Small Business Insurance in Delaware

Liz Froment

Liz Froment

Delaware Small Business Insurance

Is Business Insurance Required in Delaware?

When an employee is hurt on the job or develops a work-related illness, workers’ compensation insurance helps pay for their treatment, part of the wages they lose while recovering, and rehabilitation costs. It may also pay benefits to the family member of a worker who dies from a workplace injury.

Employers with one or more full- or part-time employees in Delaware generally need workers’ comp insurance. A few exceptions to this rule include farm workers or independent contractors, who typically aren’t classified as employees. In the construction industry, workers are presumed to be employees by default under the Delaware Workplace Fraud Act, requiring employers to meet rigorous statutory thresholds to classify them as independent contractors and be exempt from workers’ compensation requirements.

There are ways to potentially lower workers’ compensation premiums through the Workplace Safety Program, which allows businesses to earn insurance discounts if they follow safe workplace rules.

General liability insurance covers third-party bodily injury, property damage, and medical expenses claims. Delaware doesn’t require GL coverage for most businesses, though commercial landlords and clients often ask for proof of coverage before you can sign a lease or begin working.

In Delaware, some licensed trades have their own requirements. For example, pesticide applicators need a policy with at least $300,000 for bodily injury or death and $100,000 for property damage. Electricians need proof of at least $300,000 in GL coverage before the Board will issue a license. Home inspectors need at least $250,000 in liability coverage. For electricians and home inspectors, an employer’s policy can satisfy the requirement as long as you’re named on the policy.

If you’re a general contractor in Delaware, we have a complete guide to getting licensed and insured.

Professional liability insurance can help when a client alleges your work or advice caused them harm. It typically covers negligence claims, legal defense costs, and related expenses. You don’t have to do anything wrong for a client for them to claim you were negligent, and even innocent business owners can face legal bills defending a case in court.

Delaware doesn’t require professional liability coverage for most businesses. Home inspectors are the exception, and they need at least $50,000 in errors and omissions insurance on top of liability coverage, which they or their employer can carry. 

Accountants, real estate agents, and consultants commonly carry E&O coverage as well, and clients sometimes ask for proof of the coverage before signing a contract.

Most personal auto policies exclude business use, which means an accident on the clock can come back to the business owner directly. Commercial auto coverage is for vehicles that are directly involved in work, like delivery vans and equipment haulers.

Delaware requires the owner of any registered vehicle to carry insurance on it. That requirement extends to all vehicles. The state sets minimum limits of $25,000 per person for bodily injury, $50,000 per accident for bodily injury, and $10,000 for property damage. Delaware also requires personal injury protection of at least $15,000 per person and $30,000 per accident.

As of the date when this article is published, Simply Business doesn’t offer commercial auto insurance, but our licensed insurance agents can help you find providers who do.

How Much Does Business Insurance Cost in Delaware?

State-Specific Risks for Businesses in Delaware

Best Delaware Business Insurance for Your Industry

Construction crews work on active jobsites with heavy equipment, and the work can damage property that belongs to someone else. GL helps cover these claims, and workers’ compensation requirements apply once you have your first employee, and licensed trades may carry their own liability minimums.

Contractors near the coast or Delaware’s rivers may face weather risk on top of jobsite exposure. Commercial property coverage typically covers wind damage to your building, while inland marine coverage protects your damaged tools. Business interruption coverage can help replace income while a site is closed. That being said, commercial property policies often exclude flood damage, so a separate policy may be worth a look.

Delaware’s beach towns draw summer crowds, and the bars, restaurants, and lodging businesses in these locations deal with heavy foot traffic in a short season. A business owner’s policy in Delaware typically packages commercial property and general liability coverage together at a less expensive price than if a business were to buy each policy separately, which is why it’s a common starting point for these businesses.

Standard general liability policies typically exclude liquor liability for businesses that sell or serve alcohol. Liquor liability coverage may be included in your policy, depending on your carrier, whether you hold an active Delaware alcohol license, and where you operate.

Delaware’s beach towns draw summer crowds, and the bars, restaurants, and lodging businesses in these locations deal with heavy foot traffic in a short season. A business owner’s policy in Delaware typically packages commercial property and general liability coverage together at a less expensive price than if a business were to buy each policy separately, which is why it’s a common starting point for these businesses.

Standard general liability policies typically exclude liquor liability for businesses that sell or serve alcohol. Liquor liability coverage may be included in your policy, depending on your carrier, whether you hold an active Delaware alcohol license, and where you operate.

Answers to More Questions About Delaware Small Business Insurance

Delaware requires workers’ comp once you have one or more employees. Farm workers and independent contractors may be exempt from workers’ compensation requirements under the statute in certain circumstances, but an employer may still choose to provide coverage.

Incorporating in Delaware doesn’t create insurance obligations by itself. Requirements generally follow where you work, hire, and serve customers, so a company formed in Delaware but operating elsewhere usually follows that state’s rules.

Delaware’s Workplace Safety Program is a premium discount program run by the Insurance Commissioner’s Office. Businesses with at least three years of continuous workers’ compensation coverage that have paid at least $5,000 in premium over the last three years are eligible, and an inspection determines whether you qualify. There’s no penalty for applying and not qualifying.

Storm and wind damage is often covered by commercial property insurance, but damage caused by flood is not. Businesses in flood-prone areas of Delaware may want a separate policy through the National Flood Insurance Program or a private insurer.

Our Delaware customers are big fans. And you will be too.

Liz Froment

Liz Froment

Liz Froment is a writer for financial services and insurance brands. She has a BBA from the University of Massachusetts at Amherst and previously worked for State Street and KPMG. Her work has appeared in CB Insights, The Motley Fool’s Blueprint, Eastern Bank, Travelers Insurance, Western & Southern, Built, and LoopNet. She focuses on personal finance, retirement, estate planning, life insurance, business insurance, workers’ compensation insurance, business financing and banking, and SaaS budgeting tools.