As a business owner in the state of Minnesota, there are many types of commercial insurance available to protect your business against a variety of risks. While many of these types of business insurance are optional from a legal standpoint, some are required by law.
If you own a business in Minnesota, these are some of the types of insurance you should be carrying.
Note: you should work with a business attorney when establishing your business and seek out local and state laws that govern the insurance you are required to carry.
Workers’ Compensation Insurance
Workers’ compensation insurance provides compensation to an employee who has suffered an injury in the workplace. According to the Minnesota Department of Labor and Industry, “Minnesota Statutes, section 176.181, subdivision 2, requires all employers to either purchase workers’ compensation insurance to provide benefits to their employees for work-related injuries or obtain approval from the Minnesota Department of Commerce permitting self-insurance upon proof of the employer’s financial ability to do so.”
Even if you only have one employee, you must carry a worker’s compensation insurance plan. Sole proprietorships are exempt from the rule. Learn more about Minnesota’s laws on workers’ compensation insurance here.
Commercial Auto Insurance
If you are a business that has one or more vehicles that are “business-owned” and used for business purposes, Minnesota law states that you must insure those vehicles. According to the Minnesota Commerce Department, “All motorized vehicles, whether used for personal or business purposes, need auto insurance.” This type of liability insurance covers the medical expenses incurred by injured persons as well as damages to the property of other individuals that is the result of an accident. The liability limits on commercial auto insurance are generally higher than they are for personal vehicles.
You can find more information on the law and other details here.
While not exactly business insurance, there are many surety bonds that are required by the state for businesses to obtain. Surety bonds work differently than commercial insurance because they do not protect your business from financial risks. Instead, they protect your customers should you fail to perform a certain action or fulfill a contract. This is why businesses in industries like construction are required to be licensed and bonded by the state of Minnesota. These license bonds are required for many Minnesota businesses, some of which include:
- Plumbers and electricians
- General contractors
- Auto dealers
- Freight brokers
- Real estate brokers
There are many more businesses that require license bonds in Minnesota. Make sure you understand the law in your local municipality and particular industry.