What are the requirements for small business insurance in Pennsylvania?
Under Pennsylvania law, every small business with employees is required to provide workers’ compensation coverage. It’s available through licensed insurance carriers, as well as through the State Workers' Insurance Fund. Employers can also apply for approval to self-insure their business. Partners and sole proprietors do not need to purchase workers’ comp.
If you have a company vehicle, then you must obtain commercial automobile insurance. Other policies that depend on circumstance include general liability insurance and property insurance, which may be required before signing a lease agreement for a commercial space.
Although professional liability insurance, or errors and omissions insurance, is not required by state law, it’s strongly recommended for professionals who provide expert advice, such as doctors and lawyers. Lawyers must disclose to clients and the Supreme Court of Pennsylvania if they do not have professional liability insurance of at least $100,000 per incident and $300,000 total per year.
Insureon is licensed in Pennsylvania. We offer free insurance quotes to help you determine which policies may be appropriate for your company. Our easy, 15-minute application provides quotes from several top-rated carriers, so you can compare prices and choose the type of insurance that best fits your business.
Learn about insurance for your industry
Your line of work is a major determinant for your insurance needs. For instance, cyber liability insurance is a wise investment for accountants and other professionals who handle sensitive personal data, such as credit cards or Social Security numbers. Insureon has experts in every field who can provide industry-specific advice. When deciding which policies your company needs, key factors include your assets, business risks, and your employees. To learn more, choose your profession from the list below. Or, complete our easy, 15-minute application to discover the insurance policies recommended for your industry.
Common business insurance policies in Pennsylvania
In Pennsylvania, small businesses most often purchase the following policies:
General liability insurance
General liability insurance protects a business from lawsuits, customer property damage, and customer injuries. Commercial lease agreements and client contracts may also include a stipulation for this type of insurance. Situations where general liability provides protection include:
- A customer trips over a hole left in the ground and sues the landscaping company for the resulting injuries.
- A locksmith breaks a client’s door while trying to repair the lock.
- A tree removal company damages a client’s fence with heavy equipment.
Businesses with valuable physical assets – equipment, inventory, or even a building – can gain protection against loss or damage by purchasing commercial property insurance. This policy helps cover expenses related to accidents and crime, such as:
- A vandal throws a rock through the front window of an office building.
- A thief steals jewelry from a boutique.
- A freezer malfunctions, destroying stored goods at an ice cream shop.
In Pennsylvania, all employers must provide workers’ compensation for their employees, even if they employ part-time staff or a family member. Business partners and sole proprietors are exempt from this coverage. If you or an employee gets injured on the job, workers’ comp helps cover the costs of medical fees and lost wages. Situations where workers’ comp would provide coverage include:
- A warehouse worker is injured when a heavy box falls from a forklift.
- A gardener suffers a severe allergic reaction from exposure to a pesticide.
- A hairdresser develops carpal tunnel syndrome from repetitive hand and wrist motions.
Professional liability insurance
Professional liability insurance, also called errors and omissions insurance, helps protect professionals who provide expert advice to their clients. If a client is dissatisfied with your advice or suffers financial loss as a consequence of your advice, this policy can help cover legal costs and other fees. Examples where professional liability would help include:
- You break the terms of a client's contract.
- Your error results in a client's revenue loss.
- You miss a deadline, negatively impacting a client’s business.
Cyber liability insurance
A security breach can result in tremendous financial loss to you and your clients if personal information is exposed. Without cyber liability insurance, the cost of notification alone could devastate a small business. In Pennsylvania, the Breach of Personal Information Notification Act requires businesses to notify customers whose data may have been compromised. In certain circumstances, consumer reporting agencies must be notified as well. Cyber liability insurance helps cover:
- Data breach notification costs.
- Forensic investigation into the cause of the breach.
- Credit monitoring for parties affected by the breach.
- Legal expenses if you’re sued for not preventing the breach.
Business owner’s policy (BOP)
Not all businesses are eligible for a business owner’s policy (BOP). A business owner’s policy combines a general liability policy with property insurance at a lower rate than if the policies were purchased separately. You may be able to purchase a BOP if:
- You work in a low-risk industry.
- You have fewer than 100 employees.
Commercial auto insurance
Businesses with a company vehicle such as a delivery van must purchase commercial auto insurance. This policy helps cover:
- Repairs to the other driver’s car in an accident.
- The other driver’s medical expenses due to injury.
- Legal expenses that result from an accident.
- Repairs to a vehicle damaged by theft, weather events, or vandalism.
Pennsylvania business insurance licensure information
In Pennsylvania, insurance agents, agencies, and brokers are licensed by the Pennsylvania Department of Insurance. Insureon is licensed in Pennsylvania as BIN Insurance Holdings LLC (NPN 15752926) for property and casualty insurance (license #576387). To verify our licensure in Pennsylvania, enter our license number into the “Search by License Number” field on the Pennsylvania Department of Insurance’s Licensee Search page.