If you own a business in Mississippi there are a few state regulations you need to meet. You must pay business taxes, and this applies whether you have hundreds or only a couple of employees.
When it comes to business insurance in Mississippi, the requirements can vary. The type of insurance, and if it’s a legal requirement, often depends on the size of your business. Whether you’re a longtime business owner or just getting started, here’s what you should know about business insurance and Mississippi law.
What are the Insurance Requirements for Mississippi Business Owners
Mississippi requires most businesses to carry insurance; the only exception applies to small businesses with less than five employees.
If your workforce consists of farm laborers or domestic workers, you’re also exempt from state business insurance regulations. Non-profits, cultural, and religious organizations are also exempt from carrying business insurance.
If none of the above applies to your business, you must carry at least workers’ compensation insurance. This is both a state and federal requirement. What is workers’ compensation insurance? The federally supported insurance covers employees if they’re injured on the job.
The insurance pays most or all medical expenses, along with lost wages. In other words, if your injuries prevent you from returning to work the insurance covers your missing pay.
While some businesses stop with workers’ compensation insurance, some choose to extend their coverage. This isn’t a state requirement but it does give businesses owners and their employees added protection.
Types of Insurance Available for Mississippi Business Owners
Workers’ compensation only covers employees who are injured on the job, and the insurance has strict limits on what it covers and this often leaves gaps in coverage. To ensure everyone, including the business, is adequately protected, most owners choose to purchase additional coverage outside of the state’s requirements.
So, what are some of the other types of business insurance? Here’s a look at some of the common types of insurance for small and large businesses.
General Liability Insurance
General or commercial liability insurance is something you probably want to consider. The insurance covers your business from injury and property damage claims.
For example, if a customer slips on a wet floor and files a personal injury claim your general liability insurance covers the damages. The insurance can also cover the cost of an attorney if the claim ends up going to civil court.
While some large corporations can handle paying out a personal injury claim, it can bankrupt a small business. Did you know this type of insurance even protects you from personal and advertising injury claims?
While advertising injury claims aren’t common, they can still occur. You may mistakenly infringe on someone’s copyright in an advertising campaign. Instead of paying for the damages out of pocket, the insurance handles the claim.
Property Insurance
Property insurance does exactly what the name implies: the policy covers most damages to your business property. But there is an exception—property insurance doesn’t cover flood damage, this is a separate policy that’s often a rider on your business owner’s insurance.
Property damage can include both manmade and natural disasters. If your roof is blown off in a hurricane, your building is covered. This type of insurance can also cover damages to employees’ and customers’ property. A box can fall off a pallet or forklift, hitting and damaging a customer’s vehicle. Your property insurance will handle the costs of the repairs.
Business Owner’s Insurance
Okay, so you already know a little bit about general liability and property insurance. Business owners’ insurance combines these two policies into one. If you’re considering getting both types of coverage, it often makes more financial sense to get business owner’s insurance. Usually, premiums are a little lower when you combine two policies.
Some of the protections included in a business owner’s policy (BOP) are fire and burglary coverage. If a customer files an injury claim, your BOP policy kicks in. The policy also covers your inventory, along with both personal and customer data.
A benefit of BOP is it’s easy to customer the insurance to meet your business needs. You can add coverage as needed like data breach insurance. If your business needs more than one type of insurance, BOP is usually the most cost-effective option.
Data Breach Insurance
If your business deals with customer information, even if it’s only through a point of sale (POS) service, data breach insurance is something to consider. What is data breach or cyber liability insurance? The policy helps cover the costs associated with a data breach.
This can include legal fees, public relations solutions, and covering the costs of identity theft protection for affected customers. The insurance can also help your business prepare for a data breach. In other words, your business will have protocols and practices in place that meet industry standards if a cyber attack occurs. The insurance can help you respond quickly in the event of a cybersecurity breach to help you minimize any damage.
Other Types of Insurance to Consider for Your Mississippi Business
While the above-mentioned types of business insurance are the most common, there are some others you may want to take a look at. Flood insurance is something most Mississippi businesses should consider carrying.
Remember, your property insurance policy covers pretty much everything except for flooding. From heavy spring and summer rains to hurricanes, flooding is common across the state. Repairing the damage after a flood is often expensive. Flood insurance can help mitigate some or all of the costs.
If you have company vehicles or even if employees use their personal rides for business, you’ll need to carry commercial auto insurance. Why? Most personal auto insurance policies don’t cover commercial vehicles, and this applies even if the employee owns the vehicle and has it insured in their name.
If the employee is in an accident and you don’t have commercial auto insurance, it’s similar to not having any coverage.
Protect Your Business with the Right Type of Insurance
Don’t rely on luck or simply hope for the best when dealing with potential incidents in your business. Having the right type of business insurance allows you to operate with peace of mind, knowing that your assets and operations are protected.
This type of proactive approach actively ensures that you’re well-prepared and secure against unforeseen challenges.