With its Golden Gate Bridge, golden-laden sunsets, and fields of golden poppies, it’s no wonder California is considered “The Golden State”. Currently ranked as first in population size, it’s the ideal location to begin or grow a business in California. But besides its breathtaking beauty, diverse culture, and high-density of celebrities, California isn’t without its risks for small businesses. In addition to legal liabilities, businesses need to take proper precautions against the state’s natural hazards, including wildfires, earthquakes, and mudslides. That’s why most every Californian knows the critical nature of being protected with business insurance in California.
Standard Business Insurance Coverages in California
Commonly cited as a BOP, a business owner’s insurance policy, is an expansive insurance package for small businesses comprising several liability coverages in one bundle. A BOP typically combines two primary coverages in a single policy: property insurance and general liability. Covering a variety of insurance needs, including building structures, equipment, and legal liabilities, business owners insurance shifts risk away from the California business owner to the insurance company. A business owners insurance coverage affords a number of areas of protection including: litigation liability claims, professional liability claims, income loss, equipment breakdown, fire, employee dishonesty, personal injury, money, securities, valuable papers, and property claims. Based upon the distinctive risks a California small business owner might possibly have to deal with, additional elements may be added to the initial BOP coverage.
General liability insurance is meant to guard the California small business owners from monetary loss arising from negligent acts, omissions, or both, caused by himself or his staff that ends up in physical harm or property damage. Examples of the kinds of hazards and exposures typically shielded under general liability insurance include liabilities from merchandise sold, accidents on the insured property, and contractual liabilities. Negligence or an unintentional act may be the cause of the injury or damage. General liability insurance in California can be a policy by itself or can be combined with another policy.
A package policy is an insurance policy for the small business owner that combines two or more types of insurance into one policy, or package. A typical package policy in California combines general liability insurance (described above) and commercial property (described below). However, a package policy can be orchestrated to incorporate nearly any type of coverage, depending on the requirements of the entity. A package policy is beneficial for the Californian small business owner because it allows for tremendous flexibility to build a policy specifically for the distinguishing needs and risk exposures of a California business.
Commercial Property Insurance is employed to supply coverage for any type of California commercial property, whether in Los Angeles or San Francisco. It not only includes building structure, equipment, and furniture coverage, but also inventory, supplies, and valuable papers. The Californian’s business personal property is covered as well. Commercial property insurance in California provides protection against a variety of natural perils, like windstorm, hail, and lightning strikes, but also vandalism, explosion, and fire. This sort of insurance is suggested for a range of California small businesses, including retail stores, product manufacturers, not-for-profit enterprises, and service-oriented businesses.
If you have staff who are employees working for you in your California business, workers’ compensation insurance provides coverage against employee occupational sickness and work-related injuries. Workers’ compensation insurance in California is a no-fault, state-required insurance program set up to compensate employees who sustain injuries or an illness while on the job. Because the state of California requires businesses with employees to provide workers’ compensation benefits, failure to carry it can open up the risk of small business owners being subject to severe fines and civil penalties. In other cases, employers could be held liable for the cost of injuries suffered by their employees. Through workers’ compensation insurance in California, employees are compensated for medical care and lost wages coverage in exchange for the peace of mind that the employee will not sue his employer.
Whether your California business owns one vehicle or a fleet of vehicles, it’s a necessity to be protected with commercial auto insurance in California. Commercial auto insurance provides monetary protection to business owners and their drivers by providing coverage for a company’s use of trucks, vans, cars, or alternative vehicles in the course operating a business. Commercial auto insurance in California doesn’t only cover damages and medical costs resulting from vehicle accidents. Vandalism and hail damage are some of the other covered perils. Whether your vehicle is leased, rented, hired, or owned by your company, you know that you’ll be covered. You should also know that employee-owned vehicles used for your California business operations would also be covered. Known as non-owned commercial auto insurance, most insurance experts suggest that companies purchase a commercial auto insurance policy if employees use their own vehicle to perform their job duties.
Commercial umbrella insurance in California kicks in where your general liability, commercial auto insurance, or other liability coverage leaves off. To further explain, your existing liability policies most likely have coverage limits, and may not cover all expenses should an unforeseen event or disaster occur. Commercial umbrella insurance is a vital source of protection that closes the gap in your primary liability coverage. Umbrella insurance is a superb way to provide further protection against property damage, bodily harm, or certain other liabilities.
Some Additional Business Insurance Coverages in California to Consider
Errors and Omissions insurance policies shield California businesses and individuals from litigation and allegations brought forth by clients or customers for imperfect or insufficient work, negligent acts, or errors made in the course of business operations that resulted in a loss of productivity or money on the part of the customer or client. Errors and Omissions insurance in California covers litigation costs, such as legal defense costs and court costs. Just like malpractice insurance is strongly advised for doctors, small business owners who offer services or consulting advice, either directly or through subcontractors, need errors and omissions insurance in California.
Professional liability insurance in California helps safeguard professionals, like general contractors, lawyers, and accountants from bearing the complete burden of legal cost of defending against a allegation of negligence, error, failure to perform, or omission made by a client as well as damages awarded in said allegation. The coverage focuses on monetary or bodily injury loss on the part of the client from these types of claims with respect to a product or service sold by the skilled professional. Professional liability insurance in California is required by law in many kinds of professional practices, most commonly in the legal and medical professions. However, it is required by contract in other professions.
When California small business employers need protection against allegations of wrongful termination, wage law violations, discrimination, breach of contract, sexual harassment, false imprisonment, libel, slander, defamation claims, emotional distress, mental anguish, and negligent hiring and promotion decisions, they turn to Employment Practices Liability Insurance (EPLI). Employment Practices Liability Insurance in California concentrates around the acts, laws, and other protections brought forth by Title VII of the Civil Rights Act of 1964, Age Discrimination in Employment Act, and Family and Medical Leave Act, which are enforced by the Equal Opportunity Employment Commission (EEOC).
Fidelity Bonds in California
Fidelity bonds are a form of insurance purchased by the California small business employer to defend against losses, like embezzlement, fraud, and theft by one employee or a number of employees. Because reimbursement from employee dishonesty practices is highly unlikely because the money has already used, fidelity bonds represent a vital safeguard for a Californian small business owner who would otherwise need to bear such monetary loss on his own. While it’s crucial to have defensive procedures in place, like employee screening, internal controls, separation of duties, and close employee monitoring, sometimes more protection is called for. Losses suffered from employee thefts of cash, securities, and property are all covered under fidelity bonds insurance in California. The three most common forms of fidelity bonds are business service bonds, standard employee dishonesty bonds, and ERISA bonds.
Surety Bonds in California
A surety bond in California is a binding agreement or contract among a principal, obligee, and surety (insurance company). It embodies the promise pay a specified amount should a party to the bond fail to meet an obligation, like completing the contract in accordance with the agreement terms. A surety bond shields the recipient against loss should the contract not be fulfilled, while the surety company bears the liability should the contract be unfilled. A surety bond is typically required to obtain financial compensation. Business owners in California may need a surety bond to ensure payment of utility bills or sales taxes of the state. On the other hand, a contractor might have to post a bond to obtain a job or qualify for licenses. Surety bonds are seen in the mortgage, automobile, medical supply, notary public, and health club industry. However, they are most commonly used in the construction industry. Due to the wide range of California small businesses that use and need bonds, there are many types and features of surety bonds that provide a good range of guarantees.
California is thought of as a land of golden opportunity. And California small business owners need to protect their hard work in building their business, in the event of a fire, earthquake, or non-natural disaster event, such as a theft or liability claim. Whether you want to operate a surf shop in Malibu or skin care center in Hollywood, not only is it important to have standard business insurance in California to protect your business, but — depending on the unique characteristics of your business — additional California insurance coverage may be called for. Because business insurance is a crucial factor of success, wise California business owners recognize that a strong business insurance plan tailored to the distinctive needs of their small business is imperative.