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If you live in Minnesota, you may know it as the "Land of 10,000 Lakes," but did you know that it's also the land of over 500,000 businesses?
What's even more impressive is that 94% of businesses in Minnesota are considered small, with fewer than 50 employees. Unfortunately, despite how many business owners make their living there, it's not a simple task to explore Minnesota business insurance and how it may benefit you.
So we've done the research for you. In this article, we'll cover different coverage options to consider, how they may be able to benefit your business, and how to begin exploring policies.
Here we go!
Before we get into how general liability insurance in Minnesota could potentially positively impact your business, let's talk about what general liability coverage is and how it works.
General liability insurance coverage could help your business in the event that a customer sues you for:
You may think that because you're just getting started or because you take precautions, that you don't need general liability insurance.
But consider this: a customer doesn't have to be justified to make a claim against you. Hence the word, "claim."
43% of small business owners surveyed reported having been involved in or threatened with a civil lawsuit. Despite being as careful as you possibly can, you could fall into that statistic. And if that happens, you'll want to have coverage.
Depending on your profession, you may be required to have a general liability insurance policy. For example, if you're a licensed contractor in Minnesota, you'll typically need to have general liability coverage.
Let's look at a few examples of how general liability insurance in Minnesota could come in handy:
Let's say you're a general contractor helping to build an extension to a customer's house. While you’re walking back to your truck, a nail falls out of your toolbelt, which you didn’t notice. Later that day, your customer steps on the nail on their way into the house.
The nail punctures their foot and they have to go to the emergency room for treatment.
Without general liability coverage, you may need to pay for your customer's medical bills out-of-pocket, as well as any legal fees, if a lawyer gets involved. With your general liability policy coverage, though, it could help cover those costs that could otherwise be a substantial hit on your business.
You're a professional cleaner and you've been hired to clean an apartment before new tenants move in. You use a cleaning product that you've used hundreds of times before, but this time it leaves an unsightly stain on the kitchen counter.
The property manager is furious and demands that you pay to have the countertop replaced. Without general liability coverage, you may be forced to pay for that countertop out of your personal or business bank account.
And countertops aren't cheap! This is the kind of cost that could put you into debt when you're starting out.
With a general liability policy, you'd likely have coverage to help with the cost of the countertop replacement.
You're a photographer and are hired by a family to do a photoshoot when everyone is home for the holidays. During the photoshoot, a family member trips on one of your studio light cords and breaks an arm.
The family sues you for the relative’s medical bills, as well as for their lost time. Since the injured family member is wearing a cast, they don't want to be in the photo. The family will have to wait for months until they can get together again.
General liability insurance could help to cover medical costs, as well as legal representation to help settle the claim, if one is filed. Without a policy, though, you could risk not only losing a lot of money paying your client’s family member’s medical expenses, but also may end up losing a long-term client in the process.
In all of these cases, without general liability insurance in Minnesota, the business owners may have to pay bills that they can’t afford, which then put their businesses into debt.
When you're just starting out, it's a good idea to keep roadblocks to your business's growth out of the way. Debt like this could potentially slow down your progress.
Professional liability insurance in Minnesota also helps to protect businesses, but this coverage comes in if your business is blamed for negligence or damages that result from the work you did.
Some occupations that may want to consider professional liability insurance are:
Let's take a look at a some situations where professional liability insurance in Minnesota could likely benefit a business:
A hairstylist has one of their longtime clients come in for a haircut. She is starting a new job and wants a new cut and style to impress her new colleagues at the office.
The stylist makes the changes she wishes, based on a photo the client provides — and she has a positive response— she loves how it looks!
A week later, the client calls the salon in tears. She has been fired and is convinced that with a different haircut, she would've made a better impression. She blames the hairstylist for not recommending against the style she chose.
Now wait a minute...this seems a bit ridiculous, doesn't it?! That's the thing about claims — even if you believe that they're baseless, someone can still sue you. The reason doesn't necessarily need to be legitimate in your eyes for your business to be held accountable.
Without professional liability insurance, the hairstylist may be required to cover the cost of the original haircut, as well as a new style the client is happier with. Without it, though, those costs may come out of a personal bank account.
An accountant helps a long-term client with their annual income tax return. The client is happy with the result at the time the accountant files their paperwork.
Later on, the client calls to let the accountant know they're being audited by the IRS and owe penalty fees they didn't expect. They blame the accountant for the oversight and file a lawsuit, requesting they pay the cost of the IRS penalties.
Without professional liability insurance, the accountant may potentially have to pay out of the business's bank account to cover the IRS penalty fees the client owes, as well as associated legal fees.
Having coverage in this case could mean saving a good deal of money and having the reassurance that the legal costs you accrue could be covered.
In both of these cases, the business owners could face a large financial loss that could impact their businesses in the long term. Having professional liability coverage means protecting yourself against risk that some claims pose.
Minnesota requires business owners with employees to have workers compensation insurance.
This type of coverage helps to protect the business owner if an employee gets injured or sick while on the job.
We'll go into how workers compensation insurance could impact you in a bit, but first, we'll cover the other types of Minnesota business insurance.
Do you use a car or truck to do your work and/or provide your services? If so, it's likely that you'll need to consider commercial auto insurance. That's because even if your car is insured, a personal auto insurance policy typically doesn't cover commercial liabilities.
According to the Minnesota Commerce Department, there are a few factors that go into whether or not you'll need a commercial auto insurance policy:
The price of your commercial auto insurance coverage will vary, depending on where you work, if you've had any claims in the past, and other factors.
Ever think of what could happen if you had to shut down your business due to storm damage, theft, or another unexpected event? Business income insurance can help cover some of the income you may lose during that time period.
What's typically referred to as a "BOP" combines general liability insurance and property insurance to give business owners more comprehensive coverage. If you own a brick-and-mortar or retail store, this coverage may be something to consider.
If you run your business out of your home, it may be worth looking into home-based business insurance. While you may have a traditional homeowner's insurance policy, there's a chance the coverage doesn't include protection for your business. In that case, you could need a separate policy specifically for the business you run from your home.
For many, the tools and equipment that are used to perform a job are an investment. What happens if they were stolen or damaged on the job? This type of insurance, also referred to as inland marine insurance, is a type of Minnesota business insurance that could protect you if one of these situations occurs.
Curious to learn more about your Minnesota business insurance options? There’s a lot to consider, so we wouldn't blame you for wanting to explore. Our free quote tool helps you compare quotes from top carriers in the nation.
If you prefer to talk to someone instead of exploring our free tool, you can call one of our licensed insurance agents at 855-550-0281.Get your quote
As we mentioned earlier, if you have employees, you are required to have Minnesota workers compensation insurance. This type of coverage comes in handy if someone working for you gets sick or injured on the job.
Without workers compensation insurance, you may need to pay out-of-pocket for the medical bills of workers who get sick or injured while working for you.
Those costs can add up quickly, averaging from $2,000-$40,000 per employee, and unfortunately are the type of costs that could put a small business into debt.
With workers compensation insurance, however, a portion of those medical bills could be covered, saving you a great deal of stress and time remedying the problem of paying a large bill.
You may be thinking, "I don't have any full-time employees, so I'm all set." That's understandable, but workers compensation may still apply for your business. An employee doesn't have to be full time for Minnesota to require your business to have workers compensation coverage. People working for you are considered employees even if:
As business owners, it helps to know what tools you'll use will cost. You'd want to know how much certain software packages and equipment would cost, so it's understandable you'd want to know the price of business insurance, too.
Unfortunately, we can't give you an exact number when you ask, "How much does Minnesota business insurance cost?" The cost of your coverage will depend on a number of factors including:
The Minnesota business insurance that you get for your company can include a variety of coverages, and each policy will be different, depending on the business.
If you're simply looking to understand the cost of a general liability policy, though, then we can tell you what starting point you may be able to expect - depending on your specific business and trade. At Simply Business, you could see general liability insurance quotes start as low as $25.95/month.*
A great way to see how much your Minnesota business insurance may cost is to use our free quote comparison tool. You can use this tool to compare quote options with different carriers and see how much your coverage could cost you.Get your quote
Phew. We wouldn't blame you if you were a bit intimidated by the process of getting Minnesota business insurance. But don't be!
Luckily, it has become easier over the last few years to search for and find a policy that's right for you and your business. As a business owner, you're more empowered than ever when it comes to protecting your hard work.
During the process, here are some things you can do to help you find the right business insurance and Minnesota workers compensation insurance policies:
Try talking to other business owners in your area. If you're able to talk to someone in your field and region, it may help you know more about your potential options.
Shop around, using tools like Simply Business's free quote comparison tool. One of the smartest ways to find the right policy for you is by knowing your options.
Decide if a monthly or annual premium would make more sense for your business.
Ask for help! There's no shame in talking to an expert, and we've got you covered, with licensed insurance agents ready to answer your questions. Call 855-550-0281 to learn more about the coverage options available to you.
Do your research and understand what you're legally obligated to have to protect your business.
Once you have your Minnesota business insurance policy, download your Certificate of Insurance (COI), as it's one of the ways you can show your customers and vendors that you're legally covered.
The helpful advice doesn't stop there! Take a look at our guide on how to get business insurance to continue learning about getting the right coverage for you.
At the beginning of this article, we had a lot of ground to cover — and you stuck with it! Here's a recap of all the content we covered:
By now, you should have a good understanding of the types of insurance coverages available for your small business in Minnesota. But there's no harm in doing more research and talking to a licensed insurance agent. In fact, we recommend you continue to learn about your options.
Call 855-550-0281 to ask a licensed insurance agent any questions you have about coverage options. Come back to Simply U, our blog for business owners, for more tips on both growing and protecting your business.
*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.