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Business Insurance California

Often times when a person speaks of business insurance they are referring to one of three types of coverage; commercial auto insurance coverage, commercial property insurance coverage and commercial general liability coverage. When deciding to open a business of your own it is always a great idea to look into purchasing business insurance. While it may not be required, it is often times much more affordable than one would imagine and it can really save the client a huge headache as well as thousands of dollars should a claim occur.

When looking for business insurance for your vehicles you may find it to be a similar experience as purchasing insurance for your personal auto. You will often times be asked many of the same questions and many of the same rating factors will be used to determine the cost. It is quite common for a person’s driving record, accident history and experience to be taken into account when determining business insurance for your automobile however there may be a few extra items that the carrier may be interested in investigating to determine the amount of risk the policy will expose them to. One additional rating factor may be the type of business being performed; a client with a higher exposure to driving (taxi, delivery driver, etc.) will naturally pose a greater risk as they are going to be on the road far more often than a person who owns an office and only uses her work vehicle to meet with clients on occasion. It is important that carriers get this extra info as businesses often pose greater risks to carriers; this is because the public is more likely to sue a business for exorbitant amounts compared to an individual.

Due to the greater financial risk posed by a business, most insurers will not cover a claim if the vehicle involved was not classified as a business use vehicle. Because of this, it is very important to be sure you are including business insurance for any auto you will be using in the course of work. Be mindful this does not apply to commutes or personal dump runs for your house, only to work performed with the vehicle in the capacity of work. It may also be possible to be rated for both commercial and personal use.  Again, it is very important to keep in mind most carriers will not cover a claim if the vehicle involved was not properly classified as a business use vehicle and insured accordingly. Additionally, you will most likely want to carry limits high enough to cover you in the event that an accident occurs and you are sued and found at fault, don’t just settle for the state minimums. Again, people are more likely to look for big money out of a business. Please call us today if you have any questions or concerns regarding this type of business insurance.

The next type of business insurance coverage we will examine is property insurance. Property insurance is any type of insurance coverage that reimburses an insured who has suffered a financial loss due to their property being damaged or destroyed. Property is defined as any item with value that can be classified as real property or personal property. Real property refers to the land and all attachments, such as sheds and buildings. Personal property refers to all items of value that are not real property such as tools, furniture or office supplies. This coverage can protect you from any number of occurrences; everything from theft to fire. Because of how greatly coverage’s can vary from business to business it is important that an insured has a pretty good idea just how much coverage would be needed for them to replace a total loss of property. Once that is determined you can start asking for price quotes. Be sure to ask about exclusions to be sure you know exactly what the policy does not cover as well. Some policies may be rather inclusive while others may be somewhat strict in their rules regarding what they will and will not cover. It is also important to know if they will use actual cash value or replacement cost to settle losses. Replacement cost is the cost it will take to replace damaged or stolen property with new property. Actual cash value is determined by taking the replacement cost of the item, and then deducting the accumulated depreciation based off of age and wear.

The final type of business insurance we will be examining today will be commercial liability insurance. The coverage provided by this type of business insurance policy is designed to protect the insured financially from any claims or suits that may arise from injury or property damage when the insured is legally responsible for the damages. This could apply to a person slipping on a wet floor and injuring themselves or a mechanic who has a customer’s vehicle stolen from his yard while in his care. The type’s incidents this coverage may apply to are typically rather broad as there may be many things that can expose a business owner to fault or liability. It is best to talk to your agent or broker regarding this type of coverage to decide what is best for you and your business, both financially and coverage wise.

Every business owner in California should consider carrying an insurance policy for their business. Many California business owners have moved away from the standard general liability insurance policy and now have opted to get a California Business Owners or BOP policy in order give their businesses a broader from of protection from losses.

The Business owner’s policy combines some of the basic liability coverage with property protection and other miscellaneous endorsements. Most insurance carriers offer specialized packages that will let the business owner choose the liability limit and property limit and also select the package endorsements that will be standardized between many policies.

Historically, business owners would get a general liability policy that provides protection to the business from losses including bodily injury, property damage (for property of others), personal injury, advertising injury, and damage to rented premises. These policies are designed to bring the other party back to the position that they were in prior to a loss and are less desirable to than the new California business owner’s insurance policies.

The new policies give business owners the opportunity to get coverage for business owned personal property, and real property, such as an owned commercial building. This is crucial for many business owners. Let face it, if you owned clothing store and your entire inventory was stolen the loss could potentially put you out of business. With the right business owner’s insurance policy in place that includes theft coverage and special form cause of loss, you would not have to face this type of financial hardship alone.

Additional California Business Owners Insurance Policy Benefits

Business Income Interruption – This coverage is one of the many additional policy endorsements that you will find on most standard California Business Owners insurance policies. It was designed to protect your business from lost income due to a covered loss that shuts your business down. For instance, if you were to have a fire or crime loss that made it necessary that your business be closed your insurance policy could reimburse you for the loss of business income during the covered time frame. Many policies come with a standard one year time frame of coverage for business income interruption.

Crime Coverage – Most Business owner’s insurance policies offer crime coverage that protects the business owner from losses of moneys or securities that are from employee theft or embezzlement. These policies also normally protect from losses due to theft or burglary as well. In most cases the policy limits will be between $5,000 and $10,000. Additional coverage may be available upon request.

Replacement Cost Coverage for Property – Having replacement cost valuation of property coverage on your business owners policy can mean all of the difference in the event of a claim. This means that if you have a covered loss to your business property, the insurance company will pay the amount needed to replace the property new rather that the current value of used property.

Hired and Non Owned Auto Coverage – This coverage extends the liability limits for the use of a hired or a non owned auto during the course of the insured’s business for rented or non owned vehicles. This coverage is very restrictive and it is important that you work with your agent or broker to ensure that you fully understand what your policy offers. Not all California business owners’ insurance policies offer the same coverage.

General Liability Insurance – This is the portion of coverage that will protect your business from a liability of a loss due to bodily injury or property damage. In most cases it also includes defense costs due to a suit arising from a covered loss.

These are all just a few of the standard coverage offered on a California business owners insurance policy. You can also custom tailor your policy in other ways to suit the needs of your specific business.

What Types of Businesses Are Eligible for a Business Owners Insurance Policy?

The standard business owner’s policy is designed for small business with less than 100 employees and less than a total of $5,000,000 in gross receipts. There are also many restrictions for eligibility based on the actual type of business. For instance, a contractor would not be a good fit for many of the carriers due to the type of business. Most carriers offer coverage to more main street or retail operations. Companies that are not eligible for the programs should purchase coverage on individual policies rather than having it all packaged.

Pros to Choosing a Business Owners Policy

Low Cost – Many business owners policies actually cost less than a general liability policy buy itself. In fact, some policies are as low as $350 per year with $1,000,000 in general liability coverage and $50,000 in business personal property coverage.

Billing Convenience – If your business is eligible for a BOP policy and you are in need of property coverage and liability protection will be able to get both on a single policy. You will only need to worry about a single premium monthly payment rather than having multiple direct bills or combined finance contracts for your monthly payment.

Endorsements – Most BOP policies can be custom tailored to fit your needs with riders and endorsements. A good example would be a high traffic gas station. You may be able to increase the coverage for money and security from the standard $5,000 or $10,000 base limit.

What a Business Owners Insurance Policy Does NOT Offer

Although a California business owner’s policy offers a lot of different coverage, there are many additional insurance policies that your business may need to purchase as well. The need for additional insurance is based upon the exact operation of you business.

Commercial Auto Insurance - Even though most packages offer coverage for the use of a non owned or hire auto, they generally exclude coverage for the use of an owned auto during business. This means that if you have a business that uses their autos during the operation such as a towing business or carpet cleaning company, then you will need to purchase a California commercial auto policy as well.

Professional Liability - Another additional policy to consider would be professional liability coverage. These policies are designed to a loss as a result of an error or omission on your part. Many industries it is a standard to carry professional liability coverage for businesses like a realtor or an insurance agency. It is standard for insurance companies to ask a detailed industry specific questionnaire to determine eligibility and rating. These questionnaires ask a series of questions to help give the insurance company a feel for the business practices and safeguards that are taken to prevent exposures. It is also fairly common to request a resume for the principals of newly formed companies to determine prior experience in the industry. New businesses that have principals or owners that have substantial experience in upper management levels of prior employment can save significantly on their premiums.

Inland Marine – It is a common misperception in for business owners to think that all of their equipment is completely covered under the business personal property coverage. In fact, most policies will have a set maximum limit of coverage per item or restrictions for what is covered. Businesses that have miscellaneous tools and equipment that are being used on a daily basis away from the business or that have large equipment should speak with their insurance agent or broker regarding what they should have covered on a separate inland marine or scheduled equipment policy.

Often time’s cities and counties will include regulations requiring many business types to carry a certain amount of coverage. It is important to know what businesses these are and what coverage’s they require, failure to do so could result in trouble with the city or county. While it may not be a requirement that all businesses carry insurance, it is always a good idea. The important thing to remember is people tend to pursue larger amounts of money when suing a business, because of this you will want to have substantial coverage that can protect you from law suits. Again, business insurance is often times much more affordable than imagined and it never hurts to get quotes on higher limits so ask about them, protect yourself and your business. Give us a call today or stop by one of our convenient locations; we’re ready to help you get your business rolling.

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