If you own a small business in the Tennessee , this information will help you understand Tennessee 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 Nashville, Memphis, Knoxville, Chattanooga, Murfreesboro or anywhere else in the Volunteer State, having sufficient commercial liability coverage is an important part of any small business plan in Tennessee.
Fast Facts About Tennessee Small Business
A small business is defined as any company with fewer than 500 employees. Small business is vital to Tennessee’s economic well-being, accounting for 97% of all state employers. Of Tennessee’s 552,653 small businesses in 2008 (the latest data available), 99,339 were small employers, accounting for 45% of the state’s private-sector jobs. Another 453,314 were sole proprietorships with no employees.
Source: SBA Tennessee Small Business Profile 2011.
About Commercial Liability Insurance for TN Businesses
Commercial liability insurance (also called business liability insurance and commercial general liability insurance) protects your Tennessee 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.
Tennessee Minimum Business Insurance Requirements
Commercial Liability Insurance is not mandatory for businesses operating in Tennessee. Tennessee is a modified comparative negligence fault state. A plaintiff can only recover damages if he or she is less than 50% at fault. There are no personal injury award caps in Tennessee. The statute of limitations for any personal injury for negligent conduct and for product liability is 1 years. Accidents and lawsuits (legitimate and frivolous) do happen in Tennessee. If you own property or other valuable assets you would be wise to invest in sufficient commercial general liability coverage for your Tennessee small businesses.
How Much Tennessee Commercial Liability Insurance Should You Carry?
Each situation is unique, but as a general guideline, the type of Tennessee business you operate or products you manufacture should determine how much Tennessee 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
Tennessee 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 Tennessee Small Business
Tennessee requires that anyone who employs 5 or more persons, whether full or part time, carry workers compensation insurance. Employers engaged in mining and producing coal must carry workers compensation if they have 1 or more full or part time employees. Sole proprietors with no employees are not required to carry workers compensation. Other exemptions may apply. Contact the State of Tennessee for details of exemptions and compliance. www.tn.gov.
Tennessee 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.
Tennessee Department of Insurance
500 James Robertson Pkwy, Davy Crockett Tower, Nashville, TN 57243-0565
Tennessee 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 Nashville and Memphis. Get the link to the Tennessee SBA at www.sba.govs-list/2
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.