Posted on May 16, 2014
Finding the right insurance coverage for your Massachusetts business doesn't have to be difficult. By understanding the commercial insurance options available, business owners can plan and budget for affordable coverage while protecting themselves against potential losses due to natural disaster, lawsuits, employee injuries and theft.
The State of Massachusetts requires that every business with employees carry workers' compensation insurance in the event of injury or illness of employees while on the job. If a company owns business vehicles, they must also provide commercial auto insurance with the appropriate levels of liability coverage. Property and general liability policies are not mandated by the state; however, business owners will want to protect themselves against the potential risks associated with doing business while simultaneously protecting customers and employees.
Massachusetts Liability Coverage
Although Massachusetts does not require businesses to carry liability insurance, many companies will want the peace of mind of knowing they are covered for any type of risk. Most general liability policies will protect business property from loss and damage due to fire, vandalism and theft up to the policy limits. At the same time, general liability coverage can also protect business owners from bodily injury claims, property damage and negligence.
Massachusetts liability insurance not only covers property damage and personal injuries, but it can also take care of litigation costs for lawsuits arising from the damage or injury. As with most insurance policies, there are limits of liability, and many business owners will want to consider umbrella insurance policies to take care of any risk not covered by the general liability policy. Excess insurance can be written to cover a company for public liability in cases where the general public could sue for something caused by the business. Additionally, businesses that manufacture or distribute products would benefit greatly from having product liability, which covers businesses from any damages that may occur from a faulty or harmful product.
Workers Compensation Coverage
All businesses in Massachusetts that employ workers must have workers' compensation insurance coverage. This coverage pays employee medical expenses, rehab costs, lost income and death benefits. The only exemptions to this requirement are for:
· Those who employ others to work on their homes
· Nonprofit companies without any paid staff
· Corporate officers or directors with at least 25 percent ownership that give up right to workers' comp benefits in Massachusetts
Self-employed individuals, sole proprietors and partners also have the option to include themselves on their workers' compensation policies along with any employees.
Employees have the right to opt out of workers' compensation insurance coverage; however, it must be offered by the employer. If an employer fails to provide coverage, he or she can be fined up to $2,500 per day and charged with a Class D felony.
Business owners seeking to protect their business will also want to consider commercial property insurance. Property insurance can be customized to meet business needs, and the policy will usually cover the building, equipment, landscaping, furniture, signs and even damage to other people's property. Business owners have a choice between replacement cost and actual cash value for insuring their property. They also have the choice of naming specific perils such as fire, vandalism or theft.
Commercial Flood Insurance
Businesses may request quotes from their insurance broker for commercial flood insurance. Flood insurance not only protects against flooding caused by rainstorms and hurricanes, but it also provides protection in cases where water mains break and cause flooding in offices, backed up drains and melting snow. Commercial flood insurance is available for up to $1 million with $500,000 toward the building and another $500,000 for business contents. Business owners that lease their property may also purchase content coverage of up to $100,000.
Windstorm Coverage for Massachusetts
High winds and storms can wreak havoc on properties and even damage business inventory. Windstorm insurance protects businesses from damage caused by tornadoes, hurricanes and high winds. Typically, most property insurance policies either do not provide adequate coverage or exclude wind damage. Therefore, it is essential to check with your insurance broker to determine if additional windstorm insurance coverage is needed for your business.
Additional Information on Massachusetts Insurance
To learn more about commercial insurance in Massachusetts, please contact the Division of Insurance at (800) 563-4467 or visit the website at http://www.mass.gov/ocabr/government/oca-agencies/doi-lp/.