Arizona business insurance requirements

Although there are only two types of liability insurance in Arizona that are mandated, we suggest you strongly consider purchasing the following plans:

Property Insurance

Do you own or rent a building? Does the business hold expensive inventory or equipment? If so, property insurance protects your tools, equipment, furniture and documents from:

• Theft
• Vandalism Smoke damage
• Fires

That said, if you fear other large natural disasters like floods or earthquakes, you’ll have to purchase an additional policy to take care of those.

Cyber Liability Insurance

These days, the lifeblood of any business is its cyber presence. From data storage to communication, everything runs through the company’s computers and servers. As a result, such items are extremely vulnerable to cyber-attacks. And, if a hacker is successful, that could result in costly data breaches, viruses, and reputational damage, or even cause the business to temporarily shut down. A cyber liability insurance policy would safeguard your business by covering the following possibilities:

• Legal fees
• Settlements
• Judgments
• Fraud monitoring costs
• Alerting clients to breaches and fraud
• Hiring a PR team
• Ransomware payments
• Business interruptions

Home-Based Business Insurance Policy

Many small businesses are first launched from a home or garage. Unfortunately, many owners don’t realize until too late that their homeowners’ policy doesn’t include the business. As a result, if a fire or some other disaster happens, all of their inventory and equipment could be lost without any financial recourse. A home-based business insurance policy acts quite similarly to a commercial property insurance policy, because if an accident happened as a result of your business operations in your home, it likely wouldn’t be covered under your homeowners insurance.

General Liability Insurance

General liability insurance is a must-have for any business owner in Arizona. This liability policy protects you from various liability claims tied to negligence allegations resulting from defective products or third-party damages such as property or bodily injury. This type of claim would pay for the following:

• Property damage
• Bodily injury
• Medical bills
• Reputational harm
• Hiring a legal team

But why does it matter? Picture this situation.

A plumber is called in by a client to fix a leak. During the course of his work, a pipe bursts, causing the entire home to flood. Now, the client wants to take you to court for property damages. A general liability insurance policy would be able to cover both the cost of the damages as well as your general counsel’s legal fees. Without it, you’d be handed the financial responsibility of paying tens of thousands of dollars to fix the problem.

Professional Liability Insurance

Professional liability insurance, also known as errors and omissions (E&O) insurance, covers defense and damages “caused by” bad advice or expertise. Far too many Arizona businesses make the grave error of thinking their general liability insurance policy covers these issues. However, if you’re considered a professional, you’ll need (E&O). But which jobs are classified as professional and require a business owner’s policy? These include but aren’t limited to:

• Graphic Designers
• Photographers
• Videographers
• Beauticians Writers
• Aerobics Instructors
• Actors

Consider what would happen if an aerobics instructor led a class to perform a type of movement, only for one of the students to break their foot in the process. Now this student can no longer go to her shifts as a production assistant, which means she’s losing money. She then decides to sue the aerobics instructor for negligence, claiming that she should’ve never recommended such a move to a novice. A professional liability insurance policy could help protect the aerobics instructor from the fees that come with this claim, even if it was a total accident.