ID Small Business Solutions Insurance heading
  Idaho Small Business Solutions - Hot Topics Idaho Small Business Solutions - Frequently Asked Questions Idaho Small Business Solutions - Glossary Idaho Small Business Solutions - Links Idaho Small Business Solutions - Search Idaho Small Business Solutions - Site Map Idaho Small Business Solutions - Help Idaho Small Business Solutions - Feedback Idaho Small Business Solutions - Email Us
Idaho Small Business Solutions - Home Page
Idaho Small Business Solutions - Business Wizard
Idaho Small Business Solutions - Resource Wizard
Idaho Small Business Solutions - Business Assistance
Idaho Small Business Solutions - Legal Structure and DBAs
Idaho Small Business Solutions - Taxes
Idaho Small Business Solutions - Licenses
Idaho Small Business Solutions - Insurance
Idaho Small Business Solutions - Employer Issues
Idaho Small Business Solutions - Forms
Idaho Small Business Solutions - Agencies

State of Idaho Web Site

 


Insurance

All businesses need insurance, but how much and what type depends on your business activities. Many types of insurance are available; some are required by law and others are optional. Unless otherwise noted, most insurance can be obtained from an insurance company specializing in business insurance. For information about a specific type of insurance, choose from the following:

Workers Compensation Insurance
Unemployment Insurance - State and Federal
Health Insurance
Disability Insurance
Surety Bond
Fidelity Bond
General Liability
Product Liability
Completed Operations (Errors and Omissions)
Professional Liability
Automobile/Fleet
Business Liability
Business Interruption
Key Person
Life Insurance
Employment Practices Liability Insurance
Director's & Officer's Liability Insurance
Property Insurance
Contents Insurance
Business Theft Insurance
Business Identity Theft Insurance
Umbrella (Supplemental Liability)
Home Office
Insurance Fraud
Small Business Owners' Guide to Insurance

Required Insurance: Businesses with employees are required to carry worker's compensation insurance and unemployment insurance, with few exceptions.

WORKER'S COMPENSATION INSURANCE: Most businesses having employees must carry worker's compensation insurance, which is administered by the Idaho Industrial Commission. Worker's compensation insurance is no-fault insurance that covers lost wages and provides medical benefits for workers who sustain a job-related injury or illness. Rehabilitation services are also available.

Workers comp insurance can be obtained in four ways:    

  • Private Insurance Company – Many private insurance companies are licensed to offer worker's compensation insurance in Idaho. To find a company, contact an insurance agent.  

  • State Insurance Fund – Coverage is available through the State Insurance Fund. For information, visit their website at http://www.idahosif.org/ or call (208) 332-2100 or 1-800-334-2370.

  • Assigned Risk Pool – Employers considered to be high risk and who are unable to obtain coverage from private insurance companies or the State Insurance Fund can apply for coverage through the assigned risk pool, administered by the National Council on Compensation Insurance (NCCI). For information, contact your insurance agent, call NCCI at 1-800-622-4123, or visit their website at http://www.ncci.com/.

  • Self-insurance – This option is available only to Idaho employers with large payrolls who are able to meet specific requirements. Approval for self-insurance must be obtained from the Idaho Industrial Commission.

link to a list of  Workers Compensation Exemptions Some types of employment are exempt from Worker's Compensation coverage. For information, click the box to the right.

Employers are required to display a poster indicating they provide worker's compensation insurance. The poster should be provided by the insurance company from whom the insurance is obtained. For information, visit http://www.iic.idaho.gov/posters/posters.html

Worker's Comp Fraud - Fraud is a huge issue with worker's comp claims. An employee may claim an injury was work-related when it wasn’t, exaggerate an injury, or prolong collection of benefits in another way. If you suspect an employee may be committing fraud, you can help your insurance company catch and prosecute the person by reporting the issue to your insurance company or the Idaho Industrial Commission. For information on workers comp fraud and how to minimize occurrences or detect it, visit http://www.hubinternational.com/uploadedFiles/Risk_Consulting/Combating%20WC%20Fraud%20EXTERNAL%20-%207-10-11FINALDRAFT.pdf and http://sbinformation.about.com/cs/insurance/a/ucfraud.htm 

Idaho Industrial Commission offices are located throughout Idaho. To find the one nearest youlink to a list of  IIC regional offices, click on the box to the right.

 


UNEMPLOYMENT INSURANCE - State and Federal 

Businesses with employees are required to carry Unemployment insurance. The insurance is actually a tax paid by the employer, not insurance. State unemployment taxes are administered by the Idaho Department of Labor. The Internal Revenue Service administers the federal unemployment tax. For information, visit the Taxes section of this website.

Stabilizing the Economy: Unemployment insurance (UI) acts as an economic stabilizer, providing unemployed individuals and families with a source of income as they transition from one job to another. In a recession, UI benefits offset some of the effects of job losses on a community's spending power. Because UI benefits allow unemployed individuals and their families to continue to pay their bills, it helps maintain the incomes and spending power of local stores, landlords, banks, and service providers. UI softens the blow and reduces the snowball effect of job losses.

Retaining a local workforce:  Unemployment insurance (UI) promotes stability by making it possible for employers to retain workers during the business's slow season or during a short downturn in business. Many seasonal industries would find it difficult to attract and retain employees if their workers could not rely on UI to support them through the off-season.

Top


Other Types of Insurance You May Need:  Following are numerous types of optional insurance available to businesses. You may need one or more of them, depending on your particular business activity. Home-based businesses may have special needs in addition to those listed below. Your insurance agent or professional association can provide information on availability and cost.

Some types of insurance may not be legally required, but potential customers may not do business with you unless you have the coverage. Two examples are surety bonds and fidelity bonds.

Surety Bond - A form of insurance that guarantees that a business has the financial capacity to perform the service for which it has been hired. This is common in the construction industry. Contact your insurance agent for information.

Contractors who own small firms or who own an emerging business and who are unable to obtain surety bond insurance through an insurance company may qualify for the Small Business Administration's (SBA) Surety Bond Guarantee Program. For information, visit http://www.sba.gov/surety-bonds. The SBA does not provide the bond. Rather, it provides a guarantee to an insurance company that a business will meet its obligations.

Fidelity Bond - A type of insurance that protects employers against employee dishonesty, theft, negligence, fraud and/or embezzlement. Employees who have direct access to a company's cash, securities, and/or accounting records, and those who handle investment funds or act as administrators or trustees, should be bonded.

Two types of fidelity bonds are available. A blanket fidelity bond automatically covers all employees of a business, such as a bank or investment company. Specialty fidelity bonds cover specific individuals who are named in the bond, such as janitors, office managers or trust or pension fund managers. Fidelity bonds are purchased from insurance companies.


Health Insurance - Providing health insurance for your employees is optional. However, it is an important benefit that may help you recruit and retain employees. For a list of companies approved to sell health insurance plans to Idaho businesses, visit the Idaho Department of Insurance website at http://www.doi.idaho.gov/Health/smempl_list.aspx.  

  • Maternity Coverage - If you provide health insurance and you have 15 or more employees, the federal Civil Rights Act requires you to provide maternity coverage for your employees and their dependent spouses (but not dependent children). The Idaho Human Rights commission, however, requires Idaho employers with 5 or more employees and who offer health insurance to provide maternity coverage for employees and dependent spouses. For information, visit http://www.doi.idaho.gov/consumer/empl_maternity.aspx
     
  • Dependent Children - If you have employees who pay court-ordered child support, you may be required to enroll their dependent children in your company's health insurance program. For information, visit the Employer Issues section of this website and look for "Child Support Payroll Deductions."

  • Chamber of Commerce Members - If you are a small or mid-sized business and you are a member of a Treasure Valley-area chamber of commerce, you can enroll in a group health plan, Chamber Blue, created in cooperation with Blue Cross of Idaho and Regence BlueShield. The plan offers savings of about 20% to qualified businesses. For information, visit http://www.bcidaho.com/plans/employer_sponsored/Chamber_Blue_Small.asp   Currently, the service is available only to members of chambers of commerce located in the Treasure Valley, though the program is being developed in other areas of the state.

National Standard Insurance Reporting Number - If your business offers health insurance to employees, you will need a National Standard Employer Identification number for electronic claims reporting. For information, see http://www.cms.gov/Regulations-and-Guidance/HIPAA-Administrative-Simplification/EmployerIdentifierStand/index.html.

Caution - Numerous companies sell bogus health insurance plans, particularly to small businesses and the self-employed. The plans may be promoted as association plans or union plans. Before you sign up for any insurance plan, contact the Idaho Department of Insurance to find out if the plan and the selling agent are licensed to do business in Idaho. Though the agent may tell you he/she doesn't need a state license, that is incorrect. Anyone selling insurance in Idaho must be licensed in Idaho, both the agent and the company they represent.


Disability Insurance - Idaho, unlike some states, does not have a state-mandated disability insurance program for employees other than the coverage offered by Worker's Compensation and your company's health insurance plan. According to the Social Security Administration, a 20 year-old worker has a 30 percent chance of becoming disabled during her/his working years. Therefore, business owners may want to secure disability coverage for themselves and for key employees, particularly if your business engages in high risk activities. 

Both short term and long term disability insurance is available. Short term covers the early stages of a disability and is more appropriate for someone who is expected to make a full recovery. Long term disability insurance generally covers up to 5 years or until the person qualifies for either Medicare or Social Security disability payments. For information on Social Security disability insurance, visit http://www.socialsecurity.gov/dibplan/. Disability insurance can be obtained from most insurance companies offering health insurance.


Business Liability/Property Insurance  - This insurance protects buildings, property and inventory owned by the business against physical loss or damage by theft, fire, water, accident, or other occurrences. Coverage can include property not located at your business location, such as equipment and/or supplies being used at a job site. Additional items, such as outdoor signs, may be covered as well. 

Contents Insurance - If you rent your building, the landlord should carry property insurance on the building itself (be sure to ask). You will need to obtain contents insurance to cover your property used or stored in the building. Similar to personal renter's insurance, contents insurance covers damage, loss, or theft of the contents of a building. Anything the business needs to function properly should be insured, including leased equipment and items temporarily located at a job site.

Business Interruption - This liability insurance protects against loss if business activities are interrupted by a natural disaster, such as a fire or flood. It supplements Business Liability coverage and can be added to a business liability or property insurance policy. A separate policy is not usually required. 


General Liability - This insurance protects the business if someone suffers a bodily injury while on your premises or your employees damage the property of a customer while at a job location.

Employment Practices Liability Insurance (EPLI) - Protects against wrongful termination, discrimination, harassment and other employment-related lawsuits filed by employees, former employees and potential employees. The insurance covers the business, including officers and directors.

Product Liability - Protects against lawsuits for injury or property loss due to a defect, design flaw or malfunction of a product, food, medication or another item. Both manufacturers and retailers may need this insurance.

Professional Liability - Protects professionals and others who have greater than average knowledge in a particular area, such as doctors, lawyers, engineers, architects or counselors, against law suits related to their professional expertise. Medical malpractice insurance is a type of professional liability insurance.

Director's & Officers Liability Insurance - Officers and directors of a corporation or non-profit organization can be held personally liable for their actions on behalf of the company. This insurance protects them should law suits arise. Some individuals may not be willing to serve on a board of directors without this coverage. 

Umbrella (Supplemental Liability) - This policy provides additional liability coverage beyond that offered by a primary liability policy. This may be needed by businesses engaged in high-risk activities. 


Completed Operations (Errors and Omissions) - CPAs and other licensed professionals, such as contractors, real estate agents, architects, home appraisers and others, may need this type of insurance to protect against mistakes that could cause financial harm to a client or related party. 


Automobile/Fleet - Called fleet insurance, coverage is similar to automobile insurance carried by individuals. If your business owns or leases a vehicle used primarily for business purposes (car, truck, van, or trailer), your private auto insurance may not provide coverage. If you use your personal vehicle in your business, you may need special insurance coverage called "non-owned automobile coverage." Your insurance agent can provide details.


Life Insurance - Can be an individual policy on the business owner or a  group policy on the owner and employees.

Key Person - A type of life insurance that protects a business against financial loss caused by the death or disability of a key person (someone whose knowledge and/or skill materially contributes to the financial success of the business), including the owner, partners, and members of the management team. Also used to fund buy/sell agreements when a business has more than one owner. The business owns the policy, pays the premiums, and is the beneficiary.


Business Theft Insurance - Covers theft by employees, competitors, and others, including intellectual property theft. You may need this in addition to liability insurance (which covers property theft).

Business Identity Theft Insurance - If your business collects, stores, or handles customers', patients' or employees' confidential, personal, or financial data, you may need this insurance. It covers the costs of notifying customers or employees of theft, fees associated with recovery of the data, legal fees, and other issues. Banks and other financial institutions, medical offices and hospitals, insurance agencies, employment agencies and other businesses that collect and store personal data for any reason may need this insurance.


Home-Based Business - If you work from your home, you may need additional coverage beyond that offered by your homeowner's policy. Check with your insurance agent to be certain you are fully covered. Not all home-based business activities are covered by homeowners' insurance, particularly if the actual activity, such as house painting, does not occur at your home. If you need additional coverage, contact an independent insurance agent who represents multiple companies. They can help you obtain the best coverage to fit your particular needs.


Small Business Owners' Guide to Insurance: Published by the Insurance Information Institute, this booklet covers basic insurance needs for small businesses. Information is also available on insurance needs for specific types of businesses, such as internet businesses, artists, food service, and farms and ranches - http://www.iii.org/smallbusiness/


Insurance Fraud: If you suspect an insurance company or agent may have committed fraud by violating insurance laws or regulations, you can file an on-line report with the National Association of Insurance Commissioners (NAIC) at https://eapps.naic.org/ofrs/ and with the Idaho Department of Insurance at http://www.doi.idaho.gov/investigations/investigation.aspx.

If you suspect one of your employees or a business owner may have committed insurance fraud, contact your insurance company or the Idaho Department of Insurance to determine how to proceed. Also see "worker's comp fraud" under Worker's Compensation Insurance at the top of this page.

Top


Home / Business Wizard / Resource WizardBusiness AssistanceLegal Structure & DBAs / Taxes / Licenses / Insurance / Employer Issues / Forms / Agencies / Hot Topics / FAQs / Glossary / Links / Search / Site Map / Help  / Feedback / Email Us

If you didn't find the information you needed, please E-mail Us by using the tab at the top of the page.
If you have comments about the site, please send them to us by using the FeedBack tab at the top of the page.
 
 This site is maintained by
Idaho Small Business Development Center, 1910 University Drive, Boise, ID 83725-1655

This Web site is brought to you by the combined efforts of more than 20 local, state, and federal agencies.  It was funded by a grant from the USDA Rural Development, Rural Business-Cooperative Service.

Privacy Statement

Copyright © 1999-2013 Idaho SBDC; All Rights Reserved.