Doing business in Louisiana is rewarding when you have the right business insurance. Different types of business insurance exist to help businesses thrive.
96% of small business owners do not know the basics of business insurance according to Forbes.
29% of these small businesses have no business insurance, resulting in avoidable losses.
Over $7 million was awarded by juries in product liability claims in the year 2020.
This was against businesses that do not have the right insurance policy. A big loss it was.
It is important to let business owners know the different types of business insurance policies available.
In Louisiana, there are policies you have to adhere to for your business to thrive.
If you want to run a successful business in Louisiana, this article will aid you.
Here, you will get a detailed explanation of the different types of business insurance in Louisiana.
What is the Purpose of a Business Insurance Policy?
Every business needs protection to thrive. Business insurance policies provide this protection.
It is easy to go out of business without this protection.
The purpose of a business insurance policy is to protect businesses from losses due to unexpected events that may occur during normal business operations.
These events could be lawsuits, natural disasters, or accidents.
Now that we know the purpose of a business insurance policy, let us look at the different types of business insurance policies in Louisiana.
1. General Liability Insurance
This business insurance policy covers legal costs for cases where a customer suffers bodily harm.
In an event where someone’s property is accidentally damaged, it covers the cost incurred.
It also covers personal and advertising injuries such as libels and copyright infringements.
Why is General Liability Insurance Important?
In the day-to-day running of a business, injuries and accidents may occur. It is best to prepare your business for such events.
General liability insurance protects your business from the high costs of lawsuits. It also enables you to qualify for contracts and leases.
Businesses with this insurance in place spend less on lawsuits and as a result, save more money.
What does General Liability Insurance Cover?
This policy covers several incidents that help keep businesses afloat and save money.
Below are the areas covered by this business insurance policy.
i. Bodily Injuries
If a customer trips and falls at your business place sustaining an injury in the process, the general liability insurance covers any expense that may be incurred.
You may not be able to prevent accidents from occurring at your business place, but you can prepare for it.
ii. Property Damage
When your business accidentally damages or destroys another person’s property, the general liability insurance covers the cost.
iii. Personal and Advertising Injuries
If personal and advertising injuries such as slander, false arrest, or copyright infringement occur, general liability insurance covers the ensuing cost implications.
These cost implications could be legal fees, settlements, or judgments.
iv. Libel
When you say something negative about another business, and it causes harm to them, the general liability insurance covers the cost involved and saves you from a high-cost lawsuit.
Also Read:
- 7 Biggest Insurance Challenges and How to Overcome Them
- How to Get the Best Commercial Property Insurance Quote in Louisiana
How much does it cost to have a general liability insurance?
Some factors determine the cost of general liability insurance for a business. These factors include
- Amount of coverage
- Industry and risk factors
- Location
- Number of employees
General liability insurance costs an average of $42 per month. It is very affordable, especially when you consider how much protection it gives a business.
2. Workers Compensation Insurance
This policy covers losses incurred when workers fall sick or sustain injuries at their duty post.
Medical bills and legal fees are covered by this policy to ensure the business does not lose so much money.
This is one of the types of business insurance required in Louisiana and almost every other state for businesses that have employees.
Why is Workers Compensation Insurance Important?
Covering the cost of medical bills for employees could be a big ask for a business. Having workers’ compensation insurance helps the business save money.
Your business will be responsible for medical bills and legal fees if this policy is not in place.
Most states levy costly penalties for noncompliance.
What does workers’ compensation insurance cover?
This insurance covers work-related injuries and cases of illness. It is one of the different types of business insurance in Louisiana that a business should have.
Workers’ compensation insurance covers the following:
- Medical Expenses
When workplace accidents occur, workers’ compensation insurance takes care of immediate medical care for the employee(s) involved.
- Disability Benefits
An employee could stay out of work for days or even weeks due to an injury sustained in the workplace.
Workers’ compensation insurance covers part of the wages lost while this employee is recovering.
- Fatal injuries
In cases where work-related injuries result in death, the workers’ compensation policy pays a death benefit.
This death benefit covers funeral expenses and supports the family of the deceased.
- Lawsuits
Employer’s liability insurance is included in workers’ compensation insurance to protect the employer from lawsuits related to work injuries.
How much does workers’ compensation insurance cost?
The average payment for workers’ compensation insurance is $43 per month.
Insureon, however, has 23% of its customers paying just $30 per month for this policy.
Insureon is an independent marketplace for online delivery of small business insurance.
They help a wide range of businesses get the coverage they need from top-rated U.S. insurance carriers.
3. Commercial Auto Insurance
This is one of the types of business insurance policy in Louisiana. It takes care of automobiles and automobile-related incidents within a business.
Businesses that have cars and other types of road vehicles need this type of insurance to protect them from legal or accident issues.
If you or your employee needs medical care or faces legal expenses due to automobile accidents, you can rely on commercial auto insurance.
Statistic data observed in 2010 suggests that Automobile crashes caused up to $1 trillion in costs per year.
This explains the importance of commercial auto insurance for your business.
In Louisiana, various auto insurance packages are available for businesses.
- Commercial auto insurance covers vehicles owned by your business.
- Hired and non-auto insurance (HNOA) covers personal, leased, and rented vehicles used by your business.
- Personal auto insurance policy covers you while driving to and from work, not while making deliveries or other work-specific uses.
- A business auto policy would cover you and your personal vehicle in case you’re at fault for an accident during a work-related errand.
- Any vehicle you own for work purposes must be covered by a commercial auto policy.
How much does Commercial Auto Insurance Cost?
The cost of commercial auto insurance in Louisiana and most parts of the United States is dependent on factors such as;
- Number of vehicles
- Vehicle type and value
- Level of risk involved
- Claims history, etc.
The average cost is within the region of $147 per month.
4. Business Owners’ Policy
The business owners’ policy combines general liability insurance and commercial property insurance.
This reduces the cost that would have been incurred if they were gotten separately.
Businesses that own or rent a workspace need a business owners’ policy. This policy protects against customer injuries, burglaries, and fire incidents in the workplace.
Business owners’ policy costs an average of $57 per month which translates to about $687 per year.
5. Professional Liability Insurance
When small business professionals like lawyers, doctors, or architects make professional errors, professional liability insurance protects them by covering the cost implications.
This is cheaper than lawsuits and paying for damages that may result from such professional mistakes.
Professional liability insurance is one of the types of business insurance policies available in Louisiana for small businesses.
Even the most meticulous professional service provider could make mistakes, so having this insurance in place is best.
This business insurance available in Louisiana provides coverage for;
- Work mistakes and oversights
- Undelivered services
- Negligence
- Missed deadlines
This business insurance policy costs an average of $61 per month.
6. Cyber Insurance
This is one of the business insurance policies in Louisiana, it protects businesses from the high cost of cyberattacks and data breaches.
Nearly 43% of cyber breaches reported in 2023 were against small businesses.
Some of these businesses are unable to invest in sophisticated cybersecurity systems. Getting cyber insurance becomes a better option.
Two types of cyber insurance exist – first-party coverage and third-party coverage.
The first-party coverage, or first-party cyber liability insurance, or data breach coverage covers costs related to data breaches that directly affect your business.
The third-party coverage comes into play when you are a cybersecurity service provider to other businesses
This policy helps you pay for legal costs when a customer or business sues you for failing to prevent a data breach or cyber attack.
Also Read:
- How Business Interruption Insurance Works in Florida
- Do You Need Business Insurance for an LLC in Florida?
Where can I get business insurance policies in Louisiana?
Several insurance companies provide different types of business insurance in Louisiana. One of them is Louisiana Companies.
They educate and empower business leaders with resources that aid them in making better decisions.
Other companies you could get business insurance from in Louisiana include,
- Insurance Network of Louisiana
- The Louisiana Insurance Centre, and
- Insureon
If you want to enjoy the ease of doing business in Louisiana, make sure to get the business insurance policies your business requires.
