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Business Insurance in Virginia: What Do You Need?

Workers' Comp, Auto, General Liability Insurance & More

Workers' Comp, Auto, General Liability Insurance & More

Did you know that Virginia is home to over 766,000 small businesses that employ almost 1.6 million people? If you are one of the 766,000 small business owners, you may be wondering if you're doing everything you can to protect your business. One of the best things you can do is protect your hard work with Virginia small business insurance.

So what does that look like? Is a certain type of insurance required? We want to answer as many questions as we can, so in this article, we'll talk about required business insurance in Virginia. We'll also give you a general overview of additional business insurance policies you should consider to protect your business.

What Small Business Insurance Coverage is Required in Virginia?

The state of Virginia states that businesses with two or more employees are required to carry workers' compensation insurance. Sole proprietors who don't hire employees are exempt from the requirement.

Workers' Compensation Insurance

The Virginia Workers' Compensation Commission only requires that all businesses with more than two employees carry workers' compensation insurance. How does workers' compensation work? This insurance applies to work-related accidents in a client's home or on a job site. It also covers illnesses that are caused by workplace exposures.

Workers' comp insurance will cover the injured employee's medical care (including ongoing physical therapy) and lost wages until they're able to return to work. We recommend checking with your local department of insurance to see if your particular business falls under the legal requirements.

You can get workers' compensation coverage through a private insurance carrier or apply to do self-insurance.

Types of Small Business Insurance in Virginia

We recommend small businesses in Virginia look into these additional—but important—types of business insurance coverages.

General Liability Coverage

General liability insurance (also referred to as business liability coverage) isn't required in Virginia but we recommend it for all business owners. Commercial general liability insurance is wonderful coverage because of how comprehensive it is compared to its cost. General liability insurance usually covers:

  • Third-party bodily injury: This portion of your general liability policy will pay for a customer's medical expenses if they're injured at your company.

  • Third-party property damage: If someone's personal property gets damaged or destroyed on your property (because of negligence or a mistake on your part) your insurance company will cover the cost to repair the damage or replace the item.

  • Personal and advertising injury: This part of your business liability insurance will protect your company if you're accused of things like libel, slander, or copyright infringement. Your insurance company will provide you with a legal defense and cover legal costs if you're sued.

Commercial Property Insurance

Commercial property insurance (or business property insurance) is recommended and often required by lenders or leaseholders. Why do you need it? Property insurance coverage protects your building from perils like vandalism, theft, fire, and storms. It also protects the contents of your building (furniture, inventory, equipment, as well as business personal property).

Unfortunately, most insurance companies exclude any damage caused by flooding. If your company is located in a flood zone you may want to consider a separate insurance policy. If you don't, and you experience flooding, any costs to repair damage or replace inventory falls squarely on your shoulders.

Home-Based Business Insurance

Did you know that if you run a home-based business, your homeowner's insurance or renter's insurance may not cover much—if any—of your business equipment and inventory if they're damaged? Even if your policy does provide coverage for business-related expenses, most insurance companies will cap the coverage at a certain dollar amount (that's quite low, sometimes only $2,000).

We recommend you check with your homeowner's insurance agent to see what your coverage is. If it isn't enough to protect your inventory and equipment, speak with them about getting home-based business insurance.

Virginia Business Owners’ Policy

A business owners' policy (BOP) is a bundle of different coverages that insurance carriers will typically offer to small businesses. Another perk of a business owners' policy is that it is often cheaper than purchasing each insurance separately. A standard BOP combines property insurance, general liability insurance, and business interruption insurance.

Some specialized insurance companies may include other options in a business owner's policy that covers the risks that are unique to your industry. That's why we believe it's best to work with an insurance agent that works with an insurance company in your industry to get customized coverage for your small business.

Business Interruption Insurance

Business interruption is usually included in a BOP, but why? How does business interruption insurance work? If your physical property is damaged by a fire (or other covered peril) and you can't operate like normal, this policy helps protect you from financial losses. Depending on the guidelines of the particular policy, it can cover payroll for your employees, help pay your lease, and can also reimburse your lost income.

Commercial Auto Insurance

Commercial auto insurance isn't required by the state of Virginia. However, if you use personal autos for business purposes or you lease/own vehicles solely for business use, you need commercial auto coverage. Why? An accident that happened while you were working might be excluded from coverage in a personal auto policy.

What does it cover? Commercial auto insurance can include coverage for third-party bodily injury, third-party property damage, personal injury protection, comprehensive and collision coverage, and uninsured and underinsured motorist coverage.

If you opt to get commercial insurance, you must carry a minimum amount of $50,000 of bodily liability coverage to pay for claims if someone is injured in an accident. The policy must also include $20,000 in coverage for physical damage coverage.

Professional Liability Insurance

Professional liability insurance—also called errors and omissions insurance—protects your business if you're accused of:

  • Negligence

  • Missing deadlines

  • Professional errors

  • Incomplete work

  • Libel or slander (similar to a general liability policy)

Professional liability coverage will pay defense costs and legal fees (like court costs) that may arise. A professional liability policy is usually recommended for architects, healthcare professionals, lawyers, or anyone that offers professional services.

Cyber Liability Insurance

Cyber liability insurance—also referred to as data breach insurance—protects your business from monetary loss and reputational harm if you're the subject of a cyberattack. If any customer data is compromised, your insurer will cover the cost to notify impacted customers. Most policies will also pay for credit monitoring for those impacted. Some will help cover the cost to repair your reputation if necessary.

The small business administration may require your Virginia small business to get other insurance products. We always recommend speaking with an insurance expert in your industry to help with coverage determinations.

How Much Does Virginia Business Insurance Cost?

Small business insurance cost in Virginia can start as low as $29 a month. However, you'll likely pay slightly higher insurance rates. Why? Because several factors impact premium costs:

  • The industry your business is in (and if it's considered high-risk)

  • Where your business is located (high crime" areas may raise premium costs)

  • The length of time you've been in business

  • Your annual gross sales are factored

  • Whether or not you have an extensive claims history

  • The deductibles and policy limits you choose can raise/lower premiums

  • How much coverage your business needs ($500,000, $1 million, etc.)

  • The number of employees you hire will dictate workers' comp costs

  • The insurance company that you get coverage through

These are just a few of the things an insurance agent will consider when assessing your small business's insurance needs.

Get a Free Quote for Insurance in the Dominion State

As a business owner, we understand how difficult it can be to find the best commercial insurance in Virginia. Whether you are a contractor in Alexandria, a heating and air conditioning specialist in Richmond, or an electrician in Virginia Beach, we can help you find instant coverage for your specific needs.

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.

Virginia Small Businesses Commonly Insured

Some professions that are commonly insured in Virginia include: