from standard hazard policies, you may need to get separate coverage.
For example, if you own a beachfront business in Florida, you may need to get separate coverage for hurricane or flood related damage. Similarly, you might need to secure coverage for earthquake damage in certain parts of California.
The reason these things aren’t covered on standard policies is because they’re very likely to happen, so you need to pay significantly more to protect against them.
Some common disaster policies include:
- Flood insurance, which covers damage to your property that’s caused by different types of flooding, such as from ice or snow melting, flash flooding or storm surges from hurricanes.
- Earthquake insurance, which covers damage to your property from the effects of an earthquake.
- Terrorism insurance, which protects against damage resulting from acts of terror.
A business insurance expert familiar with the perils you face in your area can advise you on the coverages that could make sense for you.
What’s the difference between business property insurance and business hazard insurance?
There is no difference. They are just two ways to refer to the same coverage.
>>MORE: Best Commercial Property Insurance Companies
Top 5 business hazard insurance companies
Hundreds of insurance companies offer hazard business insurance since this is one of the most popular policies for small businesses. We have done the research and here are our recommendations for the best business hazard insurers in the United States:
- CoverWallet: Best for comparing online quotes easily and quickly
- Progressive Commercial: Best if you want to get business hazard insurance as an add-on
- Thimble: Best for a fast online quote
- Travelers: Best for comprehensive hazard coverage
- The Hartford: Best if you want to have business hazard coverage included in your BOP policy
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