While it’s a good idea to have a broad range of small business insurance coverage to protect your company, there are actually only two types of insurance that are required by law in Sudbury and the surrounding areas. Failing to obtain these types of insurance will result in fines and other legal penalties, in addition to leaving you personally liable for any damages that occur.
Legally Required Small Business Insurance in Sudbury
If you operate a small business in Sudbury and you need to know your insurance responsibilities. While most insurance experts recommend purchasing a broad range of coverage, and landlords and clients may require it, the law only dictates you have two types of coverage.
If you have any employees in your Sudbury small business, you must carry workers compensation insurance. This important component of any small business insurance policy protects both your employees and yourself from the effects of a workplace injury.
When an employee is injured on the job, the effects on your business can be significant. The employee may be unable to work, requiring you to pay both their salary and that of a replacement worker. You may also be liable for any medical bills resulting from the injury, and the employee may choose to sue. All of these costs quickly add up. Workers compensation insurance covers these costs, eliminating your financial burden for injuries and disabilities that occur on the job. It also protects you against lawsuits, removing the employee’s right to sue.
Commercial Auto Insurance
Every state requires that automobiles have insurance. If you use a vehicle for company business, you are required to have commercial auto insurance. Much like personal auto insurance, this will provide protections for vehicular damage, property damage, and injuries.
If your employees use private vehicles for business purposes, you will need to have non-owned vehicle liability coverage. This will help to protect your company if the employee gets into an accident while conducting business. Personal auto insurance will often not cover damages caused during business use, so you should discuss with your insurance agent the best commercial auto insurance policy for your Sudbury business.
Other Small Business Insurance to Consider
Even though it’s not legally required, failing to purchase adequate insurance can have huge financial impacts on your business. Often, your landlord or mortgage company will require you to carry a minimum amount of property and liability insurance and clients may pass you by for a fully insured company. You should consider purchasing at least these types of insurance:
- General liability
- Errors and Omissions
You may also want cyber insurance, keyman insurance, and other coverages to more fully protect your business against a variety of risks. Your insurance agent can advise you on the best policies for your situation.
Running a small business without workers compensation and commercial auto insurance can have significant legal, as well as financial, ramifications. It’s important to be aware of your small business insurance obligations, such that your employees and your company are protected.
This material is for informational purposes only. All statements herein are subject to the provision, exclusions and conditions of the applicable policy. For an actual description of all coverages, terms and conditions, refer to the insurance policy.