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Pennsylvania Business Insurance

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Want to make sure you’re properly covered with Pennsylvania business insurance, but aren’t sure where to begin?

You’ve come to the right place. The world of Pennsylvania business insurance can be confusing, which is why we’ve explored that topic in depth.

Before you start asking your business insurance questions, we recommend digging into the content below to see if one of your questions is answered.

What insurance are you required to carry? What type of insurance is a good idea but maybe not 100% required by law? How do you tell the difference?

Let’s clarify the next steps and dive into the world of business insurance in PA.

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Pennsylvania Business Insurance: Your Basic Guide

PA General Liability Insurance

The first type of insurance many people look into is general liability insurance. But what is it, and how do you know if you need it?

General liability insurance can potentially protect you from large third-party claims, such as property damage or bodily injury.

If you’ve ever seen a “Wet Floor” warning sign in a grocery store, then you know why. They want to avoid the liability that might come if they didn’t warn customers and someone falls and gets hurt. Because the grocery store is a physical presence where nonbusiness injury and damage can happen, it could open up the store to lawsuits and claims if something goes wrong.

As a result, the store may be on the hook for medical bills, damages, and associated legal fees. Without general liability insurance, the only place for the company to get the money to cover those costs is out of their own pocket.

You’ll need general liability insurance if you operate a business that’s exposed to other risks too. Those might include:

  • Third-party accidents
  • Reputational harm
  • Property damage (especially caused by you and/or your work)
  • Bodily injury to others

Nationwide, about 54% of all small business owners actually buy general liability insurance. But keep in mind that the risks may be different for different types of businesses.

If your business hosts on-site customers, puts clients at risk of reputational harm, or could result in property damage, it’s a good sign that you need general liability insurance in Pennsylvania — or anywhere else.

You do not always have to sign up for business liability insurance in Pennsylvania, but this may depend on your business type.

As an example, the Commonwealth of Pennsylvania notes that construction companies are required to keep general liability and property damage insurance at a minimum coverage of $250,000 per person.

Pennsylvania Professional Liability Insurance

In simple terms, general liability refers to damages that can occur incidentally while you are operating your business.

For example, a grocery store isn’t in the business of mopping floors; it’s known for selling food products. But it can still face general liability issues if they have a freshly mopped floor without a warning sign and a customer slips and falls.

Professional liability insurance, on the other hand, applies to the nature and quality of your work. It protects you from claims of negligence that result from your acts and omissions (e.g. decisions you make) when performing your work.

Looking for an example of Pennsylvania professional liability insurance in action? Let’s say you're an architect. A building you design partially collapses because your plans were missing a critical support beam.

The client is demanding that you pay to rebuild the property. Without professional liability insurance in place, your company would have no choice but to foot the bill. With coverage, costs to restore the damaged building could be covered (up to your policy limits).

Or maybe you're an accountant who helps clients with their taxes. Later in the year, a client gets audited by the IRS and is responsible to pay large penalties. The client blames you for making a mistake in preparing their tax return.

Without professional liability insurance in Pennsylvania, your client could sue you, and you'd be required to pay the IRS penalties as requested. Professional liability coverage could help cover some of the fees your client is demanding you pay, as well as any legal fees.

The important thing here? Don’t assume you’ll never make a mistake.

Even the most highly skilled professionals make an occasional error. After all, they're human, too. Professional liability insurance takes this into account, helping you to have the peace of mind that as long as you do the best job possible, you may have an insurance provider that has your back.

In Pennsylvania, you are not always required to have this insurance, but it’s subject to different professions, so check if it applies to you.

Pennsylvania Workers Compensation Insurance

What happens if one of your employees suddenly suffers an injury on the job? How are they going to pay for medical bills? What about handling problems like rehabilitation and time away from work and their source of income?

The solution for businesses across the country is workers compensation insurance. In Pennsylvania, it’s a statewide requirement that businesses with employees carry some type of this insurance.

This is black-and-white. The Commonwealth of Pennsylvania website states:

If you employ workers in Pennsylvania, you must have workers' compensation insurance — it's the law.

Other Types of Pennsylvania Business Insurance

Pennsylvania also requires commercial auto insurance for all business-owned automobiles in the Commonwealth. You might call this an “optional” form of insurance, because your business doesn’t require you to have a car. But if your business does have a car, commercial auto insurance is generally a must-have.

What are some other types of Pennsylvania business insurance you might want to consider?

  • Cyber liability insurance. These days, cyberattacks and breaches of personal information represent an increasing liability for businesses with sensitive information. Acquiring this insurance could protect you from legal fees and damages from the fallout after a cyber breach.

  • BOP,” or “business owner’s policy.” This is a combination of property insurance and property insurance, which is important for physical, brick-and-mortar businesses. Many people bundle this insurance together for favorable rates.

Another type of business insurance to consider is home-based business insurance, as noted on the Pennsylvania website. Since a homeowners insurance policy may not provide sufficient coverage for a home office, it’s important to consider.

Do you frequently have clients in your home? If so, you may want additional coverage.

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Pennsylvania Workers Compensation Insurance: What You Need to Know

As in many states, Pennsylvania requires workers compensation insurance if your business has employees.

According to Pennsylvania itself, it is a requirement if your business is an employer with one or more employees.

Both part-time and full-time employees count here. So do employees who are related to you (i.e., family members).

The state outlines four different ways businesses can get workers compensation insurance:

  • Purchasing insurance through a qualified agency or broker. This is a “standard” approach many people use, and one of the easiest ways to get moving.
  • Purchasing insurance directly through private carriers. This takes more time and research because you’re conducting the research on your own.
  • Applying for “self-insurance” status with Pennsylvania. They ask you to call their Self-Insurance division at 717-783-4476, but don’t call just yet! You have to be a large and financially healthy company — with 3 or more years of experience — to qualify for this. Otherwise, you’ll want to take one of the other avenues.
  • Acquire insurance through the SWIF. This is the State Workers’ Insurance Fund in Pennsylvania, and generally a good way for new business owners who are unsure how to proceed. However, in most cases, it’s easier to use the standard approach of working through an agency/broker.

Want to know more? Read about workers compensation insurance at the Pennsylvania website.

How Much Does Pennsylvania Business Insurance Cost?

This is a tricky one to answer. There are different types of business insurance, and different businesses will always have different coverage needs.

If you’re curious, the best thing to do is reach out to someone for a quote. For example, if you need PA general liability insurance, you might reach out to an agent, discuss your requirements and business size, and obtain a quote.

The good news is that it’s easy to get started. For example, at Simply Business, we’ve seen quotes on general business insurance as low as $29.95 per month*.

We recommend that you get started with our business insurance quote tool today, where you can compare quotes from the nation's top carriers for free.

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How Do I Get Pennsylvania Business Insurance?

Once you know what business insurance you need for full coverage, the next question is simple.

What are the next steps?

We recommend not overcomplicating things. Create a checklist of the following items:

  • Write down your PA business insurance needs. Now that you know the requirements (such as workers compensation insurance), you’ll know which coverage is the minimum requirement.
  • Seek quotes. Now’s the time to run some comparisons. We recommended our business insurance quote tool as a great place to get started.
  • Ask for help. If you need it, that is. For example, at Simply Business, we have agents who can step in and help guide you if you get stuck at any stage of the process. Call us at 855-559-0276 to get connected to someone who can help you with Pennsylvania-specific insurance questions.
  • Make a key decision. When you do find insurance that’s appropriate for your business, you’ll face a key decision: annual or monthly billing? Make sure you incorporate your business’s budget into this decision, and weigh the factors, such as how much money you’ll end up paying on an annual basis.
  • Download your COI. This is the Certificate of Insurance, according to your business insurance policy. This is one way you can demonstrate that your business is properly insured. Keep it stored somewhere safe and where you can easily find it.

For more reference, be sure to check out our easy guide on how to get business insurance.

Get Your Pennsylvania Business Insurance Today

You might be starting out in business, or looking to expand. Either way, it's smart to make sure your business is covered. We hope this article has helped guide you through the ins and outs of PA general liability insurance, Pennsylvania workers compensation insurance, and more.

Want to learn more? We recommend checking out our guide on growing a business today.

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*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.

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