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Let me guess — you’re passionate about your work and want to build a thriving business, but the thought of getting insurance doesn't exactly make you jump for joy.
Fortunately, learning about Maine business insurance doesn’t have to be intimidating as you might think. You can start the process by understanding the types of policies to consider and how to assess your needs.
Until you check out a few example scenarios where you could use business insurance, it can seem a bit abstract. Chances are you have a better understanding of how business insurance works than you think.
The mechanics of insurance are generally similar, whether you have coverage for your health, home, car, or company. The basic components of insurance are:
The only typical difference between the insurance you’re familiar with — like health or auto coverage, and business insurance — is the types of accidents that are usually covered. Just as there are different kinds of insurance for your physical well-being, you have policy options for different business scenarios.
Here are the three most common kinds:
The first type of Maine business insurance to be aware of is general liability insurance. This type of policy is one of the most common because it can help in a wide range of scenarios and can typically serve many businesses.
General liability insurance covers:
The state of Maine includes talking to an insurance agent as a useful suggested step in starting a business. The Office of Professional and Financial Regulation also suggests having liability insurance to cover your assets.
While many businesses should consider getting general liability insurance in Maine, not every company has a legal requirement to have coverage. There are a few types of businesses, such as barber and cosmetology schools, among others, with insurance requirements.
Since these rules vary among industries, it’s generally up to the business owner to decide if they want coverage. These rules can change periodically, so it's always best to check your specific business/trade’s requirements.
Why would a business pay for something they don’t need to have, though? Some of the benefits of general liability insurance that you may not have considered are:
All of this is in addition to the fact that general liability insurance in Maine could potentially save you from a big bill, or even bankruptcy, if you have an accident - up to your policy limits. Before we go any further, let’s explore a couple of scenarios.
A barber had just finished a haircut and wasn’t able to sweep up the hair before a client slipped on the hair clippings. They fall and break their wrist and decide to sue the barber. Without insurance, the barber would likely have to pay for the client's medical bills out of pocket.
An excavation business accidentally hits a sewer line at the customer’s house, making a huge mess in the front yard. The fiasco was already a headache before the lawsuit, and now the uninsured excavator has to take out a loan to cover the damages.
A concrete contractor wrapped up a job and said goodbye to the happy customer. Later, the structure collapsed and damaged the customer’s car. It turns out the concrete was defective and not due to the contractor’s actions, but the contractor still has to cover the damages. Unfortunately, the uninsured contractor had to use the money they were saving up for a new work truck to cover the cost of damages and legal fees.
Since Maine business insurance rules vary by occupation, we can’t give you a definitive answer here about your requirements.
If you want to learn about what insurance your business might need, you can talk to a licensed insurance agent at 855-968-3617. The Simply Business free quote tool also gives you custom quotes in minutes.Get your quote
Simply Business works with more than 80 types of businesses, including locksmiths, electricians, cleaners, yoga teachers, and more. If you’re a contractor, we have a complete guide to getting licensed in Maine.
If you spend most of your day sitting at a desk, the accidents and injuries typically covered by general liability insurance can seem irrelevant. Businesses that focus on providing advice or sharing their professional services have a slightly different risk — negligence claims.
If a client thinks that your work negatively impacted them, they could claim you acted negligently. Unfortunately, you could have to shell out cash whether you made a mistake or not. If you get sued, the best-case scenario is that you can prove you weren’t negligent. But even this outcome has lawyer fees. If you did make a mistake, you might have to pay for damages.
Rather than hope you can somehow bypass the perfectly human condition of making an occasional mistake, you could consider professional liability insurance. You may need professional liability insurance, but it depends on your occupation. This could give you an advantage, though. If your competitors choose to do the bare minimum and skip professional liability insurance, you could automatically stand out from the crowd if you have coverage.
Typically, professional liability insurance covers:
Some careers that can benefit from professional liability insurance in Maine include accountants, consultants, real estate agents, event planners, photographers, and more. Here are a few scenarios where professional liability insurance could help a business owner weather a storm:
As a real estate agent is about to submit an offer on a home for a client, another frantic homebuyer calls and distracts them. The agent ends up being late submitting the original offer, and the homebuyers miss out on purchasing their dream property.
The buyers are so upset with the agent that they sue for negligence. Without insurance, the agent would have to contend with the damages and possible legal fees on their own.
An exhausted accountant is in the home stretch of tax season when they inadvertently misrecord a client’s income, causing the client to owe twice as much in taxes. Eventually the client realizes the mistake and hires another tax firm to fix it.
As a result, the client is upset that they had to pay a double tax bill and two tax preparers. They sue, and the accountant has to dip into their personal savings to pay for the claim.
A photographer wraps up the final edits on a boudoir shoot and sends the files to the client. The images are gorgeous, but there’s one problem — the photographer sent them to the wrong person!
The person in the photos finds out and is embarrassed and decides to sue the photographer for mental anguish. Since the photographer is uninsured, they have to use the money they were saving up for a new set of camera lenses to pay off the angry client.
Without professional liability insurance, these business owners could have to dig into personal funds to pay the clients’ claims and legal fees. Having coverage could help to cover those costs, saving money that could be put to use elsewhere.
If you have employees, you likely need Maine workers compensation insurance. While there are a few exceptions for agricultural or domestic workers, companies with one or more employees generally need this coverage. This rule applies even if you have any part-time workers.
Workers compensation insurance can help your company pay for claims of employees who are injured or become sick on the job. This type of policy typically covers:
Accidents can happen in any workplace, and the average workers comp claim is a staggering $41,000. Having a Maine workers compensation policy can protect your business finances and give employees security.
The three types of Maine business insurance we’ve covered are broadly used, but other policies cater to your unique business needs. Here are a few other types of insurance to consider:
Home-based business insurance. If any of the accidents or injuries we’ve explored were to happen in your home office, your homeowner’s insurance policy might not cover it. If you perform any business activities at home, you might need a home-based business insurance policy to protect your business and assets.
Commercial auto insurance. Do you have a work truck or a car you drive to business appointments? If so, you might want to get commercial auto insurance. These policies could cover damage or injuries involved with your business vehicle.
Business personal property. Your inventory, tools, and equipment are an essential part of your business. If they were damaged or stolen, a business personal property policy could help you replace them.
Even if you don’t currently need Maine workers compensation, it’s helpful to know what goes into the policy's cost. After all, understanding the cost of something makes the bill less daunting.
Typically, your workers comp insurance premium depends on things like:
Your industry. The hazards related to your business activities help insurance companies calculate the risk of an accident. This means that a construction company and an accounting firm of similar sizes could have different insurance premiums.
Your company size. Larger payrolls could affect your Maine workers compensation insurance cost. Things like your incentive plans and profit-sharing also are taken into account.
Your accident history. There is often an “expected” amount of accidents in an industry, and insurance carriers will typically take this into account when writing your policy. Taking steps to manage workers comp claims, such as safety training and equipment maintenance, could help you maintain a positive record.
If you want to dig into any other specific aspects of Maine workers compensation insurance, you can review the full statute here or consult a lawyer.
Understandably, the cost of Maine business insurance is a consideration for all small business owners. When your primary focus is to make money and grow the business, any expense can feel like a setback.
Fortunately, business insurance is tailored to fit your needs and grow alongside your business. This means a two-person hair stylist team likely won’t have to pay as much as a 15-person tree removal company servicing multiple locations.
Generally, your Maine business insurance premium depends on:
At Simply Business, general liability insurance quotes can start as low as $25.95 a month.* That means you could protect the business you’ve worked so hard to create for about the same price as a trip to the gas station or local pizzeria.
That's not a bad trade-off considering that the average customer injury claim is $30,000.
If you want a specific price to compare against your budget, it’s worth it to answer a few questions for free custom quotes. If you prefer to speak with someone “live,” you can call one of our licensed insurance agents at 855-968-3617.
Pat yourself on the back — you just made it through a crash course in business insurance without falling asleep or throwing your computer out the window. Here’s a recap:
If you want to learn more about what insurance you might need, here are some tips for finding and comparing Maine business insurance:
Review the list of licensed professions to see if your business is included. You’ll usually find insurance requirements on license applications.
Talk to local business owners about which policies they carry, especially if they’re in the same industry as you.
Check for insurance requirements across all of the services you plan to offer.
Think about how your business will grow in the next year, and whether that could impact insurance requirements.
Visit Maine's Business Answers site to get free resources and info based on your business goals.
Search for a trade or professional organization in your industry, since they may be able to provide more information about insurance requirements for your occupation.
Compare insurance quotes across providers to find the coverage and cost that you’re comfortable with.
Download your Certificate of Insurance (COI) once you have a policy. This proves that you’re covered, and the COI may be needed to get licensed, rent office space, and more.
Reach out to Simply Business insurance agents at 855-968-3617 to answer any additional questions.
Thinking about everything you need to do in your business can quickly get overwhelming. If your mind is swimming with questions and to-dos, we can help.
If you have Maine business insurance on the brain, call our insurance agents at 855-968-3617 to ask about your specific needs. It’s also free to get custom insurance quotes online, so it’s worth checking if you’re curious.
The Simply Business blog, Simply U, is another great place to explore your business questions. There are guides for getting your business off the ground, building on your customer base, making sense of business tools and apps, and more.Get your quote
*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.
*Harborway Insurance policies are underwritten by Spinnaker Insurance Company and reinsured by Munich Re, an A+ (Superior) rated insurance carrier by AM Best. Harborway Insurance is a brand name of Harborway Insurance Agency, LLC, a licensed insurance producer in all 50 states and the District of Columbia. California license #6004217.