Self Employed--How much do you pay for liability insurance?

[Mermaidman]

I did some quick research on liability insurance for small businesses--So there're "General Liability Insurance" and "Professional Liability Insurance" (aka Errors & Omissions). How much does it cost you for these types of insurance and for what amount of coverage?

I presume that most of us here run our businesses out of home, so do you even bother with general liability? I'm thinking of buying $1M of errors & omission coverage.

 

[RKS]

I had part-time malpractice coverage for $300K/$600K for about $200 a year.

 

[KaChow]

My wife is an IT consultant for gov't agencies. Her general liability ($1m/occurance + $2m aggregate) is $500/yr. Her E&O is just over $1100 this year ($1m) and it has gone down ~$75 per year for the last 3 years.

 

[Blackjack200]

This is probably not all that helpful, but I've heard that you have to be careful not to have too much liability insurance or it will make you a target for lawsuits.

 

[Greenman]

It's going to depended entirely on what sort of business you're in. E&O coverage doesn't exist in my business, that falls under the "latent defects" heading, and is covered under my general liability. Common limits in my industry are 1 million per occurrence and 2 million aggregate. Cost is around $2500, but there are certain limits imposed. For instance, I can't contract with a home owners association, nor can I ever write a contract to repair a leak, and I can't sub-contract more than 20% of my work.
It's a pain keeping track of what I can and can't do.

 

[highland145]

$325 for $500K

 

[Mermaidman]

Thanks for the responses!

My wife is an IT consultant for gov't agencies. Her general liability ($1m/occurance + $2m aggregate) is $500/yr. Her E&O is just over $1100 this year ($1m) and it has gone down ~$75 per year for the last 3 years.

It's interesting that the cost has gone DOWN. Could it be because she is gaining experience and thus of lower risk?

 

[EagleKeeper]

I have StateFarm that charges $40-50/month on an as needed basis. If the client requires liability; then I call my agent - she faxes a binder over and starts billing my CC.
When the contract is over; a phone call stops the coverage and a check for the difference for that month is issued. When a client requires coverage; I let them know that my rate will increase to cover it. A $2 hour increase translates for pure $300-$350/month profit.

Coverage is $1M liability and $50K equipment/income loss

 

[dullard]

I was ALMOST a self-employed consultant with those insurances, until I was hired instead of sub-contracted. I had spent over a month shopping around and finally had found good prices for insurance. But then, I was hired a couple days before I was to send out the insurance check.

I could find general liability ($1M coverage) for $300-$500 a year. I could find professional errors of omission liability ($1M coverage) for $1133/year. I believe that the real premium was $1000/year but the extra $133 was the fee for the insurance agent who found that deal. The price of the professional liability depends strongly on the line of work; I design medical equipment which usually costs more to insure, if you can even find an insurer. I think at least 80% if not higher of the insurers refuse to touch anyone working on medical equipment.

 

[Apple Of Sodom]

I have a $1 million general liability policy that runs $185/year.

 

[Mermaidman]

I have StateFarm that charges $40-50/month on an as needed basis. If the client requires liability; then I call my agent - she faxes a binder over and starts billing my CC.
When the contract is over; a phone call stops the coverage and a check for the difference for that month is issued. . .

That sounds like a very convenient arrangement, and I'm surprised that such a setup is possible.

Anyway, I got a quote for my field of work, which is remotely medical-related, and it will cost me $500 annually for $1M/$3M of professional liability coverage.

 

[carolwyatt]

$325 for $500K

What insurance company are you using for this errors and omission insurance?

 

[carolwyatt]

I have a $1 million general liability policy that runs $185/year.

Does this cover errors and omissions from RAC audits?
What company do you use?

 

[KeithP]

This is probably not all that helpful, but I've heard that you have to be careful not to have too much liability insurance or it will make you a target for lawsuits.

How would someone know how much liability insurance you are carrying?

-KeithP

 

[jupiter57]

$1 M General Liability, Farm: $475 yr.
$2 M General Liability, Helicopter: $545 yr.
State Farm