You’ve probably heard the saying “America runs on Dunkin’.” But have you heard the increasingly popular adage, “Louisiana runs on small businesses”? No? Well, you’re about to.
Okay, so it doesn’t have the same ring to it, but that doesn’t make it any less true.
The “Pelican State” is chock-full of beautiful lagoons and lakes, rich culture and festivities, unique wildlife and biomes, and of course… certain business prerequisites.
We’re here to walk you through exactly what type of Louisiana business liability insurance you need (legally, and for your own peace of mind). So scoop yourself a big bowl of homestyle shrimp gumbo and sit tight—we’re navigating the swampy marshes of Louisiana liability insurance.
Louisiana business insurance requirements
Seriously, Louisiana is big on small businesses. They employ almost a million hard-working Louisianans and make up 99.5% of all Louisiana businesses.1 These companies are defined broadly as employing less than 500 people, but the requirements can differ by industry.2
With so many small businesses in Louisiana, it’s important to know what’s expected of you. In terms of business liability insurance, Louisiana has two mandatory types:3
- Workers’ compensation insurance for any company with any employees
- Auto liability insurance for all vehicles owned and operated by the business
Let’s dive into what these are and how to get them.
Louisiana workers’ compensation insurance
Your employees are trusted members of your team. Whether you have one part-time worker or several hundred full-time salaried employees, you’ll need to prepare for the possibility that something happens to them on the job.
Workers’ comp laws are in place for the protection of the employee, granting them certain benefits after sustaining an illness or injury at work. Depending on the circumstance, they might be entitled to:4
- Payment of medical bills
- Financial recuperation of lost wages
- Vocational rehabilitation (VR) which can help disabled workers secure job
- placement, retraining, or assistance
- Death benefits
Without workers’ compensation insurance, these expenses would be your responsibility, and paying out of (your business’s) pocket could seriously harm your bottom line.
Clearly, this is not the kind of stressor you need on top of running a successful business operation. As an employer, you have two options:
Purchase workers’ compensation insurance from an authorized insurance company in Louisiana, or
Request approval to act as a self-insurer after completing all of the necessary paperwork and meeting the financial requirements
Auto insurance in Louisiana
If workers’ compensation protects you against costs for accidents at a job site, think of auto liability insurance as protection for accidents to and from the job—or anywhere on the road, really.
Most likely, you use a small car, van, or truck for business purposes, so you may not also need commercial auto insurance. (Just like insurance, keeping things confusing.) Let’s break it down.
You’ll need commercial auto insurance if you use a vehicle under any of the following circumstances:5
- You deliver products to customers, such as delivering pizzas or flowers.
- You drive as part of the services you offer, such as towing vehicles or boats, or picking up and dropping off passengers.
- You transport freight, like big box trucks with heavy cargo.
- The vehicle is owned by the business.
If you only use your vehicle to travel to and from job sites or your place of business and don’t meet any of the above requirements, your personal auto policy may be enough. Let’s look at some examples.
George is a New Orleans tour guide who meets clients on Bourbon street and all over NOLA. He only does walking tours around the city and uses his car to travel to and from meeting spots. As George doesn’t transport people or products, his personal auto policy is likely all he needs for auto insurance.
Olivia is a local crafter and jewelry maker. She sells her work at local art fairs, farmers markets, and in some local stores. She uses her small van to regularly deliver her work to the customers after purchase and to bring new stock to the stores. As such, Olivia’s personal auto policy may not protect her products while in transit, so she would need commercial auto insurance.
We always recommend talking with your auto coverage provider to ensure you have the appropriate coverage.
Other types of business insurance
There are a few additional types of coverage that every Louisiana business owner should invest in, even if it’s not mandated by law. These include:
- General liability insurance
- Professional liability insurance
- Inland marine insurance (aka equipment insurance)
- Commercial property insurance, including coverage for damage by flood
General liability insurance in Louisiana
It’s never a bad idea to protect your business against risks. General liability insurance isn’t required in the Pelican State, but this type of coverage provides investigation, defense, and settlement for third-party claims related to:
- Property damage
- Bodily injury
- Personal and advertising injury
If a third party, such as a customer, client, or bystander, slips and falls on your recently-mopped floor, or you accidentally damage someone’s home during an on-site repair, your general liability coverage can help protect you.
Note: This doesn’t apply to injuries sustained by your own employees (that’s what workers’ compensation is for) or damage to your own equipment (that would require inland marine insurance which is more simply known as Business Equipment Protection).
Professional liability insurance in Louisiana
Professional liability insurance helps protect you in the case that a client claims your advice (or lack thereof) resulted in their financial loss. Freelancers, photographers, and consultants are just a few professions who can benefit from professional liability insurance.
Also known as errors and omissions insurance, professional liability provides:
- Costs for damages because of actual or alleged negligence – Investigates claims that you were negligent in completing your work, acting unprofessionally, or missing key due dates and then settles any claims as necessary
- Legal defense – When clients take you to court over your failure to deliver or improper professional advice
Whether or not you’re ever actually negligent in the professional services you offer, it can help to have coverage that protects you no matter the verdict.
Commercial property insurance, including flood
Commercial property risks include things like damage by winds, fire and theft. Top of mind for many Louisianans, though, are losses caused by floods. Louisiana recently experienced one of the worst national disasters in history—it’s no surprise that home and business owners alike are looking to protect themselves and their assets from future property losses, like flooding incidents. Commercial flood insurance might even be required for business owners who:
- Operate in high-risk areas, such as nationally recognized flood zones
- Possess a mortgage from a federally-regulated or insured lender
Any Louisianan can (and should) consider investing in flood insurance. In fact, the entire state of Louisiana is characterized as a flood zone. Low-risk small businesses might even be able to find lower premiums because they’re less likely to experience costly damage.
Even someone who is not interested in flood insurance should still consider the value of commercial property insurance for other first-party property losses.
How to get Louisiana business insurance
Knowing what you need is the first step, but actually getting it is another undertaking altogether.
We know insurance is no walk in the park (or wade through the swamp, if we’re in the Bayou State). That’s why our mission is to help you understand what insurance coverage you need and make it easy—and fast—to get covered. We believe that small business insurance, specifically general liability and professional liability coverage should be flexible, affordable, and work on your schedule.
All you have to do is answer a few quick questions and choose between monthly, weekly, daily, and even hourly coverage. No matter your hours of operation or client schedule, Thimble has you covered. It’s insurance that works when you do.
When it comes to the legally required business insurance in Louisiana, there’s:
- Workers’ compensation coverage
- Auto liability insurance
And when it comes to getting business liability insurance in Louisiana, we’ve got you covered (literally).
- U.S. Small Business Administration. 2019 Small Business Profile: Louisiana.
- ASQ. What is a Small Business?
- Louisiana Department of Insurance. Small Business Insurance.
- Louisiana Workforce Commission. Frequently Asked Questions From Employees and Employers about Rights and Responsibilities in Workers’ Compensation.
- American Insurance Brokers, Inc. Your Guide to Coverages for Commercial Auto Insurance in Louisiana.
- CNN. Louisiana flood: Worst US disaster since Hurricane Sandy, Red Cross says.
- Nationwide. Understanding your commercial flood coverage options.
- Louisiana Flood Insurance. Louisiana Flood Insurance.
Our editorial content is intended for informational purposes only and is not written by a licensed insurance agent. Terms and conditions for rate and coverage may vary by class of business and state.