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Starting a business in the nation’s capital is an exciting prospect. Maybe you’ve been dreaming of being your own boss for a long time. Or perhaps you’ve decided it’s time for a change.
On the list of things you need to do to get set up to begin working is understanding Washington DC business insurance. For some companies, getting this detail sorted out (i.e., obtaining a business insurance policy) can be a requirement to operate legally in DC. Other entrepreneurs might be here because they want to take a step to protect their growing organization.
No matter what brought you here today, we’ll do our best to answer your insurance questions.
Let’s start at the beginning. What is business insurance, and why would anyone buy it? Much like other types of insurance coverage, a Washington DC business insurance plan could help pay for damages or even lawsuits associated with your business.
The types of situations that are covered vary, based on the policy, but they all typically have similar benefits:
Having a business insurance policy could help protect you from going into debt or filing for bankruptcy. We just jumped from introductions to worst-case scenarios quickly. But the reality is that accidents that your insurance might encounter could be costly to cover.
The average customer injury or damage claim of those reported was $30,000. If you don’t have insurance to help with those costs and don’t have that kind of money sitting around, you might face bankruptcy. If you have spare cash in your business, you may wind up postponing upgrades or investments to pay for business accidents.
Customers may be more likely to choose an insured company. Building your reputation takes time, but showing a Certificate of Insurance (COI) could help you gain trust with customers. A potential customer knows that if there’s an accident, you might have help paying for damages. Having a Washington DC business insurance policy also shows that you’re committed to your company and customers.
Lenders and landlords may prefer to work with insured companies. If you want to get a business loan, you may need to have insurance. Showing lenders and landlords you’re insured could also help you stand out as a more viable choice than uninsured companies.
Now it’s time to talk about specific policies. As the name suggests, DC general liability insurance is helpful for many businesses and situations. This type of policy can cover physical accidents such as personal injury or property damage.
General liability insurance usually covers:
It’s easier to understand these terms when you get a sense of real scenarios as examples, rather than definitions or terms on a screen. Here are a few examples where a DC general liability insurance policy could likely help a business owner.
If the clothing store had a liability policy, they could file a claim and potentially use the insurance to pay for damages. Without insurance, the store owner would have to dip into business or personal savings to handle the lawsuit.
While they hoped to use their business savings to hire part-time marketing help, the business owner has to use the money to pay for the window replacement. If the business had insurance, they could likely file a claim to pay for the damages.
The homeowner, on the other hand, had already been having a bad day. The hole in the wall was the final straw, and they decided to sue the contractor. Fortunately, the insured contractor had general liability coverage, so paying for the damages and legal fees was taken care of.
Some contractors in Washington DC need a business license and insurance policy. Which other businesses typically need to get insured?
Some DC businesses in regulated industries need to show proof of general liability insurance to begin operating legally. Some of these occupations include:
You don’t have to wait for the District to tell you to get an insurance policy, though. Simply Business works with more than 80 types of businesses that want to protect what they’ve built.
If you’re unsure if DC general liability insurance could help your business, you can speak one-on-one with a licensed insurance agent at 855-523-0564. Getting a free custom quote online is another way to explore your options and usually takes only a few minutes to complete.
Some businesses are more at risk for an advisory accident upsetting a client than a physical one. In these cases, DC professional liability insurance could save the day.
Professional liability insurance typically covers:
What does negligence mean in this case? If a customer believes that your actions or inaction harmed them, they may sue you for negligence. Examples of alleged negligence could be an attorney who misses a deadline to submit a critical document or a tutor whose student fails an important test.
Since you don’t necessarily have to be found at fault to face a negligence claim, getting insurance is often a good idea. If you get sued, your policy could help pay for legal defense costs or the damages a client believes was caused by your work.
Specific requirements for DC professional liability insurance can vary, but it’s often optional for business owners. Some of the occupations we recommend consider professional liability include:
Having an employee means you can take on more projects, delegate tasks, or work together to get the job done quicker. There’s also something else employers are required to have — workers comp insurance.
Most employers need a DC workers compensation insurance policy. Even if you have only one employee, you may need to buy this insurance plan.
If, however, your business is set up outside DC and you carry workers compensation in that state, you typically don’t need DC workers compensation insurance as well. Some other exceptions of employers who aren’t required to have workers comp coverage include real estate agents who meet specific criteria or people with certain roles working for members of Congress.
What’s so important about DC workers comp that nearly every employer needs it? This policy helps cover the costs associated with an employee who gets injured or sick on the job. Considering that the average workers comp claim is around $41,000, an insurance policy could save you from a hefty bill.
Workers compensation insurance can cover:
While the three kinds of business insurance above cover many situations, your insurance options don’t end there. Here are a few other policies to consider:
Surety bond: A surety bond, also called a construction bond, offers financial assurance that the business will complete the project. Some DC businesses, like home improvement contractors and pawnbrokers, need a surety bond to operate legally.
Commercial property insurance: Some business insurance policies focus on your equipment and tools. If your business assets are damaged or stolen, a commercial property insurance policy could help you pay to replace them.
Home-based business insurance: Did you know that homeowner insurance usually doesn’t cover home offices? Home-based business insurance fills the gap between traditional homeowners and business insurance.
If you need to get Washington DC workers compensation insurance, it’s helpful to know what factors influence its cost.
When you buy a workers comp policy, pricing could depend on these and other various factors:
Safe workplaces are less likely to have to use their workers comp policy, so you may be able to potentially pay less if you implement safety measures. You can even apply for a premium deduction from the D.C. Office of Workers’ Compensation if you set up a Safe Workplace Program. These programs usually need to include things such as a written safety policy and a committee comprising of management and employees. Be sure to review the requirements periodically as they may change over time.
If you want to learn more about Washington DC workers compensation, visit the Department of Employment Services website.
At this point, you probably think DC business insurance sounds nice, but it might not be in your budget. Fortunately, each policy is tailored to your current needs, which means you don’t have to pay for a hefty policy you may not need.
There are also ways to save money on your insurance premiums, like bundling policies or comparing pricing between annual and monthly premiums.
Since business insurance is customized, it’s not possible to give a one-size-fits-all answer regarding how much it costs. Your insurance premiums depend on the type of work you do, the size of your business, specific location, which policies you choose, and more.
At Simply Business, general liability insurance quotes can start as low as $22.50 a month.* This price point is likely more manageable than the average reported customer slip-and-fall claim of $20,000.
The best way to understand Washington DC business insurance costs is to compare free custom quotes. You can either call us at 855-523-0564 or answer a few questions online. Either way, you’ll be able to compare plan options in just a few minutes.
That was a lot of business insurance information. Ready for a recap?
DC general liability insurance typically covers physical accidents like injury or property damage. It’s required for some industries, and we recommend most business owners to consider it.
DC professional liability insurance could help you cover the cost of damages or lawsuits if a client claims you acted negligently, for example. Since you don’t necessarily have to do something wrong in order to face a claim from an angry client, it can be a helpful policy for professional service companies.
DC workers compensation insurance is required for most employers, even if you have only one employee. This policy can cover medical bills and lost wages for employees who get injured or sick on the job.
Now that you know the basics of your business insurance options, it’s time to find any requirements that apply to you. Here are some resources and tips to use:
Review the DC guide to starting a business to understand the high-level steps. We also have a guide to getting a DC business license.
Check for your occupation on the list of business license categories. DC business insurance requirements are usually stated on license applications.
If you perform multiple services, be sure to check for insurance requirements across all job types.
Talk to local business owners and trade associations about what policies they have and like.
Download your Certificate of Insurance (COI) once you have your policy. This proves that you’re covered, and the COI may be needed to get licensed, rent office space, and more.
Reach out to our Simply Business licensed insurance agents at 855-523-0564 who can answer any additional questions you have.
Hopefully this helps you feel a bit better about your DC business insurance options and requirements. But that's just one aspect to running a business.
Struggling to name your business? Trying to make sense of small business loans? Want to learn about retaining customers? The Simply U blog has answers to those questions and more. Our blog has guides for starting, growing, and protecting your business.
*Monthly payment calculations (i) do not include initial premium down payment and (ii) may vary by state, insurance provider, and nature of your business. Averages based on January - December 2020 data of 10% of our total policies sold.
This content is intended to be used for informational purposes only. It is not intended to provide legal, tax, accounting, investment, or any other form of professional advice.
Simply Business1 Beacon Street, 15th FloorBoston, MA02108
*Harborway Insurance policies are underwritten by Spinnaker Insurance Company and reinsured by Munich Re, an A+ (Superior) rated insurance carrier by AM Best. Harborway Insurance is a brand name of Harborway Insurance Agency, LLC, a licensed insurance producer in all 50 states and the District of Columbia. California license #6004217.