Every resale business needs insurance. Knowing which type of insurance you need and the best place to get it is the next step.
This article will cover the main types of business insurance and help you find the best resale business insurance.
Recommended: Next Insurance is dedicated to matching small businesses with the right policy at the best price.
Best Insurance for a Resale Business
The most common and comprehensive type of resale business insurance is general liability insurance. We recommend general liability insurance as your first line of defense against a variety of the most general and commonly occurring claims.
Some of the risks general liability insurance covers are:
- Bodily injury
- Property damage
- Medical payments
- Legal defense and judgment
- Personal and advertising injury
While a resale business isn’t legally required to carry general liability insurance, operating without it is extremely risky. If your resale business is sued, you could face fees totaling hundreds of thousands of dollars (or more).
Find the Right Policy at the Best Rate
Using a fully online insurance provider saves time and money and offers the most accurate quotes.
Cost of General Liability Insurance
The average resale business in America spends between $400-$1,500 per year for $1 million in general liability coverage.
Compare the average cost of general liability insurance for a resale business to other professional industries using the graph below:
Several factors will determine the price of your policy. These include your:
- Number of employees
- Per-occurrence limit
- General aggregate limit
You may be able to acquire general liability insurance at a discounted rate by purchasing it as part of a business owner’s policy (BOP) rather than as a standalone policy. A BOP is a more comprehensive solution that includes multiple forms of coverage, such as business interruption and property insurance.
Start an Online Quote for Insurance
Finding the most affordable premium starts with getting accurate quotes from highly rated providers.
Common Situations That General Liability Insurance May Cover for a Resale Business
Example 1: A potential client comes to your place of business. During the visit, one of your employees accidentally knocks the woman over with a dolly stacked with boxes. She falls and breaks her elbow. Your general liability insurance policy would likely cover the costs of her medical treatment.
Example 2: You hire a marketing firm to help with a new advertising campaign. Although the response is positive, you also get an email from a competitor. He is suing you for damaging his business with your advertising. Your general liability insurance policy will pay for your legal fees, including a settlement if necessary.
Example 3: You are delivering a table to a buyer when your employee stumbles and crashes into the china cabinet of the homeowner. Your general liability insurance policy would likely cover the cost of replacing the property of your customer.
Check out our review of the Best Small Business Insurance Companies.
Other Types of Coverage Resale Businesses Need
While general liability is the most important type of insurance to have, there are several other forms of coverage you should be aware of. Below are some other types of insurance all resale businesses should obtain:
Product Liability Insurance
As a seller of products, it is important to protect yourself from liability related to those products. Product liability insurance will provide protection. Should a customer try to hold you responsible for damage or injury caused by a product you sold, your insurance will pay for your legal fees and any settlements if they are required.
Commercial Property Insurance
All of the products you purchase for resale took an investment on your part to acquire. If they were lost due to an unexpected event, like a fire, it would be expensive to replace them. Commercial property insurance helps you pay to replace your commercial property after a covered event like a fire or a storm.
In addition to the policies outlined above, there are a few other types of coverage your resale business may require depending on certain aspects of your operations. Some of these might not apply to you, so be sure to ask your agent which policies are right for your business.
Commercial Auto Insurance
If you have one or more vehicles that you use primarily for business, commercial auto insurance will provide the coverage required by law in your state. If you or an employee are involved in an accident, the insurance policy will help pay for the cost of repairing or replacing the vehicle. It will also help pay for medical treatment for those injured in the accident.
Workers’ Compensation Insurance
If you are an employer, your state most likely requires you to carry workers’ comp insurance. Your policy will pay for medical treatment for employees who are injured while doing work-related tasks. It will also help to pay lost wages for injured employees while they are unable to work.
Additional Steps To Protect Your Business
Although it’s easy (and essential) to invest in business insurance, it shouldn’t be your only defense.
Here are several things you can do to better protect your resale business:
- Use legally robust contracts and other business documents. (We offer free templates for some of the most common legal forms.)
- Set up an LLC or corporation to protect your personal assets. (Visit our step-by-step guides to learn how to form an LLC or corporation in your state.)
- Stay up to date with business licensing.
- Maintain your corporate veil.
Business Insurance Is the Best Way to Protect Your Business
If you're starting a new business, then you need business insurance. It's as simple as that. The protection offered by an LLC will protect your personal assets, but your business's assets are still open to liability in the case of a lawsuit or other loss.
Be sure that everything you've built is safe by getting business insurance.
Resale Business Insurance FAQ
Can I buy business insurance online for my resale business?
Yes, absolutely. You will need to first get a quote from an online business insurance provider like Next Insurance. Next allows you to then purchase a policy immediately and your coverage will be active within 48 hours.
What is included in a business owner’s policy?
A typical business owner’s policy includes general liability, business interruption, and commercial property insurance. However, BOPs are often customizable, so your agent may recommend adding professional liability, commercial auto, or other types of coverage to your package depending on your company’s needs.
What is the difference between business insurance and general liability insurance?
"Business insurance" is a generic term used to describe many different types of coverage a business may need. General liability insurance, on the other hand, is a specific type of coverage that business owners need to protect their assets.
Do I need insurance before I start a resale business?
You should invest in business insurance coverage for your business before your first interaction with a customer. Although the cost of insurance may seem high for a brand new business, it’s best to be proactive when it comes to protecting your assets. After all, you can’t buy insurance to cover a loss that has already occurred.
Will insurance protect my resale business from everything?
Not necessarily. Certain exceptions may be written directly into your resale business insurance policy, and some perils may be entirely uninsurable.
Is general liability the same as business owners?
A general liability insurance policy covers only liability losses. A business owner's policy covers both liability and property losses.
How do I choose the best general liability insurance?
The best general liability coverage for your business really depends on the amount of coverage you’re comfortable with and how often you expect to file a claim. A relatively safe business with a very low risk of accident or legal liability could opt for lower premiums with higher deductibles.
However, if you are in an accident or injury-prone industry or are making advertising claims about the effectiveness of your service or product, you may wish to consider more extensive coverage. We recommend using a digital insurance provider like Next Insurance.
Do I need business insurance if I already have an LLC?
An LLC doesn’t protect your business assets from lawsuits and liability– that’s where business insurance comes in. Business insurance helps protect your business from liability and risk.