If you own a small business in the Rhode Island , this information will help you understand Rhode Island 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 Providence, Cranston, Newport, Pawtucket, Warwick or anywhere else in the Ocean State, having sufficient commercial liability coverage is an important part of any small business plan in Rhode Island.
Fast Facts About Rhode Island Small Business
A small business is defined as any company with fewer than 500 employees. Small business is vital to Rhode Island’s economic well-being, accounting for over 96% of all state employers. Of Rhode Island’s 95,845 small businesses in 2008 (the latest data available), 24,824 were small employers, accounting for almost 56% of the state’s private-sector jobs. Another 71,021 were sole proprietorships with no employees. Source: SBA Rhode Island Small Business Profile 2011.
About Commercial Liability Insurance for RI Businesses
Commercial liability insurance (also called business liability insurance and commercial general liability insurance) protects your Rhode Island 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.
Rhode Island Minimum Business Insurance Requirements
Commercial Liability Insurance is not mandatory for businesses operating in Rhode Island. Rhode Island is a pure comparative negligence fault state. The plaintiff can recover awards even if he or she is up to 99% at fault. There is no cap on personal injury awards in Rhode Island. The statute of limitations for general personal injury is 3 years. It is 10 years from the date of purchase for product liability. Accidents and lawsuits (legitimate and frivolous) do happen in Rhode Island. If you own property or other valuable assets you would be wise to invest in sufficient commercial general liability coverage for your Rhode Island small businesses.
How Much Rhode Island Commercial Liability Insurance Should You Carry?
Each situation is unique, but as a general guideline, the type of Rhode Island business you operate or products you manufacture should determine how much Rhode Island 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
Rhode Island 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 Maine Small Business
Rhode Island requires that anyone who employs 1 or more persons, whether full or part time, carry workers compensation insurance. Sole proprietors with no employees are not required to carry workers compensation. Partners and independent contractors are also exempt. Other exemptions may apply. Contact the Rhode Island Department of Labor and Training for details of exemptions and compliance. www.dlt.ri.gov
Rhode Island mandates that employers carry employee disability insurance (also called Temporary Disability Insurance or TDI) to provide income support to employees who are out of work because of non-work related illness of injury.
Rhode Island 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.
Rhode Island Department of Business Regulation
1511 Pontiac Avenue,
Cranston, RI 02920
Rhode Island 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 Concord. Get the link to the Rhode Island 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