A small business is defined as any company with fewer than 500 employees. Small business is vital to Wisconsin’s economic well-being, accounting for nearly 98% of all state employers. Of Wisconsin’s 431,099 small businesses in 2008 (the latest data available), 112,558 were small employers, accounting for more than 52% of the state’s private-sector jobs. Another 318,541 were sole proprietorships with no employees.
Source: SBA Wisconsin Small Business Profile 2011.
About Commercial Liability Insurance for WI Businesses
Commercial liability insurance (also called business liability insurance and commercial general liability insurance) protects your Wisconsin 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.
Wisconsin Minimum Business Insurance Requirements
Commercial Liability Insurance is not mandatory for businesses operating in Wisconsin. Wisconsin is a modified comparative fault state. A plaintiff must be no more than 50% at fault to seek damages and recovery is reduced based on degree of fault. The statute of limitations for personal injury with negligent conduct and for product liability is 3 years. Accidents and lawsuits (legitimate and frivolous) do happen in Wisconsin. If you own property or other valuable assets you would be wise to invest in sufficient commercial general liability coverage for your Wisconsin small businesses.
How Much Wisconsin Commercial Liability Insurance Should You Carry?
Each situation is unique, but as a general guideline, the type of Wisconsin business you operate or products you manufacture should determine how much Wisconsin 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?
Wisconsin 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 Wisconsin Small Business
Wisconsin 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 Wisconsin Department of Workforce Development Workers’ Compensation Division for details of exemptions and compliance. http://dwd.wisconsin.gov/wc
Wisconsin 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.
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 Madison and Milwaukee. Get the link to the Wisconsin 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.