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As a collection agency, your business is exposed to various risks including property damage from unhappy debtors, bodily injuries sustained in road accidents, professional mistakes, and other, which can become grounds for lawsuits and claims.
That’s why getting your collection agency insured with an adequate level of cover is essential as in the event of an accident - your company will be freed from any financial liabilities.
How Much Does Collection Agencies Insurance Cost?
The cost of your collection agency insurance will vary on a number of factors including the cover you’re looking to take out, the size of your business, the type of clients your business deals with, and more.
To give you an idea, the average debt collection agency in the United States pays around $50 per month or $600 per year on general liability insurance. This policy will protect your business from lawsuits and claims related to property damage and third party bodily injuries.
As a debt collection agency - you can also be sued for professional mistakes, negligence, and malpractice. And to protect your business from such accusations - professional liability insurance is necessary. You can expect to pay around $75 per month or $900 per year for this insurance.
If your business employs any staff - worker’s compensation insurance will be necessary. This policy will cost you around $60 per month or $720 per year. It provides financial cover for medical bills, hospital fees, lost wages, and other costs in case one of your employees gets sick or injured at work.
If your collection agency travels to different addresses all the time in an attempt of collecting money from debtors - commercial auto insurance will be needed. This policy will cost you around $300 per month or $3,600 per year, and will provide your company vehicle, staff, and any third party involved in the event of a road accident.
What Types of Insurance Do Collection Agencies Need?
Collection agencies can take advantage of several types of insurance to protect the financial standing of their business in the event of a lawsuit or a claim.
Typically - the level of cover you need will depend on the state you operate out of, the number of staff your business employs, whether or not you have any company cars - and other similar factors to those above.
Please continue reading to explore the different collection agency insurance policies below:in the U.S.
Why Do Collection Agencies Need Insurance?
There are many valid reasons why collection agencies need to be protected by insurance. The biggest one by far is that when your company is insured - it will be freed from any financial liabilities in the event of an accident.
For instance, if one of your employees gets in a road accident while working - without insurance, your company will end up in serious financial and legal trouble, which can devastate your business.
On the other hand, if a professional mistake is made and your collection agency ends up seeking money from the wrong individual - that can also get your company in trouble.
And while a lot can be done to prevent such accidents from taking place - they will eventually happen, and you should be ready for them by being insured.