Woman smiling and leaning over computer.
Small Business Insurance
Find the best rates from top U.S. insurance companies. Start saving today.
Get advice tailored for tech entrepreneurs.
24 hrs
Access proof of insurance anytime.
Share this article via facebookShare this article via twitterShare this article via LinkedInShare this article via email

Is business insurance required by law?

Insurance requirements for small businesses vary from state to state. Find out what business insurance is required by law in your state, and make sure that you, your tech business, and your employees are protected.

Small business insurance requirements

When you own a small tech company, it’s important to have several different kinds of insurance in place. Not only is it a good idea to protect your business, your property, and your employees, but it also may be required by law.

When it comes to having the right coverage, you must first understand the legal requirements. If you don’t secure adequate insurance coverage, you may not be allowed to launch a new tech business at all. In addition, once your IT business is up and running, failure to comply with your state’s laws can result in significant fines and penalties.

What business insurance is required by law?

Most states require businesses with employees to have workers’ compensation insurance. Workers’ comp helps cover medical expenses and lost wages resulting from work-related injuries.

Typically, workers' comp is required as soon as your tech business hires its first employee. Texas is the only state where workers’ compensation is optional for businesses. 

If your business owns and operates vehicles, you probably must also have commercial auto insurance. Commercial auto insurance can help cover medical costs and property damage if your tech company’s vehicle is involved in an accident. 

State laws determine how much commercial auto insurance coverage your business must purchase. All states except for New Hampshire and Virginia require small businesses with vehicles to purchase commercial auto coverage.

Depending on your state, other types of business insurance may also be required. Check with your TechInsurance agent and your state’s department of insurance to find out if you are in compliance with local regulations.

Compare small business insurance quotes for your tech company

Is general liability insurance required by law?

In most cases, general liability insurance is optional. However, some clients will require you to carry this policy before they will work with you. And if you rent an office space, many property owners will require you to obtain general liability insurance prior to signing a lease.

Most IT business owners choose to carry general liability insurance regardless of the business insurance requirements in their state. It’s usually the first policy an IT professional buys when starting a business.

General liability insurance helps cover the most common lawsuits. It provides protection when someone outside your company sues over bodily injury, property damage, or advertising injury.

Get free quotes and compare policies with TechInsurance

TechInsurance helps IT and tech business owners compare business insurance quotes with one easy online application. Start an application today to find the right policy at the most affordable price for your business.

350,000+ small businesses protected
Save money by comparing insurance quotes from multiple providers.
Not a tech business? We have you covered.
Powered by Insureon.
Learn More
Topics