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Small Business Insurance in the Golden State
Small businesses continue to thrive in California, a state that has climbed to the fifth largest economy in the world. In fact. California contains over 3.9 million small businesses that employ more than 7 million people, making the state the largest economy in the United States and even one whose size surpasses that of Britain
California’s small businesses make up 99% of the state’s economy and employ nearly half of its total private workforce. Since 2015, the top small business sectors in state have been the accommodation and food services, health care, scientific and technical services, manufacturing, and retail industries. Small businesses in arts and entertainment, real estate, and administrative support have also experienced impressive regional growth.
Key California laws and conditions driving increased business liability rates
Even though Californians enjoy such impressive economic power, tough regulations, laws, and restrictions have had major impacts on small businesses throughout the state. California comes in fifth in the nation (after Washington, D.C., Nevada, Delaware, and New Mexico) as a locale where small business owners face the highest risk of being sued by their employees. California is known for having strict regulations around anti-discrimination and fair employment practices that subject businesses to higher scrutiny from workers – one of the main factors, for better or worse, which cause higher rates of employee lawsuits in the state.
Defendants in 1 in 5 lawsuits in California are entitled to defense and settlement payments. As a result, small businesses in California bill an average of $125,000 in claims while absorbing roughly $35,000 in deductibles themselves. While each small business is unique, insurance carriers have recommended small businesses in California carry at last $500,000-$1,000,000 in commercial liability insurance to cover bodily injury, personal injury, advertising injury, and legal defense and judgements.
Aside from commercial liability insurance, the State of California requires small businesses to obtain and carry disability insurance to cover partial wage replacement for eligible employees, and workers compensation insurance if the small business has employees.
Popular industries in California we cover
Hiscox covers business in all of California’s most prominent industries and has plans that are tailored to the specific needs of each of those industries. Some of our most popular products in California include coverage for businesses providing photography, personal training, fitness, realtor, cleaning, and esthetician services.
Professional photographers have a unique profession and operate in many different fields such as advertising, arts and entertainment, and technical design. Because of this, photographers would want to seek out a variety of insurance policies to cover everything from electronic data loss to equipment liability. Photographers in California who employ workers are also required to cover employees who may be setting up and breaking down heavy and expensive photography equipment.
Aside from equipment liability insurance, professional photographers also typically seek out general liability insurance; and even a business owner’s policy if they utilize a studio or dark room. These types of insurance policies help protect them and their employees in the event of a theft or robbery, or site mishap that could adversely affect their business’ ability to generate income.
Personal Training Insurance
Personal trainers consider a variety of insurance policies that cover many of the activities they encounter each day as fitness professionals, such as equipment, property insurance for fitness and workout spaces, and workers compensation for employees that assist in training would look to both general and professional liability insurance that would cover third-party claims for bodily injury, medical payments, and legal costs from incidents and accidents during a training session.
Personal trainers in California would also be required to purchase workers compensation insurance if they have employees working for them as trainers, assistants, accounting professionals, or other fitness and health consultants. If a personal trainer owns her own gym or training space, they might also consider appropriate forms of property insurance.
Real Estate Agent Insurance
Realtors must travel from property to property to showcase available homes and other dwellings on the market. Realtors also set up and arrange these dwellings before client showings or open houses. As realtors travel from property to property, they are also involved in cleaning and organizing the space before the arrival of potential homebuyers. As such, realtors in California tend to seek out general and professional liability insurance.
Realtors who also develop and execute advertising and media campaigns to show off available properties to potential buyers. As such, realtors have an interest in media and marketing insurance that might cover marketing and advertising collateral (like signs, brochures, business cards, billboards, etc.), media storage, and other types of insurance that photographers and videographers might purchase. Those realtors who might own their own real estate agency who have multiple realtors working under their name are also required by the State of California to purchase workers compensation insurance.
Cleaning professionals make up a vital part of California’s economy and often encounter bodily stress as they clean the nooks, crannies, and other hard-to-reach spaces in businesses throughout the state. Cleaners regularly exert physical demands upon their bodies when bending over or reaching into high places to clean, dust, and disinfect. Professional cleaning services also tend to work in crews that travel in vans that also contain their cleaning materials and equipment.
As such, those in professional cleaning services would likely seek out insurance that covers equipment (vacuums, chemicals, and other industrial machinery) and workers compensation to cover their employee’s potential back and knee injuries.
Estheticians have to be smart about the insurance they purchase for their businesses. If a mag lamp falls on a client’s face or a seaweed wrap triggers an allergic reaction, esthetician insurance coverage would be needed to mitigate those example scenarios. Legal action against businesses by clients who suffered bodily injury after equipment failure or chemical reaction can take a major toll on this industry if not for the protection various liability insurance affords.
Property insurance is often required if an esthetician owns or rents her studio space that is visited by clientele seeking services to look and feel their best. Estheticians also seek out general liability insurance that would protects them from claims such as bodily injury to a client, property damage if business is mobile, or even copyright infringement in the form of advertising injury. In California, estheticians who own their own firm and utilize a team of beauty and skin care professionals are required to purchase workers compensation insurance to cover their team.
More professions we insure in California
California workers’ compensation laws
All employers in California, are required to carry workers compensation coverage, even if they just have one employee. Workers comp coverage helps pay the costs of benefits in the unfortunate event that an employee becomes injured or sick due to the work they perform. The benefits provided under workers compensation insurance can include medical care, temporary disability benefits, permanent disability benefits, supplemental job displacement benefits, return-to-work supplement, and death benefits.
According to the National Federation of Independent Businesses (NFIB), executive officers and directors of businesses are required to be covered by workers compensation insurance, unless the business is fully owned by the directors and officers. In this case, they can choose to be excluded from coverage. Owners of businesses that do not have any employees can also opt out of coverage.
The majority of workplace injuries across all industry in California are one-time accidents (66% of all cases), repetitive motion injuries (28%), and work-related stress (6%). Of those injuries, 41% were due to slipping or falling, 15% were due to being struck by an object, 16% were a result of a car or machinery accident, 7% from lifting injuries, and 21% from other types.
The vast majority – 72% – of injured workers in California hired a lawyer to represent them in workers compensation cases. Those lawyers are paid on a contingency fee basis, meaning the lawyer is paid a percentage of any awarded settlement rather than charging an hourly fee – the main reason why most claimants approach a lawyer for their case. This can lead to an increase in the number of lawsuits that happen in the state since the fiscal barrier for litigation is low.
Insurance by policy type
If you’re a small business owner in California and you are looking for liability insurance for your business, you have to come to the right place. Hiscox does not offer a one-size-fits-all insurance plan, instead we tailor our small business insurance in California to meet your needs. Hiscox small business insurance products include:
General liability insurance, known as Commercial General Liability (CGL), protects your business from another person or business’s claims of bodily injury, associated medical costs, and damage to property. Some examples of what could be covered are below:
- Bodily injury: A client falls over their personal trainer’s gym bag and the trainer is found legally liable for the injury. A general liability insurance policy could cover the personal trainer’s subsequent claim and related medical expenses up to policy limits of liability.
- Property damage and data loss: A consultant spills coffee on a client’s server causing damage and loss of data. The consultant’s general liability coverage could cover the subsequent claim, up to policy limits, and could pay for an attorney to defend the consultant if necessary.
- Personal injury: An employee of a public relations firm is at lunch. He talks to some of his fellow co-workers about a client in a false and unflattering way. The client learns of this discussion and sues for slander. General liability coverage could cover the subsequent claim, up to the policy's limits, and pay for an attorney if necessary.
Professional liability insurance, also known as errors and omissions insurance (E&O insurance), covers another person’s claims against businesses that provide professional and personal services. Some examples of what could be covered include:
- Protection even if you haven’t made a mistake: A human resources consultant advises a client to change some internal processes to increase productivity. The recommendations are not implemented. If the client decides to sue, a professional liability policy could pay for defense costs, up to policy limits.
- Negligent acts: A consultant advises a client to update their employment practices. Six months later, the client contacts the consultant, stating a part-time employee is suing the company. The consultant left out a key requirement on the amount of hours part-time employees are permitted to work. A professional liability policy could appoint an attorney to defend the consultant, if the client sues.
Business owners policy (BOP) is a combination of general liability and business property insurance. BOP is often used to provide balanced coverage for small businesses who also want to protect their own business equipment. Some examples of what could be covered are below:
- Office insurance for fire and business interruption
- Electronic data loss insurance
- Hired or non-owned vehicle liability insurance
- Commercial crime insurance to cover the dishonesty of your employees
Workers Compensation Insurance
Hiscox now offers state-mandated workers compensation insurance to ensure that injured workers receive prompt and fair compensation for job-related injuries and diseases. In most states, like California, laws require you to pay for an injured worker’s medical care, lost wages, and death benefits. A Hiscox Workers Compensation Insurance policy must be purchased with another Hiscox business insurance policy.
How Hiscox can help your business in CA:
- Flexible payment options: We offer you the option of making monthly payments (with no fees) to help you manage your cash flow.
- Tailored insurance: Insurance custom tailored to meet your needs and save you money.
- Claims responsiveness: When a covered claim is reported, we will immediately defend you even if the claim has no basis and, if necessary, appoint an attorney.
- Worldwide coverage: We protect you for work done by your business anywhere in the world, as long as the covered claim is filed in the United States, a US territory, or Canada.
Get a fast, free quote now and get that Hiscox confidence behind your California business. If you prefer, you can call us at 1-866-283-7545 and speak with a Hiscox licensed agent, Monday – Friday, 7am – 10pm ET.
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Hiscox Customer Reviews
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Our products have been approved by the California Department of Insurance, and are underwritten by Hiscox Insurance Company Inc., and Illinois insurance company whose license number is 8754.
This information is provided to assist you in understanding the coverage we offer and does not modify the terms and conditions of any insurance policy, nor does it imply any claim is covered. Coverage is subject to underwriting and may not be available in all states.
Administered by Hiscox Inc., a Delaware corporations that is a licensed producer in all states and DC. 520 Madison Avenue, 32nd floor, New York, NY 10022. In California, Hiscox Inc. does business at Hiscox Insurance Agency (license no.: 0F09668).