California Business Insurance FAQs

Firstly, any California business owner is required by law to provide workers compensation. Secondly, your lease may require certain liability or property coverages. Finally, you will want to protect your business, business equipment and other business-related possessions, and income with some additional property and liability coverages, at the very least.

Whether you are a multimillion dollar company or a nickel-and-dime store, you need business insurance to protect you against property damage and lawsuits. If a claim is filed against you and you lose, you will have to pay whether or not your business is profitable. You may forfeit everything.

Your personal home insurance policy is not intended to protect an in-home business. You may be able to add riders to your California home insurance policy to cover business-related belongings. You will most likely need to take out additional general and professional liability policies to fully protect yourself and your home-based business.

Since needs of businesses are different, one of the best ways to lower premiums is to shop around and get quotes for exactly what you need. You can also set higher deductibles—what you pay directly before insurance coverage begins—in order to get lower premiums. You might investigate broad business owner policies (BOP’s) that may cost less. If you are very low-risk for most types of damage/loss, you could consider named-peril policies to lower costs.

A BOP is a business insurance policy that groups together certain liability and property coverages to allow for lower premiums. BOP’s generally cover the building, equipment, and other business property, including items belonging to others but under your control, for either cash value (actual value) or replacement value. The limit on cost of rebuilding your place of business automatically rises by a set percentage yearly. BOP’s often include commercial vehicle insurance and business interruption insurance. If you are looking at a BOP, make sure that the exceptions to the policy do not put your business at risk. And verify that you are eligible for a BOP, because size, history, profitability, and other factors related to your business affect your eligibility.

There are several kinds of business insurance, and the amount of each you need depends on your business. Property insurance covers the physical location and buildings of your business, and therefore the amount needed depends on the value of that property. Contents insurance protects your business equipment: to determine how much you need, create an itemized list of your assets and their values, and determine which of them need to be covered based on the premiums they will incur. If you could not afford to replace a piece of equipment, then it should be insured. And third, liability insurance protects you from claims of negligence or from injuries resulting from your product. The specific coverage you need in this area depends on the sort of business you run.