Business insurance is required by law, but only under certain conditions. The following business insurance is required by law if it is applicable to your situation:
- Unemployment insurance: Applies to a business that has employees and may be obligated to pay unemployment insurance taxes under prescribed conditions. If these conditions are applicable to your business, then you must register your business with the state work force’s agency.
- Workers’ compensation insurance: If your business has employees, you are most likely legally obligated to carry workers’ compensation insurance, either on a self-insured basis or through a commercial insurance carrier or a state workers’ compensation program. Workers’ compensation laws vary by state.
- Professional liability insurance: Some states require specified professionals to carry insurance against professional liability.
- Disability insurance: Several states require that a business have partial wage replacement insurance coverage for eligible employees for non-work related injury or illness. These states are California, Hawaii, New Jersey, New York, Puerto Rico and Rhode Island.