Nevada boasts 229,000 small businesses and a reputation as one of the most tax-friendly states, contributing to its rapidly growing population. However, as a small business owner in the Silver State, ensuring your business is adequately safeguarded with the right insurance coverage is crucial. In this article, we will discuss the insurance requirements set by the state of Nevada, shedding light on the necessity of general liability insurance. Additionally, we will explore other business insurance policies to provide extra protection for your business.
Kinds of Insurance That Is Required In Nevada
In Nevada, every business must have workers’ compensation insurance as mandated by the Nevada Department of Insurance. The sole exemption is for the agricultural sector only if the annual employee payment is below $20,000. Additionally, individuals using vehicles for work purposes, such as transporting patients or delivering goods, are strongly recommended to obtain commercial auto insurance. This ensures comprehensive coverage and compliance with essential regulations.
Workers’ Compensation Insurance
According to Nevada law, businesses with one or more employees must have workers’ compensation insurance. This type of coverage is crucial for both you and your employees. If an employee experiences a work-related injury or illness, workers’ compensation insurance covers their medical expenses and a portion of the wages they lose while recovering. It’s worth noting that most employees who opt for coverage under a workers’ comp plan typically forfeit their right to sue you for the injury, with a few exceptions. This ensures a layer of protection for all parties involved.
Types of Business Insurance in Nevada
We advise small businesses in Nevada to consider a few more insurance coverage options.
General Liability Insurance Coverage
Nevada does not require businesses to have general liability insurance (business, commercial, or casualty insurance). But, we strongly advise all business owners to consider it. Because general liability insurance is both affordable and provides broad coverage. Typically, it covers: [continue with the specifics].
- Third-party property damage: Your insurance company covers repairing or replacing someone’s personal property if it’s damaged while at your business.
- Third-party bodily injury: This aspect of your general liability policy covers medical bills if someone is injured on your property, whether within your business or on the premises.
- Personal and advertising injury: If you face allegations of slander, copyright infringement, or libel, your policy comes into play. Your insurance company will supply legal representation and cover legal costs in case of a lawsuit.
Liability coverage means in real-life situations
- Example #1: A customer in your grocery store accidentally drops a jar of pickles, resulting in a cut. Your general liability insurance steps in to cover the medical expenses of the injured customer.
- Example #2: A new employee operating a cart machine accidentally collides with a customer’s car, causing damage to the rear bumper. Your general liability coverage pays for the repair of the damaged bumper.
- Example #3: During a business function, one of your managers consumes too much alcohol and makes unfavorable remarks about competitors, leading to a slander lawsuit. Fortunately, general liability coverage safeguards your business and assists with the legal costs associated with the lawsuit.
Commercial Property Insurance
For business owners in Nevada, having commercial property insurance (also known as business property insurance) is a smart move, whether you rent, lease, or own a physical business space. This insurance is there to cover any physical damage that might happen to your building. It covers damage from vandalism, theft, fire, and storms. This policy protects your inventory, equipment, furniture, and business and personal belongings.
However, it’s crucial to note that most insurance carriers exclude damage caused by flooding, even if it results from storms. Consider getting a separate flood insurance policy if your business is in a flood-prone area.
Nevada Business Owners’ Policy
A business owners’ policy (BOP) is like a package deal for small businesses in Nevada. It combines different insurance coverages and usually comes at a more affordable cost compared to getting each insurance separately. For instance, a standard BOP typically includes commercial property insurance, general liability insurance, and business interruption insurance, all bundled up for a fraction of their prices.
Moreover, insurance companies might add other options to a BOP to cover risks specific to your industry. Opting for a BOP lets you get tailored coverage that suits your business, and it’s a smart way to ensure comprehensive protection without breaking the bank.
Business Interruption Insurance
If your business gets damaged by recent storms and you can’t operate, this policy helps shield you from financial losses. Without it, your lender might take the hit if you can’t pay your bills.
Business income insurance covers various expenses, like payroll, lease payments, and taxes. It may even include a portion of your business’s lost profits. However, it’s important to note that this type of policy usually has a specific time limit. So, the main goal is to get your business back on track within that timeframe.
General Liability Insurance Nevada: Home-Based Business Insurance
If you run a business from home, your regular homeowner’s insurance might not fully cover your business stuff or inventory. If clients or customers visit your home office and something goes wrong, your insurance might not cover the accidents or injuries, leaving you financially responsible. That’s why it’s a good idea to talk to your agent and see what your coverage includes. If it’s not enough, consider asking about home-based business insurance.
General Liability Insurance Nevada: Professional Liability Insurance
Professional liability insurance, sometimes called errors and omissions insurance, is there to have your back if your business is accused of professional slip-ups. This includes professional negligence, missing deadlines, errors in your work, and even accusations of libel or slander, similar to what general liability insurance covers.
If you are facing legal trouble, professional liability insurance steps in to cover your legal costs, take care of claims, and any other expenses that might pop up. This kind of insurance is typically recommended for professionals like lawyers, architects, and healthcare providers in Nevada.
General Liability Insurance Nevada: Commercial Auto Insurance
If you own or lease vehicles for your business, it’s a must to have commercial auto insurance. This coverage is specifically for vehicles used for business purposes. In a commercial auto policy, you will find coverage for third-party bodily injury and property damage, personal injury protection, comprehensive coverage, and collision coverage. Some businesses also add uninsured and underinsured motorist coverage for extra protection.
In Nevada, drivers must have a minimum of $50,000 in auto insurance coverage to handle claims in case of injuries or fatalities in an accident they’re involved in. Additionally, your chosen policy should include at least $20,000 in coverage for property damage. Complying with these requirements is essential to ensure you are adequately covered on the road.
General liability insurance Nevada: Cyber Liability Insurance
Cyber liability insurance, or data breach insurance, is like a safety net for your business in case of a cyberattack or data breach. A cyber liability policy steps in if hackers enter your systems and compromise customer data or other information. It covers the expenses of notifying affected customers and providing credit monitoring. It’s a way to safeguard your business and customers in a digital security breach.
Nevada Small Businesses Commonly Insured
In Nevada, several professions commonly have insurance coverage, such as:
- Lawn care businesses
- Real estate agents
- Food trucks
- Cleaning services
- Dry cleaners
- Personal trainers
Cost of Nevada Business Insurance
Getting business insurance in Nevada doesn’t need to be expensive. The initial price for general liability insurance coverage for a small business in Nevada can begin at around $29 per month, providing coverage ranging from $500,000 to $1 million. However, it’s important to note that several factors can influence the cost, including but not limited to:
- Industry: Your business’s field, whether law, healthcare, construction, or another sector, impacts insurance costs.
- Location: The specific location of your business, be it in a city, county, or neighbourhood, influences insurance expenses.
- Business Duration: The length of time your business has been operating is a factor in determining insurance costs.
- Claims Record: The history of claims, including the number and amount, affects the overall insurance cost.
- Choice of Insurance Provider: The insurance company you select plays a role in determining the cost of coverage.
- Insurance Details: Factors such as deductibles, policy limits, and the type of insurance coverage you opt for contribute to the overall cost.
- Number of Employees: The size of your workforce is considered when calculating insurance expenses.
These are some of the aspects an insurance agent will consider when evaluating the insurance needs of a small business.