Vermont Commercial Liability Insurance Guide
If you own a small business in the Vermont , this information will help you understand Vermont 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 Montpelier, Burlington, Rutland or anywhere else in the Green Mountain State, having sufficient commercial liability coverage is an important part of any small business plan in Vermont.
Fast Facts About Vermont Small Business
A small business is defined as any company with fewer than 500 employees. Small business is vital to Vermont’s economic well-being, accounting for nearly 97% of all state employers. Of Vermont’s 241,692 small businesses in 2008 (the latest data available), 58,412 were small employers, accounting for almost 49% of the state’s private-sector jobs. Another 183,280 were sole proprietorships with no employees. Source: SBA Vermont Small Business Profile 2011.
About Commercial Liability Insurance for VT Businesses
Commercial liability insurance (also called business liability insurance and commercial general liability insurance) protects your Vermont 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.
Vermont Minimum Business Insurance Requirements
Commercial Liability Insurance is not mandatory for businesses operating in Vermont. Vermont is a modified comparative fault state. If the plaintiff cannot recover an award if he or she is more than 51% at fault. There are no personal injury award caps in Vermont. The statute of limitations is 3 years for general personal injury and product liability. Accidents and lawsuits (legitimate and frivolous) do happen in Vermont. If you own property or other valuable assets you would be wise to invest in sufficient commercial general liability coverage for your Vermont small businesses.
How Much Vermont Commercial Liability Insurance Should You Carry?
Each situation is unique, but as a general guideline, the type of Vermont business you operate or products you manufacture should determine how much Vermont 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
Vermont 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 Vermont Small Business
- Vermont 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. Other exemptions may apply. Contact the Vermont Department of Labor for details of exemptions and compliance. http://www.labor.vermont.gov/
- Vermont 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.
Regulating Agency and References
Vermont Insurance Department
This agency is responsible for regulating all insurance policies sold in the state, including commercial liability coverage.
Vermont 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 Vermont SBA at http://www.sba.gov/about-offices-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 http://www.naic.org/cis
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 http://www.iii.org.