If you own a small business in the Buckeye State, this information will help you understand Ohio 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 Columbus, Cleveland, Cincinnati, Akron, Dayton, Toledo or Springfield, having sufficient general liability insurance is an important part of any small business plan in Ohio.
A small business is defined as any company with fewer than 500 employees. Small business is vital to Ohio’s economic well-being. Of Ohio’s 902,369 small businesses in 2008 (the latest data available), 195,830 were small employers, accounting for more than 48% of the state’s private-sector jobs. Another 706,539 were one-person operations with no employees.
Source: SBA Ohio Small Business Profile 2011
About Commercial Liability Insurance for OH Businesses
Commercial liability insurance (also called business liability insurance and commercial general liability insurance) protects your Ohio 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.
Ohio Minimum Business Insurance Requirements
Commercial Liability Insurance is not mandatory for businesses operating in Ohio. The Ohio Supreme Court has upheld a financial cap on monetary awards given by trial juries in an effort to curb “outlandish awards… that were forcing business to leave the state.” However, accidents and lawsuits (legitimate and frivolous) still happen. If you own property or other valuable assets you would be wise to invest in sufficient commercial general liability coverage for your Ohio business to limit your risk exposure.
How Much Ohio Commercial Liability Insurance Should You Carry?
Each situation is unique, but as a general guideline, the type of Ohio business you operate or products you manufacture should determine how much Ohio 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?
Ohio 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 Ohio Small Business
Ohio requires that anyone who employs one or more persons, whether full or part time, carry workers compensation insurance. Sole proprietors with no employees are not required to carry workers compensation. Note that Ohio is seeking to legislate a uniform definition of an employee. If you are uncertain about your particular circumstances, consult Ohio Bureau of Workers’ Compensation, www.ohiobwc.com.
Ohio 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
Ohio Department of Insurance
This agency is responsible for regulating all insurance policies sold in the state, including commercial liability coverage.
Ohio Department of Insurance
50 W. Town St., Suite 300
Columbus, OH 43215
Ohio 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 District Offices in Columbus and Cleveland. Get the link to the Ohio SBA at http://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