Virginia Business Insurance and Workers’ Comp Requirements

Who Needs Business Insurance in Virginia?

While Virginia does not require all businesses to carry general liability insurance by law, several types of insurance are mandatory based on business operations.

You likely need business insurance in Virginia if:

• You have employees

• You operate vehicles for business purposes

• You offer professional services or consulting

• You rent or own a commercial property

• You are signing leases or contracts that require proof of insurance

Even when not legally required, business insurance provides essential protection against lawsuits, property loss, and other costly risks.

Workers’ Comp: When It’s Required

In Virginia, workers’ compensation insurance is required if you:

• Regularly employ two or more employees (full-time, part-time, seasonal, or family members).

Key facts:

• Sole proprietors with no employees are exempt.

• If you hire subcontractors, they may count toward your employee total for workers’ comp requirements.

• Coverage must be purchased from a private insurance carrier or through self-insurance (if qualified).

Workers’ compensation insurance covers medical bills, lost wages, and rehabilitation expenses for employees who suffer job-related injuries or illnesses.
Failing to carry workers’ comp can lead to fines of up to $250 per day, capped at $50,000.

Commercial Auto Insurance Basics

If your business owns vehicles or uses them for work, commercial auto insurance is required by Virginia law.

Minimum commercial auto coverage requirements:

• $30,000 bodily injury per person

• $60,000 bodily injury per accident

• $20,000 property damage

Important:
Personal auto policies do not cover vehicles used for business purposes. Businesses should also consider Hired and Non-Owned Auto Insurance (HNOA) if employees use personal vehicles for business tasks.

Professional Liability for Certain Jobs

Professional liability insurance (also called Errors and Omissions insurance) is not required by Virginia state law for all businesses.
However, it is often required by industry regulations, licensing boards, or client contracts, especially for:

• Lawyers and law firms

• Real estate agents and brokers

• Healthcare providers (separate malpractice insurance)

• Accountants and CPAs

• Architects and engineers

• Consultants and IT professionals

Professional liability insurance protects your business against claims of negligence, errors, or failure to deliver services properly — even if claims are baseless.

Is General Liability Insurance Mandatory?

General liability insurance is not required statewide in Virginia, but it is strongly recommended and often becomes mandatory through contracts or leasing agreements.

You may be required to carry general liability insurance if:

• You rent commercial space

• You apply for certain professional or contractor licenses

• You work with municipalities, government contracts, or large corporations

• You provide services directly to customers

General liability insurance covers third-party bodily injury, property damage, personal injury (libel/slander), and associated legal defense costs.

Other Useful Coverages for Virginia Businesses

Beyond the basics, many Virginia businesses can benefit from additional protections:

• Commercial Property Insurance: Covers your building, inventory, and equipment against fire, theft, vandalism, and some weather events.

• Business Owner’s Policy (BOP): Bundles general liability and commercial property insurance into a single, cost-effective policy for small to mid-sized businesses.

• Cyber Liability Insurance: Essential for businesses that store customer data, manage online transactions, or are vulnerable to data breaches.

• Employment Practices Liability Insurance (EPLI): Protects against lawsuits filed by employees alleging discrimination, harassment, wrongful termination, and more.

• Flood Insurance: Important for businesses near rivers, the coast, or other flood-prone areas (standard property policies typically exclude flood coverage).

• Product Liability Insurance: Important for manufacturers, retailers, and distributors facing risk from defective products.