All businesses need insurance, but how much and what type will depend 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:

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

WORKER'S COMPENSATION INSURANCE: 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.

Worker's compensation insurance can be obtained in four ways:    

• Private Insurance Company – Many private insurance companies sell worker's compensation insurance. To find a company, contact an insurance agent to find a company licensed to sell workers comp insurance in Idaho.  
  
  
• State Insurance Fund – Coverage is available through the State Insurance Fund. For information, visit their Web site 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. The pool is administered by the National Council on Compensation Insurance (NCCI). Contact your insurance agent or call NCCI at 1-800-622-4123 or visit their Web site at http://www.ncci.com/.
  
  
• Self-insurance – This option is available to Idaho employers who have large payrolls and who are able to meet specific requirements. Approval for self-insurance must be granted by the Idaho Industrial Commission.

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 comp insurance. The poster should be provided by the insurance company from whom you purchase your worker's comp insurance. 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. For information on workers comp fraud and how to minimize occurrences or detect it, visit http://sbinformation.about.com/cs/insurance/a/ucfraud.htm

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 Web site.

Stabilizing the Economy:  Besides helping unemployed individuals and families transition from one job to another, unemployment insurance (UI) acts as an economic stabilizer. 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.

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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 - Guarantees that you have the financial capacity to perform the service for which you have been hired. This is common in the construction industry. Contact your insurance agent for information.

Contractors who are unable to obtain a surety bond through an insurance company may qualify for the Small Business Administration's Surety Bond Guarantee Program. For information, visit http://www.mbda.gov/?section_id=3&bucket_id=138&content_id=2277&well=entire_page

Fidelity Bond - Protects the employer against employee dishonesty and theft. This is necessary if your employees perform work in client's homes or businesses. Contact your insurance agent for information on how to obtain a bond.

Health Insurance - Providing health insurance for your employees 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's Web site 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 information, visit http://www.doi.idaho.gov/consumer/empl_maternity.aspx or call the Idaho Department of Insurance at (208) 334-2873, or toll-free 1-888-249-7025 (in Idaho only).

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 page of this Web site 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 created in cooperation with Blue Cross of Idaho and Regence BlueShield. The plan offers savings of up to 22% 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, but the plan 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 to use a National Standard Employer Identification number for electronic claims reporting. The Department of Health and Human Services recommends that businesses use their Federal Employer Identification Number as their health insurance identification number. For information, visit http://www.hhs.gov/news/press/2002pres/hipaa.html.  

For information on how to obtain a Federal EIN, also called a Tax Payer Identification Number, visit the Hot Topics section of this Web site and look for "Tax Payer Identification Number."

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 whether 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.

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 plan. According to the Social Security Administration, a 20 year-old worker has a 30% chance of becoming disabled. Therefore, business owners may want to secure disability coverage for themselves and for key employees, particularly if your business is involved in potentially dangerous activities. 

Disability insurance can be either short term, covering the early stages of a disability, or long-term, covering 5 years or until the person qualifies for Medicare or Social Security disability payments. For information on Social Security disability payments, visit http://www.socialsecurity.gov/multilanguage/10701-EN.pdf. Disability insurance can be obtained from most insurance companies offering health insurance.

Business Liability (Fire and Theft) - Covers stolen or damaged company equipment or assets. This may also be called Property Insurance.

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.

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

Product Liability - Protects against lawsuits for injury or property loss due to a product defect or design flaw. Both manufacturers and retailers may need this insurance.

Professional Liability - Protects professionals and those who have greater than average knowledge in particular areas, such as doctors, lawyers, engineers or counselors, against law suits occurring because of their professional expertise.

Umbrella (Supplemental Liability) - 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 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.

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

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. Also used to fund buy/sell agreements when a business has more than one owner. This may also be available for key employees who are members of the National Guard and could be called to active duty. The business owns the policy and is the beneficiary.

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

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. 

Property Insurance - Protects buildings, property and inventory owned by the business against physical loss or damage by theft, accident, or other occurrences, including property not located at your business location, such as equiment being used at a job site. A policy may cover such additional items as outdoor signs. 

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 contained 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 covered, particularly expensive items. All equipment and stock on the premises should be insured, even if it is not owned by the business.

Business Theft Insurance - Covers theft by employees, competitors, and others, including theft of intellectual property. 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' 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. Businesses that extend credit, banks, medical offices, 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 painting houses, does not occur at your home office. 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 artists, food service, and farms and ranches - http://www.iii.org/smallbusiness/intro/

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.