Running your own business as a moving company can be extremely rewarding, but it isn’t without its risks. After all, you’ll be in people’s homes, moving furniture, handling their prized and valuable possessions, and getting it all to their final destination. It’s easy to see scenarios where you might accidentally damage property while navigating tight corners around a home, accidentally hurt someone during the moving process, or misplace or lose personal belongings.
That’s where the right business insurance for moving companies comes into play. If something bad does happen, it can help cover the expenses from a number of types of incidents, such as damage to people, property, and litigation costs. Thimble is one insurance company I highly recommend, as it can offer a wide range of coverages to protect you against the most common types of risks, including general liability, equipment, and auto insurance.
Mover insurance costs and coverage types
There are different types of insurance coverage you can get as a moving company. Depending on how you operate and the risks you’re likely to encounter, you may not need certain coverages.
For example, if you have a large number of employees, you may want to get workers’ compensation insurance, as there’s a greater chance that someone may eventually get injured on the job. However, at a minimum, I recommend getting general liability coverage, as it protects from the most common types of accidents involving bodily injury or damage to property.
Costs can also vary based on the details of your business, such as its location, size of the company, and revenue figures. Below are the most common types of insurance coverages and typical premium ranges for each.
Coverage types | Typical annual premium range | Purpose |
|---|---|---|
General liability | $1,000 - $1,500 | Protects against accidental damages or injuries to persons or property |
Workers’ compensation | $3,000 - $8,000+ | Covers employee expenses if they get injured on the job, such as lost wages, medical costs, and death benefits |
Business equipment | $50 - $300 | Protects your own company’s business equipment in the event of theft or damage |
Cargo insurance | $500 - $1,500 | Protects a customer’s belongings while you are transporting them |
Commercial auto | $3,000 - $10,000+ | Covers vehicles used in your moving company |
Commercial property | $1,000 - $2,500+ | Protects your office building or storage facilities that may be used to temporarily store customer belongings |
Learn more about the specific types of moving insurance coverage by clicking on them below.
General liability insurance provides coverage against claims of you accidentally injuring someone or their property. A common example could include a scenario where your moving company accidentally damages a customer’s belongings or property during a move. It can also cover accidental injuries to someone, whether it’s your client or even someone who just happens to be walking by, such as a neighbor.
It can even cover personal and advertising injuries, which can come about if a competitor believes your marketing methods are defamatory against their business. At the end of the day, I don’t recommend going without this coverage as it can cover costs associated with actual damages, as well as legal costs for your defense in court.
Check with your state rules and regulations, as nearly every state requires companies to carry workers’ compensation insurance. This insurance covers your employees in the event that they get ill or injured on the job. It can provide compensation for things like lost wages, medical expenses, rehabilitation costs, disability benefits, and much more.
If you use specialized equipment, think about the impact on your business if it were to break down. Would you be able to repair or replace it quickly? And if not, how would that affect your business? Would you have to turn away clients until the equipment is fixed? If so, you might want to consider getting business equipment insurance, as it can provide you with the means to repair or replace essential equipment more quickly should it get damaged.
Cargo insurance covers the items you’ll be transporting for your clients. It can cover replacement or repair costs against things like accidental damage or loss. Given the sentimental value of the items you could be transporting for your clients, some of them could get very litigious if any harm comes to their personal belongings. For that reason, cargo insurance is something I’d strongly consider carrying.
Commercial auto insurance can cover your business vehicles, whether it’s moving vans or trucks. It’s a requirement to have in almost all states. But even if it’s not, it’s protection I personally wouldn’t go without, given the potential damages that can be done to property and other individuals.
Commercial auto insurance involves different types of coverage, but it typically includes things like physical damage to property, damage to your own vehicle, damage you may do to other vehicles, or costs associated with injuries sustained to other persons.
If you have any physical buildings or locations, such as those used to temporarily store customer belongings, then consider getting commercial property insurance. It can help should any of your buildings suffer damage from natural disasters like hurricanes, hail, fires, and tornadoes. It can also cover damages from things like vandalism.
Factors affecting insurance costs
Determining how much an insurance company charges is complex, but at a simple level, it’s determined by how likely you are to file a claim and the expected payout. This involves analyzing your risk factors based on a wide range of characteristics, like your specific industry, location, and company size. At the end of the day, insurance companies must charge enough to not only cover the probability of expected insurance payouts, but also enough to be profitable and cover their own operating costs.
Insurance companies each have varying risk tolerances for certain types of companies or industries. For example, if an insurance company’s business model is such that it does not want to entertain new business from a specific industry or business type, it can opt to charge extremely high rates as a way to discourage new business. On the other hand, insurance companies that want to take on the risk or want to attract new business can elect to offer low rates to attract new clients.
How many locations does your company have, where are they located, and how many individuals does your business employ? These are common items that insurance companies will evaluate in determining how much to charge you.
Revenue can also be another item that’s evaluated. In other words, companies that have regular clients, as well as those that frequently deal with high-dollar amount moves (perhaps with high-net-worth individuals who have expensive possessions that will be placed in the care of the moving company), are viewed as a bit of a larger risk.
Having a long track record free of claims, or low-dollar-amount claims, is something that insurance companies love to see. Why? It’s because you’ve established a trend of being very low risk and are therefore less likely to file claims in the future.
In many ways, this could also be indicative of your expertise as a business owner, usually a sign that you’ve established policies and procedures that reduce your risk exposure to claims.
Choosing more coverage types and high limits just means that the insurance company could possibly be on the hook for paying out more in the event of a claim. As a result, this results in higher premiums, all other things being equal.
The deductible selected is also another factor. Higher deductibles are correlated to smaller premiums because these reflect a greater monetary contribution that’s needed from the policyholder before any payout is required from the insurance company.
How to lower your insurance expenses
Business insurance for a moving company can be costly and can quickly add up depending on the coverages you select. However, by understanding the factors that go into determining how much you end up paying for insurance, you’ll be able to take the necessary actions to reduce your out-of-pocket costs.
Shop for quotes
Shopping for quotes increases your chance of getting the best deal possible. Different companies have varying risk appetites, and exploring your options could just reveal a diamond in the rough in the form of a company offering insanely low rates!
Examine your own business procedures to reduce risk
While accidents can and do happen, you can significantly decrease the likelihood of something bad happening by taking a good, hard look at your company’s operating practices, policies, and procedures. This helps minimize your risk exposure by avoiding risky situations — something that can go a long way to ensure a claims-free history and help you get low rates from insurance companies.
Choose the right coverages and deductibles
Paying for coverage you don’t need is just a waste of money. Examine your business circumstances to ensure you’re not insuring yourself for something that will never happen. Similarly, consider what you can afford for your deductible. Raising your deductible is one way to lower your premium, but be aware that you’ll be on the hook for paying that amount in the event of a claim.
Ask about your eligibility for discounts
Insurance companies sometimes offer discounts if you are affiliated with certain professional organizations. You may also get discounts if you have specific professional licenses or certifications. While it may seem tedious, you have every right to ask your insurance company to go through its list of discounts to ensure you get all the savings you’re entitled to.
Why you should consider business insurance as a moving company
The short answer here is that running a business as a moving company carries risks that could leave you open to massive financial costs. Damage to physical structures can occur when you’re in a client’s home, packing up and moving furniture. You might accidentally damage or lose a customer’s personal belongings — or, you could accidentally injure someone in the process of moving heavy items. Plus, given the personal nature of the items you could be dealing with, unhappy clients could easily resort to litigation if they’re unsatisfied with your services.
Even if you’ve done nothing wrong, having the proper insurance can help pay for your legal defense costs. Lawyers aren’t cheap, and legal expenses can quickly add up. In the event that you’re found liable for something, you’ll definitely want the insurance coverage to help you resolve the aftermath.
Where to look for business insurance as a moving company
You have two main options for where to get insurance coverage as a moving company. You can opt for individual insurance carriers, or you can work with an insurance broker. If you’re comfortable and knowledgeable with insurance terminology and have time to research companies and get quotes, I recommend considering individual insurance carriers.
Otherwise, you might do better with an insurance broker. That way, you’ll get guidance on coverages and companies suitable for your business circumstances. The downside with brokers is that specific questions about the policy might need to subsequently be routed to the insurance carrier themselves, as they may not always have all the answers or capabilities to manage your policy.
Of course, you can also consider my picks for the best general liability insurance companies as a starting point. Many carry a wide range of policies outside of just general liability, so you can still get comprehensive protection for every aspect of your moving company.
Frequently asked questions (FAQs)
At a minimum, you should consider getting general liability, workers’ compensation, and commercial auto insurance. Other coverages will be dependent on whether you’ll encounter certain scenarios in your day-to-day, as well as your own appetite for risk.
Business insurance for a moving company generally starts at around $1,000 a year, and moves up in cost from there, depending on the details of your business and the coverages you opt to get. Businesses with larger operations will generally pay more, as they’ll be more likely to have accidents occur. Over the past few years, business insurance costs have been on the rise, so keep that in mind as your renewal premiums could also see an uptick in cost.
Life is unpredictable, and accidents happen. Insurance is there to protect you against costly mistakes that could place a huge financial burden on your business or otherwise force you into bankruptcy. In most cases, the price you pay for insurance can be well worth the amount of protection it affords your business.
Bottom line
As a moving company, you’ll face a lot of risks. From accidentally injuring other people to potentially damaging valuable client property, these could be costly mistakes that could place a huge financial burden on your business. That can all be avoided, however, with the right amount of business insurance. And for that, I recommend Thimble, a company that places a large emphasis on affordability and flexibility for newer companies.
