Starting a funeral home is a big responsibility. Not only do you have to provide grieving families with the support they need during a difficult time, but you also have to run your business in a profitable and sustainable way.
One of the most important aspects of any business is ensuring you are adequately insured. So let’s explore your options.
Funeral Home Insurance Policy Options & Cost
The four most common types of insurance for funeral home businesses are as follows:
- General liability insurance protects you from lawsuits arising from injuries or property damage resulting from your business activities. General liability insurance can also help protect your funeral home business’ assets in the event of a lawsuit. Typical costs are $750-$2,000 per year for a small funeral home business.
- Commercial property insurance can help reimburse you for lost or damaged property caused by fire, theft, or other covered events. Average costs are $500-$1,000 per year.
- Workers’ compensation insurance helps funeral home businesses cover the costs of employee injuries or illnesses. This type of insurance can help businesses pay for medical expenses, rehabilitation costs, and other related expenses. Workers’ compensation insurance is required in all states except Texas. Workers’ compensation insurance typically costs between 1% to 1.5% of your total payroll costs.
- Business income insurance, sometimes called business interruption insurance or business continuity insurance, helps businesses recover from certain losses caused by events such as property damage, theft, or business interruption. This type of insurance can help funeral homes to cover the costs of not being able to operate for some time. It can also help companies to pay for expenses such as employee salaries, rent, and other ongoing costs.
Typical costs are $500-$2,000 annually.
Other types of business insurance to consider based on the specifics of your funeral home business include:
- Product liability insurance helps businesses protect themselves from lawsuits that may arise due to products they sell.
- Professional liability insurance, also known as Errors and Omissions (E&O) insurance, helps professionals protect themselves from lawsuits. Typical costs are $500-$1,500 per year for a small funeral home business.
- Employment practices liability insurance, also known as EPLI, helps funeral home businesses protect themselves from lawsuits that may arise from the way they employ their staff.
- Cyber liability insurance protects you from lawsuits that may arise from a data breach or other cyber incident.
- Business identity insurance protects your business from theft or misuse of your company name or logo.
- Commercial auto insurance and commercial fleet insurance protect you from lawsuits that may arise from accidents involving employees while driving for work.
- Key person insurance or key man insurance protects your funeral home business from losses that may arise from the death or illness of a key employee,
- Equipment breakdown insurance can help pay for the cost of repairing or replacing damaged equipment,
While this list of insurance options covers most funeral homes, you may be required to purchase additional coverage depending on the specific nature of your business. It is essential to speak with an insurance company to determine which policies are right for your business.
The cost of business insurance will vary depending on the type and amount of coverage you purchase. However, business owners can expect to pay a few hundred dollars per year for general liability insurance.
It is essential to talk to your insurer to ensure you have the right coverage in place for your funeral home.
How Much Insurance Should a Funeral Home Business Have?
This is a difficult question to answer, as the amount of insurance you need will vary depending on the type of services you offer and the size of your company. That being said, most insurance experts recommend that business owners purchase enough coverage to protect their assets in the event of a lawsuit.
When shopping for liability insurance, be sure to ask your insurance company about the coverage limits and supplemental coverage options available.
In summary, business insurance is an important consideration for any funeral home business. There are various types of insurance available, and the amount of coverage you need will vary depending on the size and scope of your business. Be sure to speak with an insurance company to determine which policies are right for your funeral home business.