What Type of Coverage Do I Need?

While general liability insurance isn't typically legally required, it helps protect you and your business from the potentially crippling costs when lawsuits arise, and promotes ease of doing business. There may be circumstances where you're required to show proof of general liability insurance when signing a contract or applying for a license in specific states. Certain customers, especially large organizations, may have general liability insurance requirements before they'll hire you as a vendor. General liability insurance may be required for some types of professional licenses, such as plumbing or electricians. Finally, property management firms may require that you have general liability insurance before they'll rent you space.

General liability insurance is a smart starting point for business protection. However, it doesn't protect against every claim that might arise. Claims related to the quality of your work or professional negligence generally are not covered under general liability insurance. For protection against the costs of these types of claims, you can purchase professional liability insurance or E&O (Errors and Omissions) insurance. You can customize general liability insurance coverage to address the needs of your business. For example, you may also want to consider specific types of liability insurance, such as liquor liability or pollution liability, that provide relevant coverage for risks unique to your business. For additional protection, an umbrella policy can provide higher limits of insurance to supplement your primary general liability coverage.

Yes, if you own, lease, hire or use vehicles for business, you should at least carry liability coverage. Most states require liability coverage for owned autos. If your business moves goods or people across state lines, liability coverage is a federal law. For larger commercial vehicles, you may need commercial truck insurance. You need commercial auto insurance if: You use vehicles for business. A vehicle has a commercial license plate or tag. You need commercial auto insurance if you or your employees use your vehicle as part of your business, such as: Driving clients to the airport. Traveling to sales calls. Taking packages to a shipper. Shopping for office supplies. You may need additional coverage for things like: Delivering food, products or publications. Acting as a chauffeur, taxi or limo service. Transporting equipment and flammable or hazardous material. Towing vehicles, moving freight or trucking.

If your vehicle is used for business, then yes. A commercial auto insurance policy protects your business and covers commercially owned vehicles used in business. A personal auto policy covers personally owned vehicles used for personal use.

Typically, if you issue a W-2, you need workers comp insurance. The workers comp system is governed by state statute and rules around coverage for benefits and penalties for not insuring your employees vary by state. For example, California generally requires workers comp insurance as soon as you have one employee.

An employee could take legal action for a workplace incident even if you have workers comp insurance. For example, an employee who is not subject to the workers compensation law might take legal action if they believe an accident is due to negligence on your part. A workers comp policy includes Employers Liability insurance. This coverage may help cover legal costs, including a possible settlement or judgment, in a lawsuit against you for workplace accidents that are not covered by a standard workers comp policy. Your employees are your greatest asset. Workers comp insurance helps protect them and support you so together you can stay focused on growing your business.

While it may not be required by law, a property and casualty insurance policy is highly recommended for all business owners and building owners. Furthermore, your landlord or lender may require you to carry property insurance to protect their investment.

In many cases, business owners lease space to run their operations. If you fall into this category, check your lease to review your obligations in terms of insurance. In some cases, sole tenants will be responsible for insuring the building or must continue paying rent even if the space is destroyed. It’s a good idea to review the lease with your insurance agent to confirm that the insurance coverage you choose is sufficient and will protect you in the event of damage or loss of the property.