From the Kentucky Derby, bourbon, and Louisville Slugger baseball bats, Kentucky is renowned for many things. The Bluegrass State is also home to a thriving small business economy, with 355,998 small businesses operating in the state, accounting for 99.3% of all Kentucky companies.1

So, if you’re planning to start a small business of your own in the Kentucky Commonwealth, it’s important that you prepare for the risks associated with being an owner. That means protecting your venture with mandatory and necessary insurance coverage, both of which can help you preserve your bottom line if an adverse event occurs.

But what kinds of business insurance do you need to operate legally in the state of Kentucky? In this guide, we’ll cover the ins and outs of getting your Kentucky small business the insurance it needs to thrive.

Let’s do this!

Kentucky workers’ comp insurance requirements

The first step to getting adequate coverage is taking out legally required insurance.

Most businesses in Kentucky have to take out workers’ compensation insurance by law. Workers’ comp is designed to provide coverage for work-related incidents that result in employee injury, illness, and disability.

Who’s required to get—and who’s exempt from—workers’ compensation insurance?2

  • Just about any business with one or more employees must take out workers’ compensation insurance.
  • Certain sole proprietorships and single-member LLCs are exempt.
  • Your business may also be exempt if your employees are agricultural workers or household workers (i.e. cleaners and nannies) or if you are a religious organization.

Auto insurance requirements

In addition to workers’ compensation, you may be legally required to have auto liability coverage.

It’s important to know that your personal auto insurance policy can satisfy the requirements depending on how you use your vehicle, the core function of your business, and whether your business owns the vehicle.

If you only use your vehicle to travel to and from work, most likely your personal policy will suffice. However, if you use your vehicle to carry people or products for a fee, commercial auto insurance may be needed. Additionally, if your vehicle is titled in the name of the business, you need commercial auto insurance. And as a reminder, you should always talk with your auto policy provider to ensure you’re fully protected.

Finally, depending on your line of work, your state or municipality may require you to take out other kinds of insurance. Check with your local licensing body to understand your profession’s specific insurance requirements.

General liability insurance in Kentucky

Beyond the insurance that you’re legally responsible for, you may need other coverages to fully protect your small business’s finances and property. Next, we’ll take a look at four types of coverage that can come in handy when accidents strike. First up, general liability.

Most businesses can benefit from general liability insurance, also called commercial general liability insurance (CGL). General liability insurance can help provide coverage in the event that a client or third party (customer, bystander, etc.) experiences an adverse event while interacting with your business.

General liability insurance can provide for the investigation, defense, and settlement of third-party claims for:

  • Bodily injury
  • Property damage
  • Personal and advertising injury

Additionally, here at Thimble, if you opt for a monthly general liability insurance plan, we’ll bundle in business equipment protection, which helps cover your equipment when you’re working. In the insurance world, this is also known as inland marine insurance.

However, it’s important to note that general liability insurance does not cover claims of employee injury. That’s why you need workers’ compensation insurance. Likewise, it does not provide coverage against damage to your own commercial property.

Professional liability insurance

In addition to these kinds of insurance, many businesses can benefit from professional liability insurance. If you give your clients professional advice, you may want or need coverage for client claims arising out of failing to provide appropriate advice.

Should someone sue you, claiming even plain old bad advice led to their financial loss, your professional liability insurance could:

  • Provide legal defense, including the associated costs
  • Pay for damages

Put simply: If you’re a pro, you need professional liability coverage.

Commercial property insurance

Your commercial property means so much more than you might think! It includes:

  • Your premises, including your signs
  • Your building or office
  • The valuable equipment and supplies inside of it

Depending on the specifics of your coverage commercial property insurance can help cover the cost of repairing your property, replacing equipment, or covering your bills during a temporary closure due to perils like:

  • Fire
  • Theft
  • Vandalism
  • Flooding
  • Falling objects
  • Riots

That means you can get back to doing business sooner, without a major blow to your savings.

Cyber insurance

One “error” that your professional liability coverage likely excludes? Losing your clients’ data. Likewise, your commercial property insurance doesn’t usually protect your data.

If you do business online, you likely interact with sensitive data every day. Whether you keep trade secrets on your servers, store customers’ identity or credit card information, or provide virtual services, a data breach could pause your operations and put sensitive information at risk.

Depending on your specific coverage, cyber insurance can provide coverage for:

  • First-party loss – Should a data breach interrupt your business, result in extortion, regulatory fines or require expensive repairs, your insurance could help cover your costs.
  • Third-party loss – Should you face client lawsuits, your coverage could provide defense and help cover damages.

Protect & grow your Bluegrass State small business

As a small business owner, you have enough on your plate without taking lengthy phone calls with prospective insurance providers.

At Thimble, we may make it fast and easy to get the general liability and professional liability coverages you need—all from your computer or phone!

Getting insured takes less than 60 seconds. All you have to do is click “Get a Quote” or download the Thimble mobile app. From there, enter a few details about your business including your ZIP code, crew size, and desired policy term (pay by the hour, day, or month). Select your coverage limits, and we’ll generate an instant quote.

Purchase with a click, and get back to doing what you do best—growing your small business.

To make sure you have adequate coverage:

  • Take out any mandatory insurance that apply to your business, including workers’ compensation and auto insurance
  • Consider supplemental coverages like general liability insurance, professional liability insurance, commercial property insurance, and cyber liability insurance

With your dream team in place, you’ll be ready for whatever comes your way. We’re hoping it’s blue skies (and bluegrass) for miles ahead.


  1. U.S. Small Business Administration. 2020 Small Business Profile Kentucky.
  2. Kentucky Labor Cabinet. An Overview of Workers Compensation.