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Which insurance policies are recommended for Birmingham businesses?
Birmingham is a growing hotspot for small businesses, with ample opportunities for new entrepreneurs. Protect your Birmingham business with these insurance products.
General liability insurance
General liability pays for legal costs from customer accidents, along with defamation and copyright infringement claims. Commercial leases in Birmingham often require this coverage.
BEST FOR
- Customer accidents at your business
- Damage to a customer's property
- Slander and other advertising injuries
Professional liability insurance
A professional liability policy covers legal costs related to claims of negligence, such as advice that caused a client to lose money. It's sometimes called errors and omissions insurance (E&O).
BEST FOR
- Mistakes that cause financial loss
- Accusations of professional negligence
- Missed deadlines
Cyber liability insurance
Cyber insurance helps small businesses in Birmingham recover after a data breach or a cyberattack. Every business that handles customer information should have this coverage.
BEST FOR
- Data breach notification costs
- Fraud monitoring services
- PR campaigns after a breach
Business owner’s policy
A business owner's policy, or BOP, is an affordable way to buy general liability coverage and commercial property insurance together. It's recommended for low-risk small businesses.
BEST FOR
- Customer slip-and-fall injuries
- Damaged business property
- Theft and vandalism
Workers’ compensation insurance
Workers' comp is required for Birmingham businesses with five or more employees. It also covers work-related injuries for sole proprietors, which health insurance may deny.
BEST FOR
- Medical bills from job-related injuries
- Disability benefits
- Legal fees from workplace injuries
Commercial auto insurance
All vehicles owned by Birmingham businesses must be covered by commercial auto insurance. This policy primarily covers injuries and property damage caused by your vehicle.
BEST FOR
- Injuries from an auto accident
- Damage caused by your vehicle
- Lawsuits from an auto accident
Errors and omissions insurance
E&O insurance protects consultants and professional services against legal defense costs from dissatisfied clients. It's also called professional liability insurance.
BEST FOR
- Errors and oversights
- Breach of contract
- Professional negligence
Commercial property insurance
This policy covers physical damage to a Birmingham business's building and its contents, including any computers and equipment. You can bundle it with general liability in a BOP.
BEST FOR
- Burglaries
- Fires
- Storm damage
Commercial umbrella insurance
An umbrella policy provides coverage once the limit is reached on your underlying general liability insurance, commercial auto insurance, or employer's liability insurance.
BEST FOR
- Customer lawsuits
- Auto accident lawsuits
- Employee injury lawsuits
Looking for different coverage? See more policies.
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Which business insurance policies are required in Birmingham, AL?
State and local laws determine the type of insurance solutions you need. These policies help you comply with Alabama business insurance requirements.
Workers' compensation insurance
Alabama state law requires all businesses with five or more employees to carry workers’ compensation insurance. This includes full-time and part-time employees with few exceptions, including domestic employees, casual employees, and farm laborers.
While not required, Birmingham sole proprietors and independent contractors should also consider workers' comp to protect themselves from work-related injuries.
Workers' compensation insurance pays for medical costs from job-related injuries and illnesses. It also provides disability benefits for injured Alabama workers.
Most workers' comp policies include employer's liability insurance, which protects employers against legal costs related to worker injuries.
Commercial auto insurance
From Huntsville to Tuscaloosa, the state of Alabama requires commercial auto insurance for all vehicles that are owned by a business. This insurance policy pays for legal defense costs and property damage after an auto accident.
Alabama small businesses must meet the state's minimum requirements for auto liability coverage:
- $25,000 bodily injury liability per person
- $50,000 bodily injury liability per accident
- $25,000 property damage liability per accident
Keep in mind that this is the minimum you're required to carry. It's worth considering higher limits, given the potential cost of a lawsuit.
Trucking companies or businesses with vehicles that have an Alabama Department of Transportation serial number likely need additional coverage to comply with regulations.
If you need business insurance coverage for a personal, rented, or leased vehicle, you may want to consider hired and non-owned auto insurance (HNOA) instead.
How much does business insurance in Birmingham cost?
Small businesses in Birmingham don't have to pay a lot for commercial insurance. Here are a few average costs for Alabama businesses:
General liability: $48 per month
Workers' comp: $119 per month
Professional liability/E&O: $100 per month
Business insurance costs depend on factors such as:
- Type of business
- Business revenue
- Business operations
- Number of employees
- Policy limits and deductibles
- Claims history
FAQs about Birmingham business insurance
Review answers to common questions about Birmingham business insurance.
How do I get a certificate of insurance for my business?
Sometimes small business owners need to get insured quickly to sign a contract or other agreement.
With Insureon, you can meet your business insurance needs and get same-day coverage in three simple steps:
- Fill out our easy online application to get quotes from top-rated insurance companies.
- Choose the insurance option that suits your coverage needs and pay for it online.
- Download a certificate of insurance by logging into your account.
Our licensed insurance agents will help you get the right coverage for your small Birmingham business that matches your specific needs and your budget. Most businesses receive their certificate of insurance within a few hours of applying for quotes.
Can my business be held liable for a data security breach?
Your business could be held responsible for a data breach, which is why cyber insurance is so important. Small businesses are a common target of cyberattacks since they often have fewer security measures in place.
Alabama's data breach laws require Birmingham businesses to notify any residents whose personal information is exposed in a data breach within 45 days of being discovered.
Your business could also end up paying for a data breach investigation, a PR campaign, and other costs related to a breach or cyberattack.
Cyber insurance covers these costs and provides resources so you can get back to business fast.
Does my industry affect Birmingham insurance requirements?
Yes, the city of Birmingham may have special requirements for business insurance and bonds, depending on the type of work you do.
All Birmingham businesses are required to have a business license if they're operating within city limits. Separate business locations are required to carry their own license.
Here are a few examples of businesses with other obligations:
- Contractors need commercial general liability insurance to operate in Alabama. They might also need a surety bond to sign a contract or bid on a project.
- Real estate agents and brokers are not required to carry errors and omissions insurance (E&O), sometimes called professional liability insurance, but it's highly recommended and may be required by some real estate agencies.
- Cannabis cultivators and integrated facilities must carry $2 million in liability and casualty insurance.
- Physicians aren't required by law to carry malpractice insurance, but you may need it to work in some healthcare facilities.
Check with your local laws and industry requirements before beginning operations within Birmingham.
How can I get help starting a small business in Birmingham, AL?
The Magic City's low cost of living and fast-growing small business culture make it a fantastic place for new businesses to thrive.
To help you get started, here's a list of local organizations available to provide guidance and resources:
- The Birmingham Public Library hosts a small business resource guide with databases and helpful resources for entrepreneurs.
- The Birmingham Business Resource Center helps local businesses grow with individual counseling, business plan assistance, workshops, and more.
- Greater Birmingham Small Business Development Center provides business resources for small businesses and aspiring entrepreneurs.
- The Department of Innovation and Economic Opportunity serves entrepreneurs pursuing business ownership and development through programs, workshops, and events.
- SCORE Alabama offers free business advice and training, with support from experienced entrepreneurs from diverse industries and specialties.
- The Small Business Administration Alabama District assists entrepreneurs with funding, certifications, counseling, and disaster recovery resources.
Many lenders will require you to first obtain several types of business insurance, which is yet another reason to insure your investment.
How can I save money on Birmingham business insurance?
Small business owners can save money on insurance by comparing quotes from different insurance companies. With Insureon, you can get free business insurance quotes from top-rated providers by filling out one easy application.
There are a few other ways to save, such as:
- Bundle policies for a discount. The most popular option is a business owner's policy.
- Choose less expensive policy options, such as lower limits or a higher deductible.
- Focus on workplace safety and risk management. Fewer accidents means fewer claims, which helps keep your premium low.
Learn more about how to find cheap business insurance.