If you own a small business in the Montana , this information will help you understand Montana 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 Billings, Bozeman, Butte, Great Falls, Missoula, Helena or anywhere else in the Treasure State having sufficient commercial liability coverage is an important part of any small business plan in Montana.
Fast Facts About Montana Small Business
A small business is defined as any company with fewer than 500 employees. Small business is vital to Montana’s economic well-being, accounting for over 97% of all state employers. Of Montana’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 Montana Small Business Profile 2011.
About Commercial Liability Insurance for MT Businesses
Commercial liability insurance (also called business liability insurance and commercial general liability insurance) protects your Montana 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.
Montana Minimum Business Insurance Requirements
Commercial Liability Insurance is not mandatory for businesses operating in Montana. Montana is a modified comparative negligence fault state. A plaintiff can only recover if he or she is no more than 505 at fault. There is $10 million cap or 3% of the defendant’s net worth for personal injury rewards. The statute of limitations for personal injury is 3 years for negligent conduct and 2 year for intentional conduct. Product liability statute of limitations is 3 years. Accidents and lawsuits (legitimate and frivolous) do happen in Montana. If you own property or other valuable assets you would be wise to invest in sufficient commercial general liability coverage for your Montana small businesses.
How Much Montana Commercial Liability Insurance Should You Carry?
Each situation is unique, but as a general guideline, the type of Montana business you operate or products you manufacture should determine how much Montana 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
Montana 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 Montana Small Business
Montana requires that anyone who employs one or more persons, whether full or part time, carry workers compensation insurance. Under certain circumstances, this can apply to independent contractors unless they provide proof of self-insurance or sign an exemption form. Sole proprietors with no employees are not required to carry workers compensation. Contact the Montana Department of Labor for details of exemptions and compliance. erd.dli.mt.gov
Montana 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
Montana State Auditor and Commissioner of Insurance and Securities
This agency is responsible for regulating all insurance policies sold in the state, including commercial liability coverage. Visit their website at www.sao.mt.gov. Call 800-332-6148. Write 840 Helena Ave., Helena, MT 59601.
Montana 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 Helena. Get the link to the Montana 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 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.