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What You Need to Know about Ohio Liability Insurance

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If you own a small business in Ohio, it's important to understand that the state requires certain types of insurance. In this article, we will cover what types are required and which ones might be recommended depending on your specific needs. We'll also discuss how much liability insurance typically costs for the average Ohio small business owner.

Required Insurance Coverage in Ohio

What insurance does the state of Ohio require small businesses have?

Commercial Auto Insurance

Ohio only requires small businesses to have commercial auto insurance. A commercial auto policy is required for any vehicle owner whose car is used more than 50% of the time for work purposes. Ohio law requires that every vehicle, whether it's personal or for the company, carry at least minimum liability coverage of $25,000 per person and $50,000 property damage. For bodily injury protection, you can get as high as $100,000.

Ohio auto insurance will cover your business vehicles and their drivers. Again, while seeming quite simple, many business owners assume a variety of risks by using their cars and assuming personal car insurance will assume any risk. 

Types of Insurance Ohio Businesses Should Consider

You may want to consider purchasing additional liability coverage, including some of these policies.

Business Liability Insurance

Business liability insurance—also commonly referred to as general liability insurance—is a type of small business insurance that covers "legal liability" for things like bodily injury, property damage, personal and advertising injury, and general damages. General liability protects businesses from lawsuits if someone is injured or their property damaged because of something your business did, failed to do, or sold.

Your general liability insurance coverage will include legal fees and damages in a covered claim and/or lawsuit. Punitive damages are usually not covered as they are awarded when it is determined the act was intentional. In addition, your policy will spell out maximum coverage and limits during the policy period.

It may make sense to purchase a commercial umbrella policy to cover the additional risk. Review the limits and work with your licensed insurance professional to determine what is best for your business and to get a quote.

Buildings and Property Insurance

Business property insurance covers buildings and property. As simple as that seems, several losses aren’t covered, such as flooding. Just because your business is located in leased space and not owned also does not mean you can go without this insurance.

Property insurance typically covers the building, the contents within it and the loss of income. You must have a minimum amount for this coverage based on your deductible (the amount you pay out-of-pocket before any benefits are paid).

What types of incidents are covered by property insurance? Property damage claims coverage will include perils like:

  • Fire, lightning or windstorm
  • Vandalism
  • Theft of property within the building (including money)

Business Owners' Policy

A business owner's policy (BOP) is usually offered to small businesses at a discounted rate. This type of policy typically includes general liability insurance, commercial property insurance, and business income insurance.

What is business income insurance? Also referred to as business interruption insurance, business income covers operating expenses if the business is shut down for an extended period of time. Business expenses can include things like taxes, employee payroll, rent, and other operational costs.

What are the benefits of a BOP? The main benefit is that small businesses can get all their insurance needs met with just one policy.

Home-Based Business Insurance

Do you run a business from your home? You may be wondering what kind of insurance you need to protect yourself and your family from liability, fire, theft or disaster. Consider speaking with an insurance agent to get home-based business insurance.

Cyber Liability Insurance

Nowadays it is very difficult to run an online business without having a website that can attract customers but also make you vulnerable to hackers, which is why cyber liability insurance is necessary if you run an online business. You want to protect sensitive client information. Cyber liability usually covers the cost of any damages that your website or computer system could have incurred due to a cyber attack.

If your customers are impacted by a cyber attack, your insurance company will pay for credit monitoring, identity theft protection, and cover damages up to the cyber liability limit. This includes any stolen funds, business interruption costs and public relations expenses because of a data breach.

Professional Liability Insurance

Professional liability insurance (also referred to as errors and omissions insurance) is an insurance policy that protects against claims of negligence made by customers, clients or patients. Professional liability claims can arise from a variety of actions on the part of professionals such as doctors and accountants. If you have this policy, your insurance company will cover the legal and medical expenses of any suits filed against you.

Workers’ Compensation Insurance

Every business must have workers' compensation in place to protect them if an employee is injured on the job. Some states also require additional coverage to be provided. Speak with a licensed insurance agent to determine what coverage is mandatory. Workers' compensation covers your employees if they are injured on the job. It also covers a small business if it is sued for some type of incident that happened at work, and provides income to employees who can't work while they recover from an injury or illness.

There are a number of additional insurances available to businesses. Ask your insurance agent/broker about options available for your business. Have a candid discussion about what risks your company faces while conducting your day-to-day business.

How Much Does Business Insurance Cost in Ohio?

Now that you know what to look for in Ohio business insurance, it's time to calculate how much business insurance will cost. What factors impact what you might pay for coverage?

  • The size of your business and where it's located.
  • The risk factors that your company faces.
  • Past claims and lawsuits filed against the company.
  • Liability limits you choose for coverage.
  • Coverage period (whether it's one year or three years).
  • Type of policy: named perils vs comprehensive, etc.

It should only cost about $350 per year to insure an average Ohio small business with general liability insurance or a business owner's policy.

For small business owners operating on a tight budget, there are ways to save money while still getting the coverage your company needs and deserves.

Professions Commonly Insured in Ohio

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