Are You Legally Required to Carry Business Insurance?

Are You Legally Required to Carry Business Insurance?

Most are aware that there are laws requiring drivers carry at least minimum levels of automobile liability insurance. You may even know that your mortgage lender will require you carry homeowners’ insurance as long as you owe on your mortgage. But what about if you own a business? Are there circumstances when you may be required by law to have insurance on your business? The short answer is yes. The full answer is a bit more complicated however. Here are when and why you may be required to have business insurance.

If You Have Employees

If your business has employees, federal law requires you carry workers’ compensation, disability and unemployment insurance. If an employee is injured performing work-related duties and you don’t have insurance, you could be subject to fines.

If You Have Loans to Finance Your Business

If you have borrowed money to finance your business location, buy inventory or purchase equipment, your lending institution will likely require you carry business insurance to protect their interests. This insurance may not be a legal requirement but your lender may require it all the same.

If You Own Your Location

If you own a bricks and mortar location for your business, there are a couple of circumstances when insurance may be required. The first is if you have a loan on your property. Your lender will likely require insurance. The second is if you live in a state that requires business owners who own their properties to carry liability or business property insurance if you live in an area prone to natural disasters.

While all businesses may not be required to carry business insurance, you are putting yourself and business at risk if you don’t carry it. Should a customer slip and fall and sustain and injury while on your property you could be held financially responsible. If your business location or inventory is destroyed, vandalized or stolen, your losses will not be insured. If you are sued due to the actions of an employee, you may be held responsible.

Most business owners have worked long and diligently to start and build their businesses. It deserves to be protected. Business owners’ insurance can help you do that. It may be more affordable than you think. Contact one of our independent business insurance agents to discuss your business and your risks. As an independent agent, they have relationships with multiple insurance companies from whom they can request a quote. You decide on the policy best suited for you and your budget. Contact us today to get the protection you deserve.


Do you have questions about your insurance? Find an insurance agent near you with our Agent Finder

Search All Blogs

Generic filters

Buzz Your
Insurance Agent

Search for a local agent with our agent finder map.

Agent Finder

Want to learn more about our blog writer?

Read more about KayLynn's background.

Click Here

Search All Blogs

Generic filters

Read More Blogs

The Mid-Winter Meltdown: Protecting Your Home from Aging Furnace and Water Heater Failure

Mid-January system failure is costly. Learn why standard home insurance doesn’t cover your broken furnace and why you need an Equipment Breakdown endorsement now.

The Great Indoor Escape: Launching Your Mid-January Reading Challenge

Swap the screen for a spine! How to launch a simple, rewarding mid-January reading challenge to improve focus and beat the winter blues.

Cyber Traps of Tax Season: Securing Your Business Data with Cyber Insurance

Tax season is phishing season. Protect your sensitive financial data and employee W-2s with robust Cyber Insurance coverage against targeted tax fraud.

Tax Season Lifeline: Why January is the Time to Secure Estate Liquidity with Life Insurance

Tax season is here. Use Life Insurance to create tax-free liquidity for your estate and protect your family business from forced asset sales.

The Debt-Deductible Dilemma: Aligning Your Auto Policy with Post-Holiday Finances

Did holiday spending deplete your savings? Reconsider high auto deductibles—you might not be able to afford the out-of-pocket cost if you have an accident now.

Deep Freeze Defense: Essential Home Insurance Prep for January’s Peak Winter Storms

Don’t wait for the blizzard. A mid-January guide to using your Home Insurance to protect against peak winter storm damage, from ice dams to power outages.

Sparks in the Dark: The Shocking Science (and Solutions) of National Static Electricity Day

Why does everything zap you in January? Celebrate National Static Electricity Day by learning the science of the “winter spark” and how to stay grounded.

The Digital Clean Slate: Securing Your Business Cyber Insurance

Digital organization is key. An audit of your cyber policy and MFA security measures is vital to meet 2026 insurance requirements and lower premiums.

The Healthy Policy: Leveraging Your January Wellness Resolutions for Life Insurance Savings

Did you resolve to get healthier? Your improved fitness can translate into lower life insurance premiums in the new year.

Post-Holiday Adjustments: Auditing Your Auto Policy for New Drivers and Commute Changes

Did a student driver leave for school or return home? Update your auto policy’s garaging address and drivers to avoid huge claim issues.