The Cost of Small Business Insurance

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Small business insurance can cost between $150 to $1,000 per person per month depending on the type of insurance and the amount of coverage for each individual. Find out about the additional costs of liability and worker's compensation insurance with information from a financial adviser and insurance broker in this free video on business insurance.

Part of the Video Series: Insurance Tips & Facts
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Video Transcript

This is John Pinelli, financial representative, talking to you today about the cost of small business insurance. Small business insurance can often be very expensive. That's why many small businesses either choose not to go with any insurance or they choose to only insure the top-level managers or employees. So providing benefits for everyone in a small business or organization is often quite expensive if you're talking about health benefits for a small organization of, say, five to ten people. You may be talking about 300 dollars or more per person for some certain PPO type health plans. If you're talking about HMOs, which are a little bit more affordable, such as Kaiser, you may be talking about 150 to 200 dollars per person based on the coverages that are provided in the plan. Now, if we're talking about providing comprehensive benefits, they not only include health, but include things like dental, vision, disability, long-term care, life insurance, et cetera. These type of comprehensive benefits packages can be very, very expensive. You may even be looking at upwards of 1,000 dollars or more a month, depending on the amounts and types of coverage that are offered. However, it is very important in a lot of organizations to, at least, provide some sort of disability coverage or at least health insurance coverage for especially your top-level employees. And the reason I say this is because if a key person in the business is unable to work, basically, the whole business is going to lose a lot of its functionality and its ability to make money. So it's going to be important for the organization to be able to replace that employee and, at the same time, while that employee's off, that employee needs some replacement for the income that they had been earning. Now, additional types of business insurance that small businesses might look at would be like liability coverages to make sure that if someone's injured in their business or if they have any wrongdoings that they participate in, that they're covered. They're covered both from lawsuits as well as personal injury claims that could arise from someone being injured on their facilities or in their business. Many businesses are also required to have Workers' Compensation insurance. So this means if you're injured on the job, that you will be compensated through that. Workers' Compensation insurance is something that has been growing both in size and in cost. So especially in states like California, you can see Workers' Compensation insurance becoming quite a significant portion of what some of the...these companies pay in terms of their overall insurance and benefits packages. Now, the reasoning for this is many people have abused the system. There's oftentimes a lot of claims that are made, some of which are false and some of which aren't. And then also, the various dangers that are associated with an individual profession or company, such as a construction company. So this has been John Pinelli, financial representative, talking to you today about small business insurance.

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