Running a small business involves a significant investment. Business insurance protects your investment by minimizing financial risks associated with unexpected events such as a death of a partner, an injured employee, a lawsuit, or a natural disaster. Unless you are an employer, business insurance is generally not required by law, however, it is common practice to purchase enough insurance to cover your assets. If your business is an LLC or a corporation, your personal assets are protected from business liabilities; however, neither business structure is a substitute for liability insurance, which covers your business from losses.
Your state government determines insurance requirements for businesses. Most states require businesses with employees to pay for workers’ compensation insurance, unemployment insurance, and state disability insurance. Your state may require insurance of specific business activities. For example, if you own a car or truck and use it for business purposes, you may be required to purchase commercial auto insurance. Finally, your financial lender or investors may require you to maintain life, business interruption, fire, flood or other types of insurance to protect their investments.
Learn About Business Insurance:
- Types of Business Insurance: An overview of the kinds of business insurance policies to consider for your business.
- Insurance Requirements for Employers: If you have employees, you are required by law to purchase some types of insurance.
- Five Tips for Buying Business Insurance: Helpful information about finding and buying business insurance.
- Insurance Resources: Resources and educational materials that provide in-depth guidance on insurance matters, including links to state offices of insurance.
- InsureU for Small Business – Provides helpful information, tips and considerations about insurance for owners of small companies and home-based businesses. Produced by the National Association of Insurance Commissioners (NAIC), an organization of insurance regulators.
- Information About Insurance Companies – Covers information about insurance companies before you buy. Complied from state government department of insurance, this database includes information on complaints filed by consumers, financial information, and whether or not the company is licensed by the state.