Operating a moving company can be very lucrative especially in a market where people are buying property more frequently. However, the day to day operations of a moving company are accompanied by certain unavoidable risks. These include damage to the property which the company is moving, injury to employees and damage to the vehicles of the moving company. On top of this, other risks exist which can affect any business such as natural disasters, lawsuits and operational liabilities. Many of these risks can be mitigated by the right business insurance policies. An academic study notes that, “insurance can improve the efficiency of risk management efforts”. This in turn can improve a business’s operations and leave it in a far better position if unforeseen events do occur. This article will cover the main insurance types that every moving company should have to mitigate risks and improve operations.
General Liability Insurance
General liability insurance is one of the most used types of insurance for moving companies as it provides the broadest and most comprehensive cover for businesses. General liability insurance covers a range of different risks which include property damage, bodily injury, legal bills and medical bills. All of these liabilities are ones that a moving company could easily find themselves needing to cover given the nature of their business.
There is no legal requirement for moving companies to be insured with a general liability policy but it is one of the most effective ways of mitigating the general risks associated with operating a moving company. Operating without a general liability insurance policy opens a business up to a great deal of unnecessary risk. If a moving company suffers a lawsuit and loses, the company could be liable for damages and legal fees which can easily exceed a hundred thousand dollars. A sufficient general liability policy can be the only way of covering these damages and ensuring that the business continues.
On average a moving company in the US will spend somewhere between $450 and $1000 per year for a million dollars worth of general liability insurance. This variance in price is determined by a number of business specific factors which will vary from company to company. The location of a business, its number of employees and its deductibles are some of the factors which insurance companies use to calculate the cost of cover.
Commercial Auto Insurance
Commercial auto insurance is required by state law for commercial vehicles. Each vehicle which a moving company owns must be insured. It is important to note that a moving vehicle will have a higher replacement cost than an ordinary vehicle and a business owner must ensure that their moving vehicles are insured for their full replacement value. Commercial auto insurance can be purchased through a business owners policy or BOP which includes a number of different types of insurance often at a better price than any of the policies could be purchased on their own.
Workers’ Compensation Insurance
Every state requires that a business which has employees also has workers compensation insurance. This type of insurance will cover the expenses which are incurred from an injury which takes place during the course of business. This is a common risk for moving companies given the heavy and cumbersome items which moving company employees will be required to move throughout their day.
Workers compensation insurance is necessary for every employee which a business has even if that employee is not working full time. All employees need to be covered by workers compensation insurance or a business will be liable for legal penalties as well as the risk associated with uninsured employees.
The Really Useful Information Company (TRUiC) has a detailed resource on moving company insurance which can be helpful for additional information.
A moving company should absolutely be insured against a number of risks which moving companies face during normal operations. Insurance can be the difference between a moving company shrugging off an unfortunate event and this event devastating the business. General liability insurance, commercial auto insurance and workers compensation insurance all mitigate risk and protect a moving company from the worst case scenario. Additionally, commercial auto insurance and workers compensation insurance are required by state law so no moving company should be without them.