What are the requirements for business insurance in Connecticut?
Depending on the nature of your business, you may be required to carry certain types of insurance. For example, if you operate a daycare center or are in the food industry, you’ll need to have liability insurance.
If you have employees, you’ll also need workers’ compensation insurance to cover them if they’re injured while on the job. The amount of coverage required is usually based on the number of people you employ and what type of work they do.
Laws also require commercial vehicle operators to have liability insurance.
You may not be required to carry certain types of insurance, but it’s still a good idea if it can protect your business from financial disaster due to lawsuits or other unforeseen circumstances. Consider professional liability coverage in case someone sues you or your company for negligence or malpractice. You can also consider property coverage in case your building and its contents are damaged by fire or other disasters.
What are the types of business insurance in Connecticut?
Workers’ Compensation Insurance
If you have any employees, you’re required by law to carry workers’ compensation insurance. This includes independent contractors who work for you. Workers’ compensation provides medical care and other benefits if your employees are injured or become ill in the course of their work for you. It’s important to note that workers’ compensation business insurance does not cover employees who are injured during their commute to or from work. It also does not cover employees who are injured while committing a crime or violating company policies.
General Liability Insurance
A general liability policy protects a business from lawsuits arising from injury or property damage that is caused by the business, its products, or employees. It will cover medical expenses, attorney fees, and other costs related to the lawsuit. General liability insurance policies exclude a number of common risks. For example, general liability insurance doesn’t cover damage to your own property. It also doesn’t cover employee-related liabilities like workers’ compensation.
If you need additional coverage beyond what a general liability policy provides, you can buy supplemental business insurance policies to cover specific risks.
Commercial Property Insurance
This covers your business’s physical location from damage such as fire or theft. It can also be used to replace lost income that results from damages making it impossible for you to run your business while repairs are made following a disaster.
Most commercial property insurance policies exclude coverage for the following types of damage and losses:
- Earth movement
- Water damage
- Power failure
- Neglect
- War & military action
- Governmental action
- Nuclear hazard
- Intentional loss
Professional Liability Insurance (Errors & Omissions)
This protects businesses that provide services from claims of negligence and failure to perform services correctly. For example, an accountant might make a mistake on someone’s tax return that leads to an IRS audit. The other important term to keep in mind is that your professional liability insurance policy excludes certain claims. These will differ depending on the type of policy you have, but here are some common exclusions:
- Claims involving bodily injury or property damage
- Claims involving willful or criminal acts
- Claims involving infringement of copyrights, patents, and other intellectual property rights
- Claims involving advertising injury or defamation (including libel and slander)
- Claims alleging fraud, dishonest conduct, or false statements.
How much does business insurance cost in Connecticut?
The cost of business insurance in Connecticut varies based on some factors. So, what factors go into determining the cost of your business insurance policy? Here are seven things to consider:
- The nature of your business. What kind of business are you in? Some industries are riskier than others and require more coverage.
- How long you’ve been in business. As with your personal auto or home insurance, length of time in business can affect your premiums. The longer you’ve been around, the better the rate will be (assuming there are no claims during that time).
- The size of your business and the number of employees. The more people you employ, the greater the chance for an insurance claim arising from an injury on the job or a lawsuit by an employee alleging wrongful termination or discrimination.
- Your location and facility security measures to protect against theft and vandalism. If you’re located in an area with a high crime rate, you’ll probably pay higher premiums than someone located in a safer neighborhood or community.
How to choose the best business insurance in Connecticut
Before you search for a policy, make a list of the coverage types your business needs. Your list should be based on the specific risks your business faces. Start by asking yourself questions like these:
- Do I need liability protection? If you work in a high-risk field such as construction or manufacturing, you might need additional liability protection beyond what certain policies automatically include.
- Should I have workers’ compensation insurance? Workers’ comp is required in most states, including Connecticut if you have employees.
- What will my business vehicle cost to insure? If your business owns vehicles — even just one pickup truck — don’t forget to get quotes for commercial auto insurance.
- Will I need property insurance? Most businesses will need property insurance to protect their physical assets from certain risks such as fire and theft.
- Do I need coverage for key employees? Key person insurance is designed to protect a business from financial losses caused by the death or disability of an essential employee (such as an owner or manager).