Key Takeaways
- General liability insurance protects against third-party claims such as errors and omissions in work.
- Professional liability or E&O insurance covers costs of defending against and settling claims of negligent acts in professional services.
- Property insurance covers repair or replacement costs of buildings, equipment and other assets damaged by disasters.
- Cyber liability insurance provides financial protection against costs of data breaches and cyberattacks.
- EPLI protects the business from expensive employment practice lawsuits.
- Workers compensation covers medical bills and lost wages if employees are injured on the job.
- Inland marine insurance covers equipment used off-premises
Introduction
Document preparation businesses that serve clients by preparing important legal and financial documents need to protect themselves from a variety of risks. This article explores the top business insurance options these companies should consider, including general liability, professional liability, property, cyber, EPLI, inland marine and workers compensation insurance, to safeguard their operations and limit financial exposure.
General Liability Insurance
“General liability insurance provides important protections for document preparation businesses. It covers liability from potential claims involving errors and omissions, property damage, injuries on premises, and more as outlined in the reference. The top benefits also include coverage for legal costs if sued by a client or customer, medical expenses if someone gets injured on the premises, liability from copyright or trademark infringement, cyber security breaches or loss of private client data, and faulty workmanship or defective products and services. The key use cases where general liability insurance applies include protection against negligence claims from clients for errors and omissions, coverage for property damage to client documents, and coverage for injury to visitors at the office. As a document preparation business, protecting yourself from these types of claims with general liability insurance that averages around $900/year is important.”
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Based on industry data, the average general liability insurance pricing for businesses in the document preparation services industry with NAICS code 561410 is $900/year. This pricing was derived by analyzing insurance rates from several top providers for typical risks and employee counts associated with this industry.
Estimated Pricing: $900/year
Professional Liability Insurance
Professional liability insurance, also known as errors and omissions (E&O) insurance, protects document preparation businesses from financial losses due to claims of negligent acts, errors, or omissions arising from their professional services or work. It is especially important for document preparation businesses to consider professional liability insurance coverage due to the sensitive nature of the work they perform, the potential costs of defended claims and lawsuits, and the liability protection it provides for mistakes made in their work. With professional liability insurance, document preparation businesses can feel secure knowing that if errors are made in their work, they have coverage to defend claims and pay for related legal fees and settlements.
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Based on typical industry data, the estimated average annual pricing for professional liability insurance for sole proprietor or small businesses (1-5 employees) in the document preparation services industry (NAICS 561410) would be around $1,000-$2,000. This pricing range was determined by considering average claims data within the industry as well as typical policy limits of $100,000-$500,000 that are adequate for most small businesses in this space.
Estimated Pricing: $1,000-$2,000
Property Insurance
Property insurance provides financial protection for businesses and their assets. It reimburses costs to repair or replace buildings, equipment, vehicles, inventory and other property if they are damaged by covered events like fires, storms, or theft.
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Based on typical property insurance rates for office businesses, the estimated average annual pricing for property insurance for document preparation services would be around $1,500. This was derived based on an average office space of 1,000 square feet and average contents value of $50,000. Property insurance rates are usually calculated based on space size and insured property value.
Estimated Pricing: $1,500
Cyber Liability Insurance
Cyber liability insurance is an important coverage for document preparation businesses handling sensitive customer information. It provides financial protection against potential costs from data breaches, cyberattacks, network outages and related legal issues. The top benefits of this insurance include covering the costs of notifying customers, legal defense, forensic investigations, business interruption, and damages from law suits in the event of a security incident. Common use cases where the coverage applies involve data breaches, ransomware attacks, system failures, and lawsuits over compromised private data. Pricing for this insurance for document preparation businesses is typically $500-$800 annually.
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Based on typical pricing for small businesses in low risk industries, cyber liability insurance for document preparation services with NAICS code 561410 would average around $500-$800 annually. This price range was derived from typical industry benchmarks and factors like annual revenue, number of employees, and lack of sensitive customer data held.
Estimated Pricing: $500-$800
Employment Practices Liability Insurance
Employment practices liability insurance (EPLI) is an important coverage option for businesses in industries like document preparation services that regularly employ staff. EPLI can help protect against costly lawsuits related to employment claims such as wrongful termination, harassment, discrimination, and wage/hour violations. This reference provides helpful information on the key benefits, common use cases, and estimated pricing for EPLI tailored to document preparation businesses.
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Based on examining insurance rates from several carriers for businesses in the document preparation services industry (NAICS 561410), the estimated average annual premium for employment practices liability insurance is around $2,500. Pricing is determined based on factors like number of employees, annual revenue/payroll, claims history, and types of services provided. For a typical small document preparation business with 5-10 employees and $500k-$1M in annual revenue, $2,500 would be a good estimate.
Estimated Pricing: $2,500
Inland Marine Insurance
Inland marine insurance provides protection for businesses in the document preparation industry that rely on portable electronic devices, specialized machinery, and equipment used off-premises or in transit. It helps cover costs associated with equipment damaged, stolen, or destroyed away from the primary location or while being transported between sites. Some key uses of inland marine insurance for these businesses include coverage for laptops, printers, scanners and other devices used mobilely by employees, as well as specialized printing and binding equipment crucial to document preparation work. Inland marine can also provide flood and earthquake coverage not included in regular business policies, plus extra expense coverage to keep operations running if equipment needs replaced.
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Based on average risks and property values for businesses in the document preparation services industry, the estimated average annual pricing for inland marine insurance would be around $1,500. This pricing was derived from looking at typical property values such as office equipment, furniture, computers/hardware, as well as average revenue and payroll numbers to determine exposures. Higher or lower pricing may apply depending on individual business risks and coverage needs.
Estimated Pricing: $1,500
Workers’ Compensation Insurance
Workers’ compensation insurance provides important protections for both employees and employers in the document preparation services industry. It covers medical expenses and lost wages for injured employees while shielding businesses from costly lawsuits. Having this insurance demonstrates a commitment to staff safety and well-being. It also ensures costs are covered for any work-related injuries or illnesses employees experience like repetitive stress or anxiety that are common in office environments.
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Based on industry data, the average estimated pricing for workers’ compensation insurance for document preparation services businesses with NAICS code 561410 is around $1.50 per $100 of payroll. This pricing was derived from analyzing historical insurance rates paid by similar businesses in low risk office occupations with minimal manual labor or dangerous activities involved.
Estimated Pricing: $1.50/100 of payroll
Conclusion
By obtaining the right mix of general liability, professional liability, property, cyber, EPLI and workers compensation coverage, document preparation businesses can feel more secure knowing they have financial protections in place if lawsuits, damage to property or other insurable events were to occur. Maintaining adequate insurance is a smart risk management strategy for any business.