Small Business Insurance
Whether a business has one or a hundred employees, sells products or offers services, operates from a business location or a residence, there are many types of insurance available to manage the risks of a small business. Be sure to consult a licensed professional agent who can best match you with the coverages you need for your business.
Small business owners need to be aware of what provisions in the Affordable Care Act (ACA) are specific to their business:
- LDI Bulletin 2015-07 – Defines which employers are required to provide health insurance to their employees in Louisiana.
Small Business Health Options Program (SHOP) - The SHOP Marketplace is an online health insurance exchange featuring health plan options that specifically target small employers. SHOP is open to employers of up to 50 full-time employees. By pooling insurance risks for small groups, the exchange seeks to increase small business purchasing power, provide more choices and reduce administrative complexity.
Health Care Tax Credits - Under ACA, many small businesses can qualify for tax credits to help offset the cost of providing healthcare coverage for their employees. The credits specifically target businesses that employee low- and moderate-income workers. Credits may be worth up to 50 percent of an employer's insurance premium costs.
Reporting and Notifications - As a result of new tax provisions, the IRS has implemented new ACA-related reporting requirements to which small businesses must adhere. Some business owners may be required to report the value of the health insurance provided to each employee on W-2 forms. Additionally, all employers covered by the Fair Labor Standards Act must officially notify employees in writing about the new health insurance Marketplace.
A small business owner may find a Business Owner’s Policy (BOP) to be a more cost efficient option to buying several individual policies. These policies are package products that typically include general liability, property, commercial auto, business interruption, workers’ compensation and electronic data insurance. A small business can start off with a basic business owner’s policy and later expand coverages as needed.
Small business owners who operate out of their residence need to consider several factors. First, they should recognize that mixing their home with their business can cause coverage issues. Business owners operating out of their homes may want to contact their homeowners insurer about purchasing an endorsement to their homeowners policy to cover business equipment, inventory, supplies, the portion of the home used for business purposes and liabilities resulting from the business. Or, the best option may be to purchase a standalone BOP. The key is to discuss all of this with a licensed agent to determine which options will provide the best coverage for the business.
These are some of the types of insurance a small business owner should consider:
Commercial Property Insurance provides coverage for damage to the structure and contents of the business property. Most of these policies do not cover flood so the purchase of a separate flood insurance policy may be necessary.
General Liability Insurance covers liability exposure relative to owned or leased business property and provides coverage for incidents related to business operations.
Product Liability Insurance provides protection for damages resulting from faulty products and protects the seller and manufacturer from liability losses.
Commercial Auto Insurance covers damages to vehicles used in the business, as well as liability protection and coverage for employees operating the vehicles.
Business Interruption Insurance insures against financial losses incurred while the business is not able to operate due to a covered loss event. It will also pay for the additional expenses required to resume operations.
Workers Compensation Insurance is a state mandated policy that covers injured workers and protects the owner’s liability.
Professional Liability Insurance provides coverage for the actions of licensed professionals such as lawyers and doctors, including coverage from errors and omissions.
Common Carrier Insurance provides liability coverage for entities such as trucking and airline companies that transport goods for others.
Key Person Insurance provides coverage for losses related to the death or incapacity of key personnel within the business.
Bond Insurance comes in several forms and covers such things as the payment, performance and completion of a contract.