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Small businesses make up over 97.7% of Wisconsin's businesses, meaning that if you're a small business owner making a living in the Badger State, you're not alone.
Not all small businesses face the same risks, but they all care about their businesses. One way to set your business up is to learn how business insurance may protect you.
And if you’re like most other small business owners, finding the information you need to know about business insurance can be a daunting project.
That’s why we've created a guide for you. We'll review what business insurance policies you may want to consider for your business, how they could benefit you, and how to get Wisconsin business insurance.
General liability insurance is a policy that protects against a variety of risks causing harm to third-parties, such as:
If you're a contractor, you are required to have general liability insurance with coverage of at least $250,000 in order to get your Wisconsin contractor's license.
But what if you're not a contractor?
While general liability insurance is not typically required in Wisconsin, it's important coverage to consider because it can protect against some of the most common claims that a small business owner may face.
For example, a customer injury claim could cost up to $30,000, while a reputational harm claim could be $50,000. Those are hefty amounts! And in many cases, without insurance coverage, they could put a business into debt that it can't recover from.
Let's look at some other examples of when Wisconsin liability insurance could come in handy:
The newlyweds sue the DJ. for the cost of the child's medical bills as well as for a portion of the DJ.’s fee, since their wedding was interrupted by the medical emergency.
Without Wisconsin general liability insurance, the DJ may have to eat the cost of the gig and medical bills out-of-pocket. Having coverage could help to cover the medical bills, the cost of the clients’ demands, and legal fees (up to the policy’s limits).
The customer sues for the cost of their medical bills, an expense the clothing store owner wasn’t anticipating in their budget. With general liability coverage, a policy could help cover the cost of the customer's medical bills, saving the business owner from out-of-pocket costs.
The electrician could have to pay out of their business's bank account to cover the repairs and replacement of the antique shade. With general liability insurance, they could get coverage up to their policy's limit for the damage and glass shade replacement.
Even if you think you can get by without Wisconsin general liability coverage, it's worth considering, to help save you from risks that could put your business in financial jeopardy.
Professional liability insurance is coverage that financially protects business owners against claims of negligence. Professional liability insurance in Wisconsin is recommended for business owners such as:
Let's look at a few examples of professional liability insurance in action:
Without professional liability insurance, the interior designer would have to pay out-of-pocket for the requested fees. With coverage, though, the costs of the project demanded by the client could be covered, as well as any associated costs (up to the policy limit).
Professional liability coverage could help to cover some of the demanded cost from the client, as well as any associated legal fees. Without insurance coverage, the web designer may risk losing the money.
They now have to find alternate accommodations and are unable to find something at the same price point. They sue the travel agent for the cost of their hotel stay.
Without coverage, the travel agent may have to pay a hefty fee from their business's bank account, as well as any associated legal fees.
With a professional liability policy, those fees could be covered, saving the agent from expenses that could be detrimental to their business.
While not typically required by the state, professional liability in Wisconsin does offer big benefits to its policyholders. Business owners can do all they can to avoid risk, but they can't always predict when things may go wrong or a customer will make a claim.
Having professional liability insurance can help ensure that mistakes don't have to mean financial loss for your business.
If you have any employees working for you in your small business, you'll likely need to have Wisconsin workers compensation insurance.
Wisconsin workers compensation insurance can help protect you and your employees in the event they get injured or sick while on the job.
We'll dive deeper into what goes into workers compensation insurance later on, so stay tuned.
If you drive a vehicle for work, you'll need commercial auto insurance. You may have an individual insurance policy for your vehicle, but if you drive for business reasons, it's likely your personal policy won't protect your business from risks or damages.
This type of coverage is required in Wisconsin because the state has a financial responsibility law that states that anyone driving a business vehicle must be covered for damages they cause to others. For more information, you can look here (on pages 10 & 11).
This law requires the following minimum coverage:
The law also requires uninsured motorist coverage of $25,000/$50,000 for bodily injury only.
However, if while working you need any type of permit from the Wisconsin Department of Transportation (WisDOT), you'll be required to get coverage with a higher limit.
The average claim for vehicle accidents is $45,000, the second most expensive claim a business may have. So, your monthly or annual premium may be a drop in the bucket in comparison.
Business-owner's policy (BOP): This is comprehensive coverage that combines general liability coverage with property coverage. If you have a physical storefront, like a salon or retail store, then BOP is coverage you may want to consider getting.
Business interruption insurance: This helps to cover the loss of income you may face after a disaster, such as a fire or a hurricane, due to disaster-related closing or to rebuilding after the disaster. If you have a physical office with fixed expenses that would pile up if you were forced to close, you may want to consider this coverage.
Home-based business insurance: This type of insurance can help protect your business's property and equipment if you work out of your home. Even if you have homeowners insurance, it typically will not cover home-based businesses, so you'll want to consider this type of policy.
Commercial auto insurance: If you work from home and use a vehicle for your business, you may need to consider auto insurance for a home-based business, as your personal auto policy may not provide coverage for you.
As we mentioned earlier, if you have employees helping to run your business in any capacity — part-time or full-time — you'll likely need to have Wisconsin workers compensation coverage, as required by the Wisconsin Workers Compensation Act.
This type of policy helps to protect your business and employees in case one of them gets sick or injured while on the job. You'll need this type of coverage if you have:
Even if you’re an out-of-state employer, you may need to have worker’s compensation insurance if you have employees working in Wisconsin.
You may not be ready to hire employees for your business yet — that's OK! It's still a good idea to know the legal requirements for when that day comes. Consider this: Not having workers compensation insurance could mean large claims made against you by a sick or injured employee.
While we all like to think that we take as many precautions as possible, we can't see the future.
Knowing how Wisconsin workers compensation insurance will protect you and your business can help protect you against financial devastation down the road.
If you have more questions about workers compensation insurance in Wisconsin, contact the Worker’s Compensation Division, Bureau of Insurance Programs, at 608-266-1340.
When it comes to getting Wisconsin business insurance, the experience won't be like ordering off an a la carte menu. Your coverage will be based on factors unique to your business, like its size, how long you've been in business, and more.
While we can't tell you an exact answer to the question, "How much does Wisconsin business insurance cost?" we can tell you the average cost of a general liability policy.
At Simply Business, you could see general liability insurance policies starting at $22.50/month.*
Every business owner has a different budget depending on their needs, and fortunately there are great tools to help you learn your options. Compare quotes for free with our quote comparison tool.
We just covered a lot of information about Wisconsin business insurance — but there's always more you could learn when deciding to protect your business.
Here are some tips to make sure you choose the right business insurance policy, and a Wisconsin workers compensation policy:
Talk to other business owners, either in your industry or in your community. Learn about what challenges they've faced in business and if they have any advice.
Identify your biggest risks. This may seem obvious since we're talking about insurance, but it's helpful to think through every possible risk your business faces. Understanding what risks your business faces will help inform which policies are best for you.
Understand the legal requirements for your business insurance. This article is a great starting point, but it should be just one part of a holistic journey of getting a comprehensive overview.
Do the math. Look at your business's budget and cash flow and decide if you'd prefer to pay a monthly or annual premium.
Shop around and compare quotes to see which coverage may be the best for you.
Prove you have insurance once you buy a policy. Display your Certificate of Insurance (COI) on either your company website or in your physical store location.
Wisconsin is called The Badger State as a nod to miners who dug underground, but we hope by now you feel in-the-know and out of the dark about Wisconsin business insurance.
By reading this article, you've taken an important step toward protecting your business. When you're working to grow your business or have questions about protecting your hard work, head to Simply U, our blog for business owners.
*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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*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.