There are almost 700,000 small businesses in the Bay State, employing 45% of the state's workforce. If you're a small business owner in Massachusetts, you need to make sure you're protecting your business—and your employees—with the right insurance. But what small business insurance is required in Massachusetts? What do you need to protect your business? We want to answer your questions in this article! So we'll share what the state of Massachusetts requires while covering business insurance policies you should consider to add additional layers of protection to your business.
What Insurance is Required in Massachusetts?
Massachusetts state law requires that all businesses with employees carry workers' compensation insurance no matter how many hours they work. The only exception is domestic employees, who must be covered if they work over 16 hours per pay period. Some businesses must also provide their employees with health insurance and disability insurance.
Workers' Compensation Insurance
Massachusetts doesn't have strict business insurance requirements for small businesses. Massachusetts state law only requires that all businesses with one or more employees carry workers' compensation insurance. Workers' comp insurance is an insurance that protects your employees' if they get injured or become sick at work. Your insurance company will pay for this person's medical bills and lost wages until they're able to return to work. Most policies provide death benefits as well.
Types of Business Insurance in Massachusetts
There are a few other types of business insurance coverages that we recommend for small businesses in Massachusetts.
Massachusetts Commercial General Liability Insurance
General liability insurance (often referred to as business liability insurance or casualty insurance) isn't required by the state of Massachusetts. But we do highly recommend it for all business owners. The coverage is both comprehensive and affordable! Commercial liability coverage can protect your business in the case of:
- Third-party bodily injury: If someone gets hurt on your premises, this portion of your policy covers their medical expenses. It will also cover legal fees and settlements if they sue you for the injury.
- Third-party property damage: If someone's personal property is damaged while on your property, your insurance carrier will pay to replace the damaged item or repair it.
- Personal and advertising injury: This part of your policy protects you if you're accused of "personal injury" such as libel, slander, or copyright infringement. If you're sued, your insurance company will provide you with a lawyer and cover legal costs and settlements.
Example #1: General liability insurance will cover medical costs if a customer trips over a loose tile and smashes into a wall.
Example #2: Let's say one of your employees spills motor oil. When they go to get a mop to clean it up, a customer steps in it, completely ruining their shoes. If you submit a claim to your insurance, they can cover the cost to replace the ruined shoes.
Example #3: Someone claims that you slandered them in a book you recently published. Because you have a general liability insurance policy, your insurance carrier will provide you a lawyer as well as pay court costs and settlements.
Many small business owners—if not most—opt to purchase this coverage to protect their business from common incidents that occur.
Massachusetts Commercial Property Insurance
Commercial property insurance (or business property insurance) is recommended—and often required by a commercial lease—for businesses that own, rent, or lease a physical business location. Commercial property coverage will pay for any physical damage that occurs to your building or office space. Covered perils usually include vandalism, theft, fire, and storms. This policy also covers the contents in your building (this can include furniture, inventory, equipment, and business personal property).
Most (if not all) insurance companies exclude damage to your property caused by flooding. If your business is in a flood zone or you know you're on low ground, you'll want to consider flood insurance.
Business Interruption Insurance
If your business is damaged by a fire (or other covered peril) and you can't operate, business interruption insurance covers operational expenses. Operational expenses can include things like payroll for employees, your lease, and taxes. Some insurance carriers will even cover lost income for a length of time. We recommend working with an insurance agent to get customized coverage for your small business.
Massachusetts Business Owners’ Policy
A business owners' policy (BOP) is a bundle of common insurance coverages that is offered to small businesses. A basic BOP will generally include commercial property insurance, general liability insurance, and business interruption insurance. The best part? A BOP is usually more affordable than purchasing each policy separately.
Massachusetts Commercial Auto Insurance
Commercial auto insurance is required if you use company vehicles in daily business operations. Commercial auto coverage will include some type of bodily injury liability coverage, property liability coverage, and cover damage that occurs during accidents. Most personal auto policies will exclude coverage for business use, so be sure to check with your auto insurance. If you get into an accident, you want to make sure you're not left footing the bill for any injuries or damage.
Professional Liability Insurance
Professional liability insurance—also referred to as errors and omissions insurance—will protect your business if you're accused of professional negligence, missed deadlines, or any errors you may have made. Professional liability insurance will pay to prove you a lawyer as well as cover defense costs and other legal expenses.
Employment Practices Liability Insurance
Employment practices liability insurance (EPLI) protects you if you're accused of discrimination, wrongful termination, sexual harassment, and other inappropriate workplace incidents.
Additional Business Insurance Links
Massachusetts small business owners might also want to consider these additional coverage options.
Professions Commonly Insured
Some professions that are commonly insured in Massachusetts include:
How Much Does Massachusetts Business Insurance Cost?
The average cost of general liability insurance coverage for a small business in Massachusetts can start as low as $29 per month. However, other factors can impact and likely raise premium costs:
- The industry you're in and whether or not it's high-risk
- The gross sales and annual revenue of your business
- The location of your small business (state, city, etc.)
- The length of time you've been in business
- An extensive claims history will raise costs
- The deductibles and policy limits you choose
- The number of employees you have
Even the insurance company you choose can impact the price of your policy. These are just a few of the factors an insurance agent will look at when assessing your needs for business insurance.
Get a Free Quote for Massachusetts Small Business Insurance
We understand how difficult it can be to find the best commercial insurance for your Massachusetts business. Whether you are a landscaper in Boston, a remodeling contractor in Cambridge, or a painter in Newton, we can help you find the perfect coverage for you.
We understand that finding the best commercial insurance for your business can be a hassle. Our goal at Tivly is to help you get the right insurance coverage at an affordable price. The process is fast and easy! Complete the form at the top of the page and someone will reach out to you. Or, give us a call at 877-907-5267.