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Liability insurance for small businesses in the Beehive State
With more than 277,000 small businesses, Utah is home to a powerful force of entrepreneurs who make up 99.3% of all businesses in the state. Together, these businesses employ nearly 558,000 people, or 46.3% of the state's private workforce. And this number is growing. In 2015, small businesses created nearly 30,000 net jobs in Virginia, with firms employing fewer than 20 employees leading the way. In 2016, the number of small business owners increased by 2.6%.
All of the growth comes courtesy of a friendly environment for business owners. Utah has a flat 5% personal and corporate tax rate which is one of the lowest in the nation. The state continually evaluates and eliminates unnecessary regulations—nearly 2,000 since the state conducted a thorough regulation review in 2011. State programs like Business Expansion and Retention (BEAR) grants aid to small businesses in rural regions, while the Utah Science, Technology and Research (USTAR) initiative helps start-up and early-stage tech companies.
While there are numerous opportunities for small business owners in Utah, employee lawsuits are also on the rise. Fortunately, business owners can take steps to protect themselves through comprehensive insurance policies.
Top insurance covered industries in Utah
A wide range of industries can find small business insurance coverage through Hiscox, where an in-depth knowledge of many different fields allows for custom-tailored insurance policies that address the specific needs and risks of each business. Some of Hiscox's most commonly insured small business owners in Utah include handypersons, accountants, landscaping and gardening providers, photographers and IT consultants.
A handyperson in Utah may put their skills to work everywhere, from other businesses’ storefronts to private homes or prestigious corporate offices. Because handypersons work directly with other people's personal property every day, they have a heightened liability risk that can benefit from custom, comprehensive small business insurance, both for their own protection and as an incentive for prospective clients.
Typically, a handyperson will want the protection of general liability insurance, which offers numerous must-have benefits. Because it protects against bodily injury, the handyperson's business will be protected if, for example, an elderly client trips over the handyperson's toolbox, falls, and breaks a hip; the policy will cover the costs of the client's medical care. Because it protects against property damage, it will cover the costs of any items that may be broken if, for example, an employee knocks over a ladder and breaks a window. And because it protects against personal injury, the business will be protected if, for example, an employee on his lunch break is overheard gossiping about a client in a false and unflattering way and the client subsequently hears about the discussion and sues for slander. In those cases, the policy will cover the resulting claim and pay for a defense attorney, as necessary.
Whether they specialize in private clients or in business accounting, accountants in Utah handle sensitive financial data every day—and they can have a huge impact on their clients' financial wellbeing. Fortunately, mitigating the risk associated with an accountant's work can be as simple as securing a comprehensive insurance policy.
Most accountants will choose the protection of professional liability insurance, which is also known as errors and omissions insurance. This policy would protect an accountant even in cases in which they haven't made a mistake. For example, suppose an accountant makes a recommendation to improve a business's finances, but the client ignores that recommendation suffers a business loss, and then blames the accountant for not making the recommendation clearer. An errors and omissions policy could cover the account in this case.
General liability insurance, which protects against claims of bodily injury or property damage, would also protect an accountant if, for example, a client slips and falls in the accountant's office. And a business owner's policy (BOP), which combines general liability insurance and business property insurance, would cover damage to the accountant's property, such as if the office is burglarized or if computer equipment is damaged in a fire.
Landscapers and gardeners
A landscaper or gardener in Utah may operate heavy equipment around homes, handle harsh chemicals, and use sharp tools near clients. These everyday activities bring a heightened risk of bodily injury and property damage that expose lawncare professionals to potential liability, whether their clients are primarily residential homeowners, business operators, or both. For these reasons, Hiscox provides custom insurance that can meet the specific needs of each Utah landscaper or gardener.
General liability insurance is one of the most important types of insurance for a landscaping or gardening business to have. It protects against bodily injury, so if a client trips over a lawn care professional's tools and dislocates a knee, the policy will cover the costs of the client's medical care. It also protects against property damage, so if an employee accidentally breaks a customer's window while working in the garden, the policy will cover the costs of replacing the glass. And because it protects against personal injury, the business owner will be protected if an employee is overheard making disparaging comments about a client and the client hears about the gossip and sues for slander. The general liability policy would cover the claim and appoint a defense attorney, as necessary.
Whether they shoot for corporate clients, personal portraits, news publications or other Utah customers, photographers have to navigate challenging environments, interact with clients, and get the perfect shot—all while managing and maintaining their valuable equipment.
Photographers can help protect their businesses against heightened risks like these through professional liability insurance coverage, also called errors and omissions insurance, which covers claims against businesses that provide professional services. These claims might arise, for example, if a difficult client is dissatisfied with a photographer's shots or if a faulty hard drive prevents a photographer from delivering the shots they promised.
General liability insurance, which protects against claims of bodily injury or property damage by a third party, is another means of protection. A photographer might face claims like these if a client trips over a tripod or a lighting stand, sprains an ankle, and sues to cover associated medical costs, or if the photographer's assistant is heard gossiping about a client, who later hears about the incident and files a libel or defamation lawsuit.
In addition, a business owner's policy (BOP), which combines general liability insurance with business property insurance, can protect the investment that a photographer makes into their equipment. For example, if a photographer's camera bag falls out of their car and onto the concrete, damaging a lens and a portable hard drive, a Hiscox business owner's policy could provide coverage for the damaged equipment and help cover the cost of recovering the data.
The many businesses that are headquartered in Salt Lake City and beyond create numerous opportunities for Utah's IT consultants, whose work with delicate personal and business information—as well as high-end, high-tech equipment—brings a consistent level of risk.
Because IT consultants can have a huge impact on a client's business, they can benefit from professional liability insurance, which is also known as errors and omissions insurance. This policy would protect an IT consultant if, for example, the consultant reviews a client's website and network security in order to implement new security procedures and, a month later, the client's website gets hacked and they lose revenue because the site is down. Even if the IT consultant hasn't made a mistake, the client might still make a claim of faulty work against them, which can damage a business's reputation and cost them money.
General liability insurance, which protects against claims of bodily injury or property damage, would also protect an IT consultant if, for example, an IT consultant is working on fixing a client’s laptop and drops the laptop which is now unfixable. A business owner's policy (BOP), which combines general liability insurance and business property insurance, would cover damage to the IT consultant's property or equipment, such as if a laptop gets stolen, a server is damaged during a power surge, or an office catches fire.
More professions we insure in Utah
Utah Small Business Insurance
As small business insurance specialists we understand that every business is different, which is why we don’t offer one-size-fits-all solutions. We customize our small business insurance in Utah to the specific risks you face, ensuring you get the right coverage at the right price.
General liability insurance, known as Commercial General Liability (CGL), protects your business from another person or business’s claims of bodily injury, associated medical costs, and damage to property. Some examples of what could be covered are below:
- Bodily injury: A draftsman was visiting a job site to make last minute adjustments to his drawings. He left his laptop bag on the floor and one of the workers tripped over it, sustaining injuries that required a trip to the emergency room and stitches. General liability insurance could protect draftsmen against third-party claims of bodily injury, associated medical costs and property damage.
- Personal injury: A management consultant was discussing a former client with another consultant, and said some untrue things. The conversation was overheard and got back to the former client, who sued the consultant for slander. General liability insurance could protect management consultants against third-party claims of bodily injury, associated medical costs and property damage.
- Property damage: A massage therapist is visiting a client’s home for an in-home massage and accidentally knocks over an expensive vase, breaking it. General liability insurance could protect massage therapists against third-party claims of property, bodily injury and related medical costs.
Learn more about general liability insurance costs for your business.
Professional liability insurance, also known as errors and omissions insurance (E&O insurance), covers another person’s claims against businesses that provide professional and personal services. Some examples of what could be covered include:
- Negligence: A parent hired a substance abuse counselor for her son. After a few sessions, the son tells his parents that the treatment is working. A month later, however, the son is arrested for a DUI. The parents are irate and sue the counselor for negligence. Professional liability could protect substance abuse, mental health, and marriage and family counselors against claims of negligence even if they haven’t made a mistake.
- Loss of revenue: A public relations consultant issued a press release announcing the launch of a new ecommerce web site. The release contained a typographical error in the address of the site, so when people tried to access the site by typing in the URL, they were directed to another site. The client sued the consultant for the revenue lost due to the incorrect address. Professional liability insurance could protect public relations consultants against claims of negligence and will appoint an attorney to defend them, if needed, even if they haven’t made a mistake.
Learn more about professional liability insurance.
Key Utah laws and conditions driving increased business liability rates
Across the country, all employers with at least 15 employees must guarantee freedom from discrimination based on race, color, national origin, sex, religion and disability. Employers with at least 20 employees must guarantee freedom from age discrimination, and employers with at least four employees must guarantee freedom from discrimination based on citizenship status.
The state of Utah also requires that employers with 15 or more employees guarantee freedom from discrimination based on sexual orientation, gender identity, HIV or AIDS status, and genetic information.
Like most states, Utah is an "at-will" employment state, meaning that employment can be terminated at any time for any reason. But fired employees can still sue for breach of contract if their employment contract promises job security, and Utah recognizes implied employment contracts based on oral promises, statements in an employee handbook or employer conduct that creates an impression of job security.
These regulations all work together to protect Utah's workforce, but they also allow for potential wrongful termination or discriminatory hiring lawsuits. And employment discrimination complaints are on the rise in Utah: In 2017, the Utah Antidiscrimination and Labor Division filed 1,831 charges of discrimination against Utah employers—a third again as many charges as were filed in 2016. And these charges represent just a fraction of the number of employees who complained to the agency; an audit released in January 2017 estimated that charges were filed in just 0.7% of state discrimination cases.
With employee lawsuits on the rise, smart small businesses in Utah are protecting themselves with comprehensive insurance coverage.
Utah workers compensation laws
According to the National Federation of Independent Businesses, all employers in Utah are required to carry workers compensation insurance for employees, including directors, officers and LLC members. There are exceptions for sole proprietors, partners and LLC members, who can choose to exclude themselves. In addition, employers of agricultural laborers, casual or domestic workers, and real estate brokers are excluded from workers compensation requirements. However, general contractors must ensure that their subcontractors (including sole proprietors, partners and corporate officers) carry workers compensation insurance.
Businesses may purchase an insurance policy through a provider like Hiscox or through Utah's state-administered Workers Compensation Fund, which must provide coverage for any Utah employer. Businesses may also obtain permission to "self-insure" from the state's Industrial Accidents Division. Requirements for self-insuring are stringent and include being in business for at least five years and having a net worth of at least $10 million.
Consequences for failing to obtain workers compensation insurance can be severe and include penalties of at least $1,000 and stop-work injunctions. Lack of coverage also opens the business up to civil lawsuits from injured workers. As the state Labor Commission puts it, "It is much less expensive to obtain workers compensation coverage than to try to go without it."
How can Hiscox help your Utah business?
At Hiscox, you'll never be offered a one-size-fits-all insurance policy. We work with each individual client to ensure that their coverage—whether it's general or professional liability insurance, a business owner's policy, workers compensation and more—meets their specific business's and industry's needs. We also offer a range of benefits:
- Flexible payment options. Our monthly payment schedule, with no added fees, can help manage a small business's cash flow.
- Tailored insurance. With Hiscox, you'll never pay for coverage you don't need.
- Claims responsiveness. When a covered claim is reported, Hiscox will immediately assign a dedicated claims representative to assist you.
- Worldwide coverage. An Utah business insured through Hiscox is covered for work done anywhere in the world, as long as the claim is filed in the U.S., a U.S. Territory or Canada.
Get a fast, free quote now, and get Hiscox in your Utah business's corner. If you have questions, you can call us at 1-866-283-7545 and speak with a Hiscox licensed agent, Monday – Friday, 7am – 10pm ET.
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This information is provided to assist you in understanding the coverage we offer and does not modify the terms and conditions of any insurance policy, nor does it imply that any claim is covered. Coverage is subject to underwriting and may not be available in all states.
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