Can You Operate a Business Without Insurance?
“Is it illegal to run a business without insurance?” That depends. Certain coverages are required by law in different states. For instance, Florida requires workers’ compensation insurance. Operating without it means you’ll face fines and penalties. You’ll also have to pay out-of-pocket for your employee’s medical care if they suffer a work-related injury or illness.
However, even if your state doesn’t require small business insurance
coverage, it’s still a good idea to have. Business insurance helps cover:
Having the right property insurance is important for protecting your business from fires, theft and other covered losses. Another option to consider is our Business Owners’ Policy
(BOP). This bundles three essential coverages into one policy, including:
Bundling these policies allows you to save money and make one payment.
Is Small Business Insurance Required by Law?
Many states require business owners to have certain types of coverage. Even though it may not be required by law, you’ll likely need property and casualty insurance, such as:
Business insurance coverage is important for protecting your:
For instance, if your building is damaged by fire, general liability insurance can help pay for the repairs or the replacement cost
of equipment. Data breach insurance, or cyber liability coverage
, can help cover your high-risk business from data breaches, helping protect your company if information is stolen.
You may also want to consider professional liability insurance
, also known as errors and omissions or E&O protection. This can help cover your business if a customer claims there have been errors in your services.
Do All Businesses Require Insurance?
Many states require businesses with employees to have el seguro de compensación para trabajadores
and disability insurance coverage. Depending on where you live, you may also be required to carry additional coverages.
On top of getting the right insurance policies for your state, you’ll want to make sure your business follows the federal tax laws for your business. For instance, if you manufacture and sell your own products with your own equipment, you’ll likely have to pay an excise tax.1
What Is the Penalty for Not Having Business Insurance?
As you look for coverage, you may be wondering if businesses face a penalty for not having business insurance. The answer is yes, and it usually comes with a costly fine. “What’s the fine for not having insurance?” That total depends on where you live, because penalties and fines vary from state to state.
Small Business Insurance From The Hartford
If you’re worried that you can’t get business insurance that covers your company, we’re here to help. We’re an experienced property and casualty insurance company that’s been supporting business owners like you for over 200 years. We’ll work with you to make sure you get the right insurance protection that best fits your business. Whatever your small business insurance needs are, we’ve got your back. We also offer small business insurance tips
, business continuity planning
guides, remote working
guides and more to help your business succeed.
Última actualización: 17 de abril de 2023
1 IRS.gov, “Business Taxes”