What are the requirements for business insurance in Maine?
Businesses in Maine are required to carry workers’ compensation insurance for employees, and employers must carry unemployment insurance.
Beyond that, there are no mandatory business insurance requirements in Maine. However, you should always look into what kind of coverage makes sense for your business. If you have employees, you may want to consider general liability insurance. If you’ll be working with other businesses or vendors, you might need commercial auto liability or professional liability insurance.
What are the types of business insurance in Maine?
The most common types of policies cover property damage, business disruption, liability, vehicles, and workers’ compensation.
Property insurance
Property insurance covers buildings, equipment, inventory, and other physical assets against loss or damage caused by fire, storms, theft, and other covered events. Business interruption insurance covers lost income when your business can’t operate because of an insured event. Commercial property liability insurance policies have exclusions for specific risks, such as:
Floods or earthquakes
Intentional acts
Pollution
War
Liability insurance
Liability insurance covers the cost of defending against lawsuits and any settlements or judgments against your business. It helps pay for medical expenses if someone is injured on your premises or by your product. Liability insurance can also cover the cost of repairing or replacing someone else’s property if you accidentally damage it while conducting company business.
Vehicle insurance
Vehicle insurance covers company cars and trucks that are used for business purposes. The policy may also provide coverage for employees who use their personal vehicles for company business. Workers’ compensation provides benefits to employees who suffer job-related injuries or illnesses regardless of fault. Things that are not covered by the Commercial Auto Insurance Policy are listed below:
- Driving under the influence of alcohol or drugs
- Driving while suspended, cancelled or revoked
- Hired car (car is not owned by you)
- Racing/speed tests
- Using the vehicle for illegal transportation of persons/property
- Intentional damage or loss
- Damage to the property transported (cargo) in your vehicle
Professional liability insurance.
Sometimes called errors and omissions (E&O) insurance, professional liability insurance helps cover legal costs if someone sues for malpractice, negligence, or breach of contract. Professional liability insurance for businesses that provide professional services will not cover:
- Bodily injury
- Property damage
- Punitive damages
- Expenses incurred during litigation
- Criminal acts(including fraud, theft and assault)
Workers’ compensation insurance.
This type of coverage helps pay for lost wages and medical expenses if one of your employees gets hurt at work or develops an illness because of their job. It’s usually required by law if you have employees. In general, the workers’ compensation business insurance policy excludes certain types of injuries and illnesses. The following are common exclusions:
- Self-inflicted injuries
- Injuries that occur while committing a crime or during an act of war
- Injuries from horseplay on the job
How much does business insurance cost in Maine?
Every business is different, and insurance companies take many factors into account when deciding how much to charge for a business insurance policy.
Here are some of the most common factors that influence the cost of a business insurance policy:
Your Industry
Very dangerous industries like construction and manufacturing will face higher insurance costs than less risky businesses like accounting and consulting. This is because some industries are more likely to face lawsuits and liability claims than others.
Your Location
Businesses in cities with high crime rates pay more for property insurance than those located in safer areas because they’re at greater risk of theft or vandalism. Businesses located in high-risk areas for severe weather also typically pay more for property coverage.
The Size of Your Business
Larger businesses have higher revenue, which means they have more to lose in the event of a disaster or lawsuit. As a result, they typically pay more for insurance than small businesses do.
The amount of coverage you buy.
Generally, the more business insurance coverage you buy, the higher your premium will be. If you purchase $1 million in property insurance and $1 million in liability insurance, your premium will be higher than if you purchased only $500,000 in property insurance and $500,000 in liability insurance.
Liability
Businesses with a high liability profile have higher insurance premiums than businesses with low liability profiles. For example, a restaurant has a high liability profile compared to an online retailer because it has a large customer base and thus poses a higher risk than an online retailer
How to choose the best business insurance in Maine
Here are some tips on how to choose the right insurance for your business:
- Figure out what type of coverage you need. Many companies can provide a variety of policies, but not all insurers offer every type of coverage. Some may be better than others at providing certain kinds of protection.
- Decide how much coverage you need. Do some research on your industry and find out how much coverage other businesses carry. You want enough to cover your assets as well as potential liabilities — whether they’re property damages or legal fees — but you don’t want more coverage than you need.
- Financial security. Your business’s financial health can help determine how much coverage you need to buy and what types of policies are best for your situation. The cost of insurance will also affect your decision on how much coverage to purchase, as well as what types of policies your business can afford.
- State laws: In addition to considering what type of insurance is best for the nature of your business, you also need to think about what state laws require you to have. Although many small businesses try to go without it because they think they can’t afford it, workers compensation insurance is mandetory by law in Maine (though there are exceptions). This type of insurance covers medical expenses, lost wages and rehabilitation costs if an employee gets hurt on the job.