Business Insurance for Web Designers

Business Insurance is designed to protect a business owner's financial assets and is an essential investment for a web design business.

This article will cover the main insurance coverage for web design businesses, general liability insurance, and suggest other policies that are suitable for this business.

Recommended: Use our dedicated small business insurance provider, Next Insurance, to get a quote now!

General Liability Insurance For Web Designers

All businesses, regardless of industry, face risks that should be covered by insurance. The most common and comprehensive type of policy business owners invest in is general liability insurance.

Some of the risks general liability insurance covers are:

  • Bodily injury
  • Property damage
  • Medical payments
  • Legal defense and judgment
  • Personal and advertising injury

While businesses aren’t legally required to carry general liability insurance, operating without it is extremely risky. If your business is sued, you could end up facing fees totaling hundreds of thousands of dollars (or more). Having a sufficient general liability insurance policy in place to help compensate for these damages is the only way to prevent this type of event from devastating your business.

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Common Situations That General Liability Insurance May Cover For A Web Designer

Example 1: You are visiting a client’s videography business. He takes you on a tour of the facility. While on the tour, you trip over a cable and fall into a stack of equipment, breaking numerous items. Your general liability insurance covers damages you cause to customer property, so you should be able to get help from your insurer.

Example 2: One of your competitors emails you and tells you that she is suing you for libel. Your general liability insurance policy will pay for your legal fees, including the cost of your attorney and the cost of a settlement if one is necessary.

Example 3: A client is coming into your place of business for a consultation when she slips on some ice and breaks her arm. She demands that you pay for her medical treatment because she thinks you are responsible for the ice accumulation. Your general liability insurance will likely cover this cost.

Of course, this is not an exhaustive list of perils a general liability insurance policy will cover, and some conditions may result in a particular peril not being covered. It’s always best to talk to your agent in-depth about the specifics of your policy to avoid blind spots in coverage.

Learn more about the risks covered by general liability insurance.

Cost Of General Liability Insurance

The average web designer in America spends between $400-$700 per year for $1 million in general liability coverage.

Check out the chart below for a snapshot of average general liability insurance expenditure across a variety of industries:

Graph showing average price of general liability insurance prices per industry

Several factors will determine the price of your policy. These include your:

  • Location
  • Deductible
  • 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.

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Other Types Of Coverage Web Designers 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 web designers should obtain:

Commercial Property Insurance

The equipment you use to design websites took a considerable investment on your part to acquire and maintain. If you were to lose all of your equipment, such as if a fire broke out, you would have to pay for replacing it all yourself—unless you have a commercial property insurance policy. With a commercial property policy, you can file a claim and get help replacing your property damaged by a covered event.

Professional Liability Insurance

Professional liability insurance is designed specifically for your business. It protects you in the event that you make mistakes or are accused of making mistakes by a client. If a client decides that your services has damaged their business and sues you for damages, your professional liability insurance will pay for your legal fees. It will also pay for the cost of a settlement if one is required.

Types Of Coverage Some Web Designers May Need

In addition to the policies outlined above, there are a few other types of coverage your web design 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.

Home-Based Business Insurance

If you run your web design business out of your home, it is important to contact your homeowner’s insurance provider to find out if you have adequate protection for your business. Many times, a homeowner’s policy will not protect you from accidents resulting from business activities. It is usually best to have a home-based business policy as well, either purchased on its own or added to your existing homeowner’s policy.

Commercial Umbrella Insurance

With a commercial umbrella insurance policy, you have additional protection beyond what your general liability insurance policy offers. If you find yourself in a situation where your general liability insurance limits are exceeded—like if you lose a major lawsuit—then your umbrella policy will kick in and cover the remaining damages.

Additional Steps To Protect Your Business

Although it’s easy (and essential) to invest in business insurance, it should not be your frontline defense. Yes, insurance will compensate for your business’ financial losses after an incident occurs, but it’s much better to avoid losses altogether.

With this in mind, here are several things you can do to better protect your business:

  • Use legally robust contracts and other business documents. (We offer free templates for some of the most common legal forms.)
  • Set up a limited liability company (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.
  • Streamline your business’ internal processes. This will remove unnecessary variables from common tasks and create a safe, consistent environment for conducting business.
  • If your business is an LLC, look into LLC Insurance.

Steps After Getting Business Insurance

Depending on where you are in your business building process, here are some other actions you may need to take before getting started:

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.

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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 business?

You should invest in 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 business from everything?

Not necessarily. Certain exceptions may be written directly into your policy, and some perils may be entirely uninsurable. Be sure to discuss the scope of your policy in-depth with your agent to avoid being blindsided by holes in your coverage.