If you own a small business in the Missouri , this information will help you understand Missouri 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 Kansas City, Jefferson City, Springfield, St. Louis, St. Joseph, Columbia, Independence or anywhere else in the Show Me State having sufficient commercial liability coverageis an important part of any small business plan in Missouri.
Fast Facts About Missouri Small Business
A small business is defined as any company with fewer than 500 employees. Small business is vital to Missouri’s economic well-being, accounting for over 97% of all state employers. Of Missouri’s 498,930 small businesses in 2008 (the latest data available), 117,286 were small employers, accounting for over 49% of the state’s private-sector jobs. Another 381,644 were one-person operations with no employees.
Source: SBA Missouri Small Business Profile 2011.
About Commercial Liability Insurance for MO Businesses
Commercial liability insurance (also called business liability insurance and commercial general liability insurance) protects your Missouri 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.
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.
Property Damage – damage done to another person’s property by you or an employee in the course of conducting your business.
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.
Missouri Minimum Business Insurance Requirements
Commercial Liability Insurance is not mandatory for businesses operating in Missouri. Missouri is a pure comparative negligence fault state. An insurance adjuster assesses who is at fault and pays accordingly. There is $350,000 cap per occurrence on non-economic damages for personal injury in Missouri with no inflation adjustment. The statute of limitations for personal injury is 5 years for negligent conduct and 2 year for intentional conduct. Product liability statute of limitations is 5 years. Accidents and lawsuits (legitimate and frivolous) do happen in Missouri. If you own property or other valuable assets you would be wise to invest in sufficient commercial general liability coverage for your Missouri small businesses.
How Much Missouri Commercial Liability Insurance Should You Carry?
Each situation is unique, but as a general guideline, the type of Missouri business you operate or products you manufacture should determine how much Missouri 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
Missouri 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 Missouri Small Business
Missouri requires that anyone who employs 5 or more persons, whether full or part time, carry workers compensation insurance, unless you are in the construction industry, in which case you must carry coverage for one or more employees. Sole proprietors with no employees are not required to carry workers compensation. Other exemptions may apply. Contact the Missouri Department of Labor for details.http://labor.mo.gov/dwc
Missouri 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.
Employee Disability Insurance
BOP – Business Owner’s Package
E&O – Errors & Omissions
EPLI – Employment Practices Liability Insurance
Commercial Property Insurance
Regulating Agency and References
Missouri Insurance Department
This agency is responsible for regulating all insurance policies sold in the state, including commercial liability coverage. Visit their website at insurance.mo.gov. Call 573-751-4126. Write P.O. Box 690, Jefferson City, MO 65102-0690.
Missouri 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 Offices in Kansas City and St. Louis. Get the link to the Missouri 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.