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required business insurance

While business insurance laws vary by state, there are a number of coverages that are almost universally required. Read on to determine what your business needs and how to protect your assets and your employees. Plus, learn how Merchants can help your business with the coverages you need, as well as extras to provide complete coverage.


Workers’ Compensation Insurance

The federal government requires every business with employees to have workers’ compensation coverage.  Specific insurance requirements are dictated by state regulations and often depend on the number of employees you have.1

  • Failing to comply with state laws can result in serious penalties for business owners. Workers’ compensation insurance pays for an employee’s medical bills, rehabilitation, and lost income if they’re injured while on the job.2
Automobile Insurance

States require auto insurance for vehicles, so if you have business vehicles (cars, trucks, vans or other vehicles you use in your business), they’ll need to be insured.3

  • Most states require you to purchase liability insurance for bodily injury and property damage that may result from a vehicle accident occurring while you or someone from your organization is driving for business. Your insurance agent will ask for detailed information about how vehicles will be used, who will be driving them, and so forth.
General Liability

General liability insurance covers problems that may arise from normal business activities. It helps to protect against customer injuries, damaged customer property, and accusations of defamation and copyright infringement.4

  • General liability is often required for business licensure. Dentists and accountants, among others, need a license to practice in the United States.5
  • In addition, a professional who rents an office or workspace may need general liability insurance for lease requirements.
Commercial Property Insurance

Commercial property insurance covers your business’s real estate and its contents. It helps pay for repair or replacement when business property is lost, damaged, or destroyed.6

  • Mortgage lenders typically require commercial property insurance for the life of the mortgage.
  • Landlords often require proof of commercial property coverage from their business tenants.
  • Though landlords carry property insurance for their buildings, they won’t take responsibility for any expensive business property a tenant keeps in the space.
  • Additional types of insurance may be required by your state; this information can be found by visiting your state’s Department of Insurance website, and checking with local municipal authorities.7


What does Merchants offer to help your business succeed?

Merchants provides a number of coverages that are automatically included in many policies such as:
  • Business Income and Extra Expense, which protects you from loss of income from business interruption for up to one year and pays the full cost of needed extra expenses to keep you in business.
  • Identity Recovery, which includes expense reimbursement and identity recovery services to assist in resolving and correcting your credit history and identity records. Both you as the owner and your full-time employees are covered.


Merchants Also Offers these Optional Coverages:

Cyber Liability Coverage

We are proud to partner with TMHCC CyberNET to help you prevent or mitigate the damages from a cyber data breach. As a Merchants cyber liability insurance policyholder, your policy includes TMHCC CyberNET, giving you access to expert cyber risk advisors when you need them, plus 24/7 online training courses, sample policies, compliance materials, risk management, vendor agreement templates, and much more.

EPLI, or Employment Practices Liability

Employment Practices Liability protects you against claims of discrimination, wrongful termination or harassment and other types of work-related discrimination. (Not available in Vermont).

  • Claims alleging gender, race, and age discrimination; coverage for claims brought by current and former employees; coverage for claims brought by applicants for employment and volunteers
  • Employment Practices Liability is automatically included with Merchants Advantage Plus® Business Owners and Merchants Advantage Plus® Contractors Package policies. It is an optional coverage with Merchants’ Commercial Package Policy.

Business insurance coverage requirements and laws change so it’s important to review coverages with your Merchants agent each year. The agent will make sure you have adequate coverage, get rid of extras you no longer need, and identify new risks or exposures.

Need help determining your business insurance needs?

Contact a Merchants agent today!



  4. Insureon (GL Coverages)
  5. Insureon (General Liability Requirements)
  6. Insureon (Commercial Property)

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Erica Dalton

Merchants Insurance Group

Merchants Insurance Group sells its products through a network of more than 1,000 independent insurance agents in Massachusetts, Michigan, New Hampshire, New Jersey, New York, Ohio, Pennsylvania, and Vermont. We sell our products through independent insurance agents because we believe they provide value to policyholders through their broad range of products and their insurance expertise.