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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:
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.
 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 you ,
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.
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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
- 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.
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