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Business Insurance: General Issues

What insurance am I required to carry by law?

  • A corporation in Virginia with three or more employees must carry Workers’ Compensation. All officers count in that number. However, you are responsible for the work related injury of even one employee.
  • A corporation in Washington D.C. and Maryland must carry Workers’ Compensation with one employee.

What insurance am I required to carry by contract?

  • A review of your contracts to determine what the insurance requirements are is important. Your insurance may not be corresponding to the contract. Sometimes, a simple change is needed.

What insurance am I required to carry by lease?

  • Leases are contracts too. It is important to review the insurance requirements dictated by your landlord. Often you will find these under “Indemnification”. Are the limits realistic for your business? They are
    often negotiable.

How can a contract or lease affect the cost of my insurance?

  • A lease could require a high limit of liability and thus affect your cost of insurance.

Does the fact that I am a Sole Proprietor, Partnership, or Corporation affect the cost of insurance?

  • No, but a sole proprietor or partner may want to carry a higher limit since there is no corporate shield to protect them. Also, that corporate shield should not be relied upon too heavily. Ask your lawyer what you must do to prevent the ability to “pierce” the corporate shield.

Do I need Auto Liability for my company when employees use their own cars for business?

  • You need Non-Owned Auto Liability. You are vicariously liable for the actions of your employee. If they are using their car for company business, the corporation will be sued because it will be assumed to have deeper pockets than any employee.

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