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Raise your hand if you’ve ever left items on your to-do list because you dread dealing with them. I’m right there with you. Now and then, though, you decide to tackle something you’ve put off, only to realize it wasn’t so bad after all.
Today is the day you sort out business insurance and then move on with your life. I’m going to walk you through the different types of Ohio business insurance you’ll face, whether or not you need them, and how to get them. Getting business insurance is one of our 9 steps for starting a business in the U.S., so you don’t want to ignore that to-do item for too long.
I promise it should be much easier than sorting through state websites on your own.
Most people are familiar with health or car insurance, but business insurance can feel like uncharted territory.
Unless you’ve purchased it previously, it can be hard to tell which plans cover what scenarios. So our first stop today is covering the types of business insurance in Ohio that you might encounter.
For each policy, we’ll go over what it may cover and whether or not it’s required by law.
The first stop on our tour of Ohio business insurance is general liability insurance. This type of policy is the pack leader in terms of how many scenarios it can cover and the number of businesses it could benefit.
General liability insurance in Ohio typically covers:
What do those words really mean, though? To make sense of it for the 99% of us who don’t spend our days studying insurance terminology, we’ll explore a few scenarios. Here are some examples of accidents that could be covered by a general liability insurance policy:
A house cleaner has just put the polishing touches on a kitchen floor when the homeowner strides in and slips on the wet floor. The client falls and injures their back and has to undergo eight weeks of physical therapy.
A customer slip-and-all injury is a common business insurance claim and comes with an average price tag of $20,000.
A real estate agent has a client in their office to sign some paperwork. As the client is walking through the office, they trip on the edge of the carpet, fall, and break their arm. As a result, they want the real estate agent to pay for their injury expenses and its impact it had on their ability to work.
A hairstylist has made a house call to touch up a new client’s roots and accidentally drops hair dye on the new carpet. In a matter of seconds, a small slip of the hand could turn into the client demanding that the hairstylist pay to replace the carpet.
There’s no one-size-fits-all requirement for general liability insurance in Ohio. So you might not be legally required to carry this type of coverage. Each state has its own rules for what kinds of businesses need to have general liability insurance. Ohio requires it only for some occupations.
You’ll likely come across insurance requirements when you go through getting your business license in Ohio. We also offer some tips at the bottom of this article about how to find insurance requirements and evaluate your options.
Typically, the state sets general liability insurance for occupations that pose a greater risk for injury. For example, contractors need a minimum of $500,000 general liability coverage. The Ohio Construction Industry Licensing Board has a minimum insurance requirement for electricians, plumbers, HVAC specialists, and more.
P.S. If you’re a general contractor, you'll want to review our guide to what you’ll need to get licensed and insured.
If your industry requires insurance, there could be consequences for skipping out on a policy.
For example, contractors who fail to maintain general liability insurance in Ohio could face fines, be required to take additional classes, or lose their license.
Amusement ride operators also have a liability insurance requirement, since there’s a chance someone could get hurt if you or your equipment aren’t on their A-game.
Even if the state doesn’t mandate that you have business insurance, we always recommend it. You can add or modify insurance plans as your business grows and changes. So just because you haven’t carried it in the past, it doesn’t mean you can’t start now.
As your business grows, you also have more at stake. Some of the most costly insurance claims could set you back, on average:
Rather than hoping you or your employees never have an accident, it’s easier to be insured and remove the worry from your mind. Without insurance, you may need to pay for costly accidents out of pocket.
Legal fees are another concern for businesses caught in a civil lawsuit. If a client claims you damaged their property, but you disagree, you may have to defend yourself in court. Lawyers can cost $100 an hour or more, which would add up quickly. A general liability insurance policy could help offset those costs, saving you or your business from bankruptcy.
Even if you have tens of thousands of dollars sitting around to pay for damages or legal costs, that probably isn’t how you imagine spending that cash. Instead, you could use that money to hire more employees, open another location, or buy another business.
All of those business growth milestones bring me to another point. Business insurance isn’t just for the “doom-and-gloom” scenarios. Having and displaying proof of insurance can add to your business’s credibility. Here are a few ways having Ohio business insurance can boost your business, even if you aren’t required to have it:
Secure funding. If you’re thinking of a grant or loan to take your business to the next level, insurance might help get you there. Banks may require you to have insurance on your property to reduce their risk in lending you money.
Rent storage or retail space. Moving to a larger location or branching out of the home office may be in your future. When you start to shop around for commercial spaces, you may find that landlords want to see proof of insurance. Even if they don’t require it, having coverage may make your bid stand out among others.
Build trust with customers. It takes time to build a positive reputation, so any boost in the beginning is helpful. Showing potential customers your proof of insurance shows a level of commitment to doing things the right way.
It also reassures them that if you damage their property, they won’t have to chase you down to pay for the damages. All they have to do is file a claim with your business insurance company for easy accountability.
Attract employees. Would you want to work for a company that does the bare minimum, or one that invests in quality work and cares for their team? I’d choose the latter! You could increase your chances of hiring and retaining great employees by paying attention to details like business insurance.
Set yourself apart from the competition (or scammers). Unfortunately, there are people out there who are eager to scam customers in your industry. While you can hope that people are able to spot scammers for what they are, it’s helpful to distance yourself from shady businesses as much as possible.
If potential customers are looking for a way to tell the difference between legitimate businesses and those after a quick buck, insurance is a good place to look.
If you’re in the business of giving advice, pay close attention. Professional liability insurance might help protect your business if a client claims that your services led to damages in their personal or professional life. Here’s how that could play out across a few types of businesses:
A real estate agent promises to send a client’s offer on a home but gets sidetracked by a phone call with another client. Since the real estate agent sent the offer late, the buyers miss out on their dream home and sue the agent for their negligence.
A lawyer creates a contract for a client with specific requests but forgets a few key points because they’re in a rush. The client doesn’t notice the missing pieces right away, but ends up in hot water later as a result of the error. The lawyer’s faulty contract cost the client thousands of dollars, and now they want the lawyer to pay for their negligence.
A life coach meets with a stressed-out corporate worker and suggests that a major lifestyle change may be needed. The client takes the advice and runs with it — quitting their job, selling their home, and moving to another country. When they realize they’re still unhappy, they want to sue the coach for giving them bad advice when they were vulnerable.
Requirements for professional liability insurance in Ohio vary by occupation, but it’s helpful coverage for many professionals.
Some businesses that we recommend having professional liability insurance include:
Some other businesses with a professional liability insurance requirement in Ohio include:
Since many businesses don’t have a legal requirement for professional liability insurance in Ohio, you may be able to stand out among competition to potential customers.
Carrying business insurance policies sends a signal to clients that you’re serious about your business. It also gives them peace of mind that if something goes wrong on the project, you’ll be able to pay for any damages.
Having coverage isn’t just good news for potential clients — it’s worth telling existing ones, too. Open communication is important for client retention, and telling them about your new insurance policy reassures them you want to keep getting better.
While other types of insurance have caveats depending on the type of work you do, Ohio workers comp insurance has one rule — if you have one or more employees, you need workers comp insurance.
An Ohio workers comp insurance policy helps businesses and employees cover the costs of workplace injuries, which could include both the accident plus lost wages.
For a janitorial company, for example, this could be the result of an employee straining their back while moving a printer during an office cleaning.
Since accidents can happen no matter how careful you are, workers comp insurance is good for employers and employees. The average workers comp claim is $41,000, which means low-cost insurance premiums could offset hefty medical bills.
If you don’t have employees, you still can elect to have a workers comp policy for yourself in Ohio.
The guide to Starting Your Business in Ohio lists 13 types of insurance that your business may want or need. These include the types we’ve already covered, plus others like:
Commercial auto insurance: Everyone operating a vehicle in Ohio needs insurance, and your business vehicles might need special policies, depending on their purpose or contents. Catering companies transporting food in company vans, rideshare drivers, contractors with work trucks, and more should consider this coverage
Business personal property insurance: This type of policy also could be called tools and equipment coverage. Having a policy for your machinery, office equipment, furniture, and more could offset costs of damage or theft
Flood insurance: The state keeps records of the total flood insurance claims by county, and recognizes that many homes and businesses don’t carry flood insurance. Policies to protect against loss or damage due to floods, fires, and other natural disasters are helpful if you have a physical location
We aren’t a business blog — Simply Business is one of the fastest-growing online insurance platforms. The only thing standing between you and free, custom quotes from the nation’s top insurers is ten minutes and a few questions.
You can get started online now by completing a quick questionnaire. If you prefer having a human on the other end of the line, call 844-654-7272 for one-on-one assistance.
Every business in the state with employees needs Ohio workers comp, but not everyone will pay the same rates. The premium, or cost of the policy, depends on the risks associated with your work. Your payroll also affects costs.
This means that construction contractors may have to pay a higher workers comp rate than photographers. Fortunately, you don’t need to calculate this rate yourself. When you apply for Ohio workers comp, the form will ask questions about your business.
Then your rates are calculated based on your industry and role. After submitting the application and a $120 fee, you can set up an online account. From there, you’ll be able to manage payments online.
There are a couple of industries where Ohio workers comp insurance requirements can vary:
Marine workers: If you work with marine vessels, you need Longshore and Harbor Workers compensation insurance.
Domestic workers: If you employ someone for cooking, gardening, housekeeping, or babysitting, you might need workers comp insurance in Ohio. This requirement kicks in if you pay them more than $160 a quarter.
Coal mine operators: If your employees work in coal mine construction, maintenance, or transportation, you need “Black Lung Insurance.” These policies are in addition to standard workers comp in Ohio.
The benefits of insurance sound great, but how does it fit into your business finances today? Ohio business insurance costs vary, which means we can’t give an exact answer here.
Your premiums will likely depend on:
Getting insured may be more accessible than you think, though. At Simply Business, general liability insurance quotes can start as low as $22.50 a month.*
Since it’s free to get custom quotes from top insurers, it’s good to compare offers to find the best match. At the very least, you’ll walk away with a better idea of what to budget for when you’re ready to make a decision.
It’s also helpful to note that you can generally deduct the cost of insurance premiums from business tax filings.
Let’s pause for a moment.
You just took in a lot of information about business insurance. In case your head is swimming with new terms and rules, here’s a refresher:
As long as they don’t have employees, many businesses won’t have legal requirements for insurance in Ohio. Regardless of that, though, we recommend insurance, since costly accidents can happen to the best of us.
Two main factors determine whether you’re required to have insurance policies in Ohio — your industry and the number of employees. For instance, a solo DJ and a fiver-person contracting company have different rules to follow.
If you have employees, you’ll likely need to have Ohio workers comp insurance.
Taking stock of everything in your business helps you gauge which policies would be helpful. Expensive equipment or tech may warrant additional coverage, as would vehicles. If you’re a home-based business, you may want a policy to fill in property protection gaps.
Now that you’ve learned the basics of business insurance, you’re ready to take the next steps. Here are some ways to find the right insurance policies for your business:
Use the free business checklists from the Ohio business portal site to find governing agencies for your occupation. There are checklists for jobs, including accountants, law firms, hypnotists, cosmetologists, real estate agents, and even charity bingo.
Contact the licensing agency for your industry to clear up any questions about insurance requirements for your exact type of work. You can find department contact information for more than 200 occupations on this Ohio business licensing page.
Compare insurance quotes across providers to find the coverage and cost that you’re comfortable with.
Think about how your business will grow in the next year, and whether that could impact insurance requirements.
If you’re shopping for insurance on the Simply Business platform, feel free to reach out to our insurance agents to answer any lingering questions.
Talk to business owners in your community to learn about what insurance they chose.
Reach out to local business lawyers and accountants to discuss your exact business details.
If you perform multiple services, make sure to check requirements across all activities.
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
If you’ve ever felt overwhelmed (or bored) when learning about business insurance, you’re not alone. Sorting through state websites is a task that busy entrepreneurs don’t have the time for.
That’s why business owners like you keep coming back to our Simply U blog to learn about getting business insurance or growing a profitable company. We hope that this guide took away some of the mystery surrounding insurance, and that you feel ready to check this step off your to-do list.
If you’re ready to get started, check out our free quote comparison tool or chat with licensed insurance agents one-on-one at 844-654-7272.
*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.