Beauty, charm, excellent schools, and modern expressways are just a few of the perks of operating a business in Connecticut. High quality of life and close proximity to New York City are others. Touting at least three nicknames, “The Constitution State”, “The Nutmeg State”, and “The Land of Steady Habits”, this southernmost-state gateway to New England has a long-standing history of tradition. And one of these traditions is Connecticut’s expertise in the insurance industry, which remains one of the state’s major industries. Whether a small business startup or seasoned business, here’s what you need to know about small business liability insurance in Connecticut:
Standard Business Insurance Coverages in Connecticut
A business owner’s insurance policy, commonly referred to as BOP, is a comprehensive small business insurance package consisting of multiple liability coverages in one bundle. A BOP combines two main coverages in a single policy: property insurance and general liability. Covering a number of different areas of liability, including buildings, equipment, and legal liabilities, business owners insurance transfers risk away from the business owner to the insurance company. Typical claims that business owners insurance coverage protects you from include: legal liability claims, personal injury, professional liability claims, income loss, equipment breakdown, fire, employee dishonesty, money and securities, valuable papers, and property claims. Depending on the unique risks a Connecticut small business owner might face, additional components may be added to the original BOP coverage.
General liability insurance is designed to protect small business owners from financial loss arising from negligent acts, omissions, or both, caused by you or your employees that results in physical injury or property damage. Examples of the types of exposures commonly covered under general liability insurance include liabilities from products sold, accidents on the insured premises, and contractual liabilities. The damage or injury may be through negligence or unintentional. General liability insurance in Connecticut may be a standalone policy or can be combined with another policy.
A package policy is an insurance policy for the small business owner that combines two or more types of insurance into one policy, or package. A typical package policy in Connecticut combines general liability insurance (described above) and commercial property (described below); although a package policy can be designed to include practically any type of coverage, depending on the needs of the entity. A package policy is useful for the small business owner because it allows for great flexibility to tailor make a policy specifically for the distinguishing needs and risk exposures of the business.
Commercial Property Insurance is used to provide coverage for any type of Connecticut commercial property, and includes, building, equipment, inventory, furniture, supplies, valuable papers, and personal property. Commercial property insurance provides protection against a number of perils, like fire, theft, windstorm, hail, vandalism, explosion, lightening strikes, and natural disasters. This type of insurance is recommended for a variety of small businesses, including retailers, manufacturers, not-for-profit entities, and service-oriented businesses.
If you have employees working for you in your business, workers’ compensation insurance provides coverage against employee occupational illnesses and work-related injuries. Workers’ compensation insurance in Connecticut is a no-fault, state-mandated insurance system designed to pay benefits to workers who sustained injuries or an illness while on the job. Because the state of Connecticut requires businesses with employees to carry workers’ compensation, failure to carry it can expose small business owners to severe fines and civil penalties, or in some cases, result in being liable for the cost of injuries suffered by their employees. Through workers’ compensation insurance in Connecticut, workers receive medical care and lost wages coverage in exchange for the assurance that the employee will not sue his employer.
Whether your business owns one vehicle or a fleet of vehicles, it’s necessary to be covered with commercial auto insurance in Connecticut. Commercial auto insurance provides financial protection to business owners and their drivers by providing coverage for a company’s use of trucks, vans, cars, or other vehicles in the course of its operations. Commercial auto insurance not only covers damages and medical costs resulting from vehicle accidents, but vandalism and hail damage as well. Coverage may include vehicles leased, rented, hired, or owned by your company, in addition to employee-owned vehicles used for your business operations. For this latter reason, it’s recommended that companies purchase a commercial auto insurance policy if employees use their own vehicle to carry out duties for the business; this is referred to as non-owned commercial auto insurance.
Commercial umbrella insurance picks up where your general liability, commercial auto insurance, or other liability coverage stops. In other words, your existing liability policies may have coverage limits, and may not cover all expenses should a catastrophic or unforeseen event occur. Commercial umbrella insurance in Connecticut is an important source of protection that fills in the gaps and covers certain exclusions in your primary business liability coverage. Umbrella insurance is an excellent way to provide extra protection against property damage, bodily injury, or certain other liabilities.
Some Additional Business Insurance Coverages in Connecticut to Consider
Errors and Omissions insurance policies protect Connecticut businesses and individuals from lawsuits and claims made by clients or customers for inadequate work, negligent acts, errors, and oversights made in the course of doing business that resulted in a loss of income or productivity on the part of the customer or client. Errors and Omissions insurance covers legal defense and court costs, as well as settlements as specified on the insurance contract. Just like doctors need malpractice insurance, small business owners who provide services or consulting advice, either directly or through subcontractors, need errors and omissions insurance in Connecticut.
Professional liability insurance helps protect professionals, such as accountants, financial analysts, and general contractors, from bearing the entire legal cost of defending against a claim of negligence, error, failure to perform, or omission made by a client as well as damages awarded in said claim. The coverage focuses on financial loss on the part of the client from these types of alleged claims with respect to a product or service sold by the professional. Professional liability insurance may provide claim coverage, even if the legal actions turn out to be groundless. Professional liability insurance in Connecticut is required by law in some kinds of professional practices, like legal and medical, but is also required by contract in other professions.
Employment Practices Liability Insurance (EPLI) provides small business employers with protection against allegations of wrongful termination, discrimination, breach of contract, wage law violations, sexual harassment, false imprisonment, libel, slander, emotional distress, mental anguish, negligent hiring and promotion decisions, and defamation claims. Employment practices liability insurance centers around the laws, acts, and protection brought under Title VII of the Civil Rights Act of 1964, Age Discrimination in Employment Act, and Family and Medical Leave Act — all of which the Equal Opportunity Employment Commission (EEOC) enforces.
Fidelity Bonds in Connecticut
Fidelity bonds are a type of insurance purchased by a small business employer to protect against losses, such as fraud, theft or embezzlement by one employee or a group of employees. Because restitution from employee dishonesty practices is typically unlikely due to the cash already being spent, fidelity bonds represent an important safeguard for a small business owner who would otherwise have to absorb such financial losses. While it’s important to have safeguards such as employee screening, internal controls, and careful supervision, sometimes it isn’t enough. Losses suffered from employee thefts of money, property, or securities are all covered under fidelity bonds insurance in Connecticut. The three most common types of fidelity bonds are business service bonds, standard employee dishonesty bonds, and ERISA bonds.
Surety Bonds in Connecticut
A surety bond is a binding agreement or contract among three parties: the principal, obligee, and surety (insurance company). It represents the promise pay a specified amount should a party fail to meet an obligation, like fulfilling the terms of the contract. A surety bond protects the recipient against loss should the contract not be fulfilled, while the surety company takes on the liability for nonperformance. A surety bond is generally required to obtain monetary compensation. Business owners may need a surety bond to guarantee payment of utility bills or state sales taxes, while a contractor may need to post a bond to secure work or qualify for licenses. While most commonly used in the construction industry, surety bonds are also used by mortgage brokers, automobile dealers, medical suppliers, notary publics, health club owners, and others. Because of the large range of small businesses that use and need bonds, there are many types and features of surety bonds in Connecticut that provide a wide range of guarantees.
Whether you are operating a small-town bakery or shoreline restaurant, Connecticut small businesses need to protect their share of the pie in case of fire, theft, or other types of liabilities and risks. Many of these risks will be covered by standard business insurance, but you may have to consider some additional Connecticut business insurance coverages. Business insurance is an important element of success, and savvy Connecticut business owners know that a sound business insurance plan tailored to the unique needs of their business is a necessity, rather than a luxury.