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

Decoding the Past: The Origins Behind Common and Curious Sayings

Unlock the hidden stories behind everyday phrases and discover the surprising origins of familiar sayings.

Essential Foundations: Five Things Your Small Business Needs Today

Setting up for success? Here are five non-negotiable elements for your modern small business.

Confronting Your Fears: Practical Steps Towards a Fearless Life

Tired of being held back by fear? Discover actionable techniques to confront and conquer your anxieties.

Lending Your Keys: The Hidden Risks of Borrowing Your Car

Borrowing your car? Understand the hidden insurance implications before you say yes.

The Shifting Sands of Homeownership: What Happened to the Starter Home?

The starter home is fading away. Discover the factors reshaping the first-time homebuyer’s journey.

Six Men Who Captured Hearts: Universally Loved Figures in American Culture

Explore six beloved men in American popular culture.

The Uninsured Gap: Why Small Businesses Are Missing Crucial Protection

Why small businesses need more insurance.

Beyond “How Was Your Day?”: Engaging Your Kids with Deeper Questions

Get your kids talking with these open-ended questions.

The Rise and Fall (and Possible Return?) of the American Minivan

The minivan’s journey: from family icon to potential comeback.

Out with the Old: 7 Home Upgrades That Pay You Back

Upgrade these 7 outdated home features now.