Louisiana Business Insurance

On your list of most exciting tasks associated with starting or growing your business, getting business insurance probably isn’t at the top. Information can be hard to find, definitions and recommendations seem vague, and it seems like a job best left for another day.

It doesn’t have to be this way, though. Getting business insurance can be easier than you think. Plus, having a policy could mark a new chapter in your business and its growth. With the following information, you’ll learn the basics of Louisiana business insurance so that you'll be equipped to make the best decisions for you and your business.

Louisiana Business Insurance: The Basics

Most people are familiar with some form of insurance, typically for their health, home, or car. If you have even a vague understanding of those types of policies, then you may understand more about Louisiana business insurance than you might think.

No matter what insurance covers, it has a few basic steps:

• You choose a policy that matches your current needs, assets, or budget
• You pay a monthly or annual premium to maintain the policy
• You can file a claim if an accident occurs

The main difference between insurance policies is the scenarios they cover. While your health insurance is useful for broken bones or annual check-ups, your Louisiana business insurance would cover accidents and damages caused by your business.

We’ll review the main types of business insurance in a moment, but let's pause for some good news. Yes, Louisiana business insurance could protect your business or personal finances if you find yourself on the other side of a lawsuit.

Did you know that having an insurance policy can come in handy every day, even with the days that go perfectly well?

Here are some benefits of Louisiana business insurance that you may not be aware of:

• Showing proof of insurance could help you land more clients. That’s right, you might be able to leverage your policy to help grow your revenue. Clients want to work with a business they can trust, and before you have reviews and referrals, insurance may help.

Proving you’ve taken the extra steps to protect your business and work could convince clients to hire you.

• You can set yourself apart from scammers by displaying your Certificate of Insurance. Unfortunately, there are people in your area who might try to rip off customers.

Guess what scammers usually don’t have, though — Louisiana business insurance. Displaying your Certificate of Insurance (COI) sends a clear message that you’re a legitimate business.

• Loan applications and rental agreements may require insurance. If you need to secure funding or you are ready to rent office space, you might be asked to prove you have business insurance.

At the very least, letting lenders and landlords know you have insurance could make you a less risky client in their eyes.

General liability insurance in Louisiana

The first and most widely applicable policy to consider in Louisiana is general liability insurance. Requirements for general liability insurance in Louisiana vary. The state’s Insurance Department suggests that business owners consider this coverage.

So what’s it all about? General liability insurance typically covers third-party:

• Bodily injury
• Property damage or injury due to your product or completed service
• Personal and advertising injury
• And more

Since general liability insurance typically covers physical accidents such as falls or damages to your client's property, some states require it for jobs deemed to be riskier. For example, contractors in Louisiana often need a license and insurance.

Residential contractors need to provide proof of insurance before starting their business, but commercial contractors don’t. Here are some of the minimum insurance requirements for residential contractors in Louisiana:

• $100,000 for general residential contracting
• $50,000 for mold remediation
• $100,000 for home improvement contracting

Note that these aren’t the only requirements for general liability insurance in Louisiana, and we’ll include tips on finding laws that apply to you a bit later. Simply Business helps insure more than 80 types of businesses, and we can answer your insurance questions at 855-918-1320.

Sometimes it’s hard to grasp how general liability insurance could work in your business, which is why it helps to consider several scenarios:

• A home improvement contractor wraps up a bathroom remodel with their team and says goodbye to the happy clients. The following day, the contractor has five angry voicemails from the homeowners. What changed? Apparently, one of the contractor’s employees didn’t caulk the tub properly, and when the homeowner took a bath that evening, water leaked onto the floor below.

As a result, the homeowner demands that the contractor pay for the water damage and their ruined furniture, to the tune of thousands of dollars. Without insurance, the contractor would have to use the money they’d saved for new tools to pay the claim.

• An appliance repair company is working on a refrigerator when they accidentally make a gouge in the homeowner’s counter, and since they have to replace the entire countertop, they decide to sue the repair company for damages.

Without insurance, the repair person would have to come up with the money in their business finances, which might mean working overtime for a few months to recoup the loss. However, an insured company may be able to use their insurance policy to pay for the countertop replacement.

• A DJ is setting up for an event when they have to step outside to take a call. While they’re gone, a guest trips over the DJ’s wiring and falls down. The guest wasn’t the only thing that crashed to the floor — the DJ’s new speaker also was damaged beyond repair.

Now the DJ has to deal with an upset client, the guest’s medical bills, and buying a new speaker. When the DJ receives the guest’s medical bills, they don’t have enough money to pay for the new speaker OR the guest’s medical bills.

If the DJ had insurance, they might be able to use their insurance to help cover the medical expenses and the cost of a new speaker. Without insurance, they’d likely need to prioritize the guest’s injury and work without a new speaker for a while.

If you’re unsure if you need general liability insurance in Louisiana or you want to understand your ideal coverage limit, simply answer a few questions here. Getting free custom quotes can take less than ten minutes.

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Professional liability insurance in Louisiana

Some businesses are less likely to have physical accidents but are more likely to face negligence claims. If a client believes your business harmed them, even if you feel like you did nothing wrong, they still may sue you for negligence.

Even business owners who are found not at fault would have to pay legal fees to defend themselves.

Professional liability insurance in Louisiana usually covers legal defense costs and damages arising from:

• Slander and/or libel claims
• Negligence or alleged negligence claims
• Copyright infringement
• And more

Here are a few scenarios where business owners might be able to leverage a professional liability insurance policy.

• An architect is hired to design an add-on loft space above a garage to accommodate guests. Their calculations are just slightly off, but no one realizes it until the space is built and deemed unstable.

Fortunately, no one got hurt, but now the homeowner has to pay to have the loft redone. They decide to sue the architect for negligence and demand they help pay for the replacement.

Even if the architect stands by their work and believes it was the homeowner who gave them the wrong dimensions, they’d still need to argue their case in court. Regardless of the outcome, the uninsured architect will be responsible for some of the legal expenses.

• A videographer is about to wrap up editing on a wedding video project when they accidentally spill a glass of water on the hard drive. The hardware is ruined, and the wedding footage is lost.

As upset as the videographer is, it doesn’t compare to the newlyweds’ anger. They sue the videographer for their emotional suffering, and the business owner is facing a large bill. Fortunately, the videographer has professional liability insurance, so their policy could make things right.

• A private tutor answered a question in a study session, but the tutor gave the student the wrong information. When the test scores arrived, the student learned they scored too low to get into their dream college.

The parents and the student are furious and believe the tutor is to blame, so they sue for negligence, and the tutor has to pay for the negligence claim or defend themselves in court. Either way, the business owner could be liable for a large chunk of money if they don’t have a professional insurance policy.

Requirements for professional liability insurance in Louisiana vary. Some professionals, such as real estate agents, need professional liability in the form of errors-and-omissions coverage. Typically, it’s up to individual business owners to decide if they want a professional liability policy.

Some of the jobs we recommend this policy for include:

• Accountants
• Life and business coaches
• Photographers
• Event planners
• Travel agents
• Graphic designers
• And more

Louisiana workers compensation insurance

The third key business insurance policy you may need is workers compensation insurance. This policy typically covers the costs for an employee who becomes sick or injured on the job.

If you have employees, you likely need Louisiana workers compensation insurance. While there are a few exceptions, most employers need to get coverage when they hire their first employee. Insurable employees include part-time, full-time, and seasonal help. Minors also are included, and even some independent contractors are insurable.

Workers compensation insurance typically covers:

• Lost wages
• Medical payments
• Rehabilitation expenses
• Death benefits

Louisiana law states that both physical and mental injuries resulting from a work accident are covered. The average workers comp claim is $41,000, so workers comp could save your finances from a serious hit if one of your employees is injured.

Other types of Louisiana business insurance

Take a moment to think about your business and everything in it. Do you have a lot of equipment? Will you use a vehicle in your business? Are you planning to work from your home or rent an office? There are many other types of business insurance that the state recommends, including:

• Commercial auto insurance. If you plan to use a vehicle in your business, even if it’s just to drive between appointments or to meetings, talk to your auto insurance agent to determine if you might need commercial auto insurance.

• Home-based business insurance. Many small businesses start in a home office or at the kitchen table. Sixty percent of businesses without employees are home based, but you might not know that your homeowners insurance typically doesn’t cover your business.

A home-based business insurance policy fills the gap between business and homeowners or renters insurance.

• Business personal property. If the value of your business equipment and tools are more than you could afford to replace, you may want to consider getting a business personal property policy. This type of coverage could help you replace damaged or stolen items.

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Louisiana Workers Compensation: What You Need to Know

Hiring an employee allows you to work with more customers, but there are business costs to consider. Besides wages, you’ll most likely need to be ready to pay the premiums for Louisiana workers compensation insurance.

Your Louisiana workers compensation policy and premium costs could depend on:

• The type of work you do
• How many employees you have
• Past work safety performance

Fortunately, the state has a Cost Containment Program to help businesses lower their workers comp premiums. Businesses can receive a 2% or 5% savings for completing safety tasks including:

• Maintaining safety levels
• Onsite consultations with the Louisiana Workforce Commission's Workplace Safety Section
• Completing a health and safety survey
• Making the workplace safer

To find answers to additional questions, check out the Louisiana Workforce Commission website.

How Much Does Louisiana Business Insurance Cost?

If you’re required to have Louisiana business insurance, you want to find an option that fits your budget. Businesses that view insurance as a “nice to have” also have to consider if the benefits outweigh the cost.

Thankfully, general liability insurance quotes can start as low as $22.50 a month* at Simply Business.

Let’s put that into perspective. The average customer property damage claim is $30,000, and a policy that costs as much as a tank of gas each month could protect you from paying that out of pocket.

It’s also worth mentioning that insurance quotes may vary based on the limits you select, so you may not have to pay for a policy that’s above your needs. Typically, your Louisiana business insurance costs depend on:

• Which policies you choose
• The size of your business
• The type of work you do

There also are ways to save money on your insurance, like bundling policies or opting for an annual premium rather than monthly payments.

If you want to find out how much insurance will cost you, use our free quote tool. Or you can chat one-on-one with one of our licensed insurance agents at 855-918-1320.

How Do I Get Louisiana Business Insurance?

Now that you’ve learned the basics of Louisiana business insurance, how do you feel? We have tips listed below for finding requirements and comparing policies if you’re ready to take the next step. Or, dig deeper into the three main policies below if you have more questions.

• General liability insurance in Louisiana is required for some types of businesses, such as residential contractors. Since accidents like property damage or customer injuries can happen in many businesses, Simply Business helps more than 80 types of companies protect themselves.

• Professional liability insurance in Louisiana could help you save costs if a customer claims you were negligent. Some industries have legal requirements in the state, but since you don’t necessarily have to do anything wrong in order to face a negligence claim, we recommend it for a wide variety of business owners.

• Louisiana workers compensation insurance is required for most employers. There are some exceptions, but you should get this policy as soon as you hire your first employee.

Ready to look for Louisiana business insurance? Here’s where to start:

• Review the list of business licenses in Louisiana, since insurance requirements are typically listed on license applications.

• Check for additional licensing or insurance requirements with your city or parish government.

• Set up a Louisiana GeauxBIZ account to create a custom new business checklist and submit business documents.

• If you perform multiple services, make sure to check requirements across all of your activities.

• Reach out to trade organizations or associations to talk to local business owners about the types of Louisiana business insurance coverage they carry.

• Compare multiple insurance quotes to find a policy that you’re comfortable with.

• Consult one-on-one with a licensed insurance agent at Simply Business by calling 855-918-1320.

Navigate Your Business Challenges with the Simply U Blog

We hope this guide helps you on your business journey! If you have additional questions about running a small business, check out the Simply U blog. There are guides to starting a business, growing your company, and more.

You also can learn all about getting a business license in Louisiana.

*Monthly payment calculations (i) do not include initial premium down payment and (ii) may vary by state, insurance provider, and nature of your business. Averages based on January - December 2020 data of 10% of our total policies sold.

This content is intended to be used for informational purposes only. It is not intended to provide legal, tax, accounting, investment, or any other form of professional advice.