Ohio Business Insurance and Workers’ Comp Requirements

Who Needs Business Insurance in Ohio?

Nearly every business in Ohio can benefit from insurance, regardless of size or industry. With over 989,000 small businesses in the state, business insurance is vital for protecting against customer injuries, property damage, employee accidents, and lawsuits. While some coverages are legally required, others are highly recommended to safeguard your livelihood, assets, and cash flow.

Key points:

• All businesses with employees must carry workers’ compensation insurance.

• Businesses using vehicles for work must have commercial auto insurance.

• Certain professions require specific liability coverage for licensing.

• Even sole proprietors and home-based businesses should consider general liability and property insurance for protection against common risks.

Workers’ Comp: When It’s Required

Ohio law requires workers’ compensation insurance for any business with more than one employee, whether full-time or part-time. This includes corporate officers, household workers (if earning $160+ per quarter), and casual workers. Coverage must be in place from the first date an employee is hired.

Exemptions:

• Sole proprietors without employees

• Partnerships and LLCs with no employees

• Certain family farm corporate offices

• Ministers and domestic workers earning under $160 per quarter

Unique to Ohio:
Workers’ comp must be purchased through the state’s monopolistic fund, not private insurers. Failure to provide coverage can result in severe penalties, including fines, liens, and possible criminal prosecution.

Commercial Auto Insurance Basics

If your Ohio business owns or uses vehicles for work, commercial auto insurance is mandatory. This applies whether the vehicle is registered to your business or is a personal vehicle used for business purposes.

Minimum required coverage in Ohio:

• $25,000 for bodily injury per person

• $50,000 for bodily injury per accident

• $25,000 for property damage per accident

Who needs it?

• Any business using vehicles for deliveries, transporting goods, visiting clients, or carrying tools and equipment.

• Both company-owned and personal vehicles used for business should have commercial coverage, as personal auto policies often exclude business use.

Penalties:
Driving without proper insurance can result in license suspension and fines.

Professional Liability for Certain Jobs

Professional liability insurance (also called Errors & Omissions or E&O) is not required for all businesses, but is mandated or strongly recommended for certain professions in Ohio.

Required for:

• Lawyers: Must carry legal malpractice insurance or provide written disclosure if uninsured.

• Architects, engineers, and design-build firms working with public authorities: Must carry professional liability insurance.

• Home inspectors: Must have general liability coverage of at least $100,000 per occurrence and $300,000 aggregate.

Recommended for:

• Any business providing professional services or advice (consultants, IT, healthcare, real estate, etc.).

• Many clients, contracts, or licensing bodies may require proof of coverage even if not mandated by law.

Is General Liability Insurance Mandatory?

General liability insurance is not required by Ohio law for most businesses, but it is highly recommended and often required by landlords, clients, or for certain professional licenses.

Required for:

• Contractors, electricians, plumbers, HVAC, and home inspectors seeking state licenses.

• Businesses leasing commercial property (landlords may require it).

Recommended for:

• All businesses, to protect against third-party bodily injury, property damage, and advertising injury claims.

• Essential for winning contracts and demonstrating professionalism.

Other Useful Coverages for Businesses

Beyond the basics, Ohio businesses should consider additional insurance to fully protect their operations:

• Business Owner’s Policy (BOP): Bundles general liability and commercial property insurance for cost-effective coverage.

• Commercial Property Insurance: Protects buildings, equipment, and inventory against fire, theft, and disasters.

• Cyber Liability Insurance: Covers data breaches and cyberattacks-crucial for businesses handling sensitive information.

• Inland Marine Insurance: Protects tools and equipment in transit or at job sites.

• Umbrella Insurance: Increases liability limits above other policies for added protection.

• Employer’s Liability Insurance: Can be added to cover lawsuits related to employee injuries not included in Ohio’s state workers’ comp fund.