If you own a small business in the Maryland , this information will help you understand Maryland Commercial Liability insurance and protect your business and your personal assets from legal claims and settlements that can spell financial ruin. Whether you work in Baltimore, Columbia, Germantown, Silver Spring, Bethesda or anywhere else in the Old Line State having sufficient general liability insurance is an important part of any small business plan in Maryland.
A small business is defined as any company with fewer than 500 employees. Small business is vital to Maryland’s economic well-being, accounting for more than 97% of all state employers. Of Maryland’s 526,663 small businesses in 2008 (the latest data available), 109,693 were small employers, accounting for more than 52% of the state’s private-sector jobs. Another 416,970 were one-person operations with no employees.
Source: SBA Maryland Small Business Profile 2011
About Commercial Liability Insurance for MD Businesses
Commercial liability insurance (also called business liability insurance and commercial general liability insurance) protects your Maryland business from financial loss resulting from claims of injury or damage cause to others by you or your employees. A policy typically covers:
Bodily Injury – physical damage to a person other than an employee at your place of business and injuries caused by you or an employee at a client’s home or work place.
Property Damage – damage caused by you or an employee to someone else’s property.
Personal Injury – libel, slander, copyright infringement, invasion of property or privacy, wrongful eviction, false arrest and similar acts that cause damage to a person’s reputation or rights.
Advertising Injury – losses caused by your advertising
Legal Defense and Judgments – costs to defend against real and frivolous suits and judgments up to the limit of your coverage. Note this generally does not include punitive damages for negligence or willful misconduct.
Maryland Minimum Business Insurance Requirements
Commercial Liability Insurance is not mandatory for businesses operating in Maryland. Maryland is a pure contributory negligence fault state. The plaintiff must be 100% free of fault to recover damages. Non-economic personal injury is capped at $725,000 per occurrence in Maryland, but increases $15,000 on October 1 of each year. The statute of limitations for general personal injury and products liability is 3 year. Accidents and lawsuits (legitimate and frivolous) do happen in Maryland. If you own property or other valuable assets you would be wise to invest in sufficient commercial general liability coverage for your Maryland small businesses.
How Much Maryland Commercial Liability Insurance Should You Carry?
Each situation is unique, but as a general guideline, the type of Maryland business you operate or products you manufacture should determine how much Maryland commercial general liability insurance you need. A good rule of thumb for most small businesses is between $500,000 and $1 million. However, if yours is a high-risk business such as the building trades or has a high volume of interaction with the public such as a restaurant or retail business, you should consider increasing your coverage. Note that if you operate out of your home, your homeowner’s or renter’s insurance has limited coverage for business liability and loss.
How Are Premium Costs Assessed?
Maryland commercial liability insurance premiums are based on a number of factors including the types of service or products you provide, the number of people you employ, how long you’ve been in business, and your claims history. Coverage is typically capped at a specific dollar amount for your policy period.
Other Insurance to Consider for Your Maryland Small Business
Maryland requires that anyone who employs one or more persons, whether full or part time, carryworkers compensation insurance. Sole proprietors with no employees are not required to carry workers compensation. Other exemptions may apply. For more details, visit the Maryland Workers Compensation Commission web site at www.wcc.state.md.us.
Maryland requires that all drivers carry minimum automobile insurance. If you use your car or truck for business, it is recommended that you purchase a commercial vehicle policy.
Maryland Small Business Administration
The SBA is an independent agency of the federal government created to aid, counsel, assist and protect the interests of small business concerns and maintains a District Office in Baltimore. Get the link to the Maryland SBA at www.sba.gov.
National Association of Insurance Commissioners (NAIC)
This is an organization of insurance regulators from the 50 states, District of Columbia and the five U.S. territories. NAIC provides a forum for the development of uniform policies when appropriate. It also offers an online form for filing complaints, reporting suspected insurance fraud and downloading key financial information about insurance carriers at www.naic.org.
Insurance Information Institute (III)
This organization’s mission is to improve public understanding of insurance – what it is and how it works. Visit III at www.iii.org.