Ohio business insurance requirements

Before starting your business in Ohio, make sure you're covered with the right types of business insurance. Use this guide to find out what's required and what's recommended.

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Whether you live in the Buckeye State already or you’re planning on moving there, the great state of Ohio is an excellent place if you’re a business owner. Given the financial booms from 2014-2016 and onward—with the return of LeBron James to Cleveland and the ascension of the Cavaliers to the NBA championship—there’s never been a better time to start up and grow a business in Ohio.

As with anywhere in the US, one of the main steps toward getting your business up and running is securing insurance coverage. Like many business regulations and practices, insurance laws vary by state. The kind of coverages required, minimums and limits, and all other matters of your insurance policies depend on not just federal laws but state mandates.

This guide will walk you through what business insurance looks like in Ohio, and what’s legally required for you to take out. Let’s do this.

Required Ohio business insurance

In Ohio, all insurance is governed by the Ohio Department of Insurance (ODI), which ensures fairness for consumers and healthy competition for insurance providers (through regulation and education). It also facilitates licensing for agents and companies, as well as shopping for insurance for policy seekers.

For business insurance in particular, there are two major insurance requirements the ODI oversees for all businesses in Ohio:

  • Workers compensation insurance
  • Commercial auto insurance

In addition to the two required types of business insurance, it’s recommended that you also have a general liability and/or professional liability policy.

Workers' compensation insurance

Ohio’s laws regarding workers compensation insurance are unique among all 50 states. Ohio workers’ compensation insurance runs through a monopolistic state fund. It’s not just overseen but also provided by a single state department, the Ohio Bureau of Workers’ Compensation (BWC), rather than by private insurance companies.

Here’s an overview as to how Ohio’s workers’ compensation insurance works.

Requirements – The specific requirements for who must carry workers’ compensation insurance include: Every business with any number of employees (even just one) must have workers’ compensation insurance, with a few exceptions:

  • Domestic workers who earn less than $160 per quarter are not required to be covered.
  • Volunteers aren’t considered employees and don’t need to be covered.
  • Sole proprietors or partners must cover all employees, but do not need to cover themselves as owners of a business.

Payment – The BWC sets up premiums and payment schedules for each employer:

  • Information about work conducted and payroll determine rates NCCI codes determine individual employees’ risk
  • Estimated rates are about $0.75 per $100 in covered payroll
  • Employers pay the BWC directly

Enforcement – Failure to pay or report on payroll accurately and timely can result in fees and fines, including but not limited to:

  • Late fees for premiums: flat fee of $30, plus up to 15% of premium Late fees for payroll
  • reports: 1% of premium, minimum $3, maximum $15
  • Reimbursement for claims covered during lapses of paid coverage

Aside from workers’ compensation insurance, the other major requirement in Ohio that every business owner must follow is commercial auto insurance.

Commercial auto insurance

In addition to workers’ compensation insurance, commercial auto insurance is also required in Ohio. The state’s specific requirements for commercial auto insurance and for all business-owned vehicles and include:

Minimum coverages of:

  • $25,000 for bodily injury, per person
  • $25,000 for property damage, per accident
  • $50,000 thousand for bodily injury, per accident

And, while it’s not required to include vehicles you or others own personally in your business insurance coverage, personal auto insurance policies often exclude business use from their coverage.

So, you should consider adding a policy such as hired and non owned auto insurance.

Beyond what’s legally required in Ohio or any state, there are also other liability gaps to consider covering,

Recommended business insurance in Ohio

Beyond federal and state requirements governing insurance in Ohio, there are other kinds of protection that businesses should have in order to ensure their financial safety. For most businesses, these include either or both of:
  • General liability insurance
  • Professional liability insurance

Specialty coverages

Some other types of insurance you might consider, depending on the nature of your business, include:

  • Commercial property insurance for your office, store, etc.
  • Inland marine insurance for your equipment, stored goods, etc.
  • Cyber liability insurance for various kinds of online risks.

Between these specialty coverages, general and professional liability, and the business insurance Ohio requires, you’re well protected from a wide variety of risks.

General liability insurance 101

Also referred to as commercial general liability insurance (CGL), general liability offers protection against many general risks a business faces every day. These pertain to the clients and third parties the business interacts with (customers, passerbys, etc).

If a third party is injured or otherwise harmed in the course of your interaction, and they sue you, general liability coverage is there to protect you from:

  • Third party claims of bodily injury or personal injury
  • Third-party claims of advertising injury
  • Third-party claims of property damage
  • Medical costs incurred
  • Legal defense fees
  • Settlements and jury award payments

Now, if someone sues you about the specific work and a mistake that caused financial loss, you need professional liability insurance.

Professional liability insurance 101

Sometimes called an errors and omissions (E&O) policy, professional liability insurance protects you from claims about the work you perform for a client or customer. In particular, it protects you when you are sued on the basis of:

  • Missing, late, or incomplete work
  • Flawed work or malpractice
  • Resulting financial impacts your client wants reimbursed

Essentially, if your client ever states that your services or advice caused them financial loss, they can sue on the grounds of professional negligence. Without a professional liability insurance policy, you’re left to cover the costs of your legal defense (even if you’re not guilty).

How to get Ohio business insurance

While you’ll have to get your workers’ compensation from the BWC, at Thimble our mission is to simplify and revolutionize insurance coverage for every small business owner.

Our business insurance works when you do. You can tailor your plan to the needs of your Ohio business. This means you can choose an insurance policy that goes by the hour, day, or month, protecting your business exactly when you need it and never spending a dime when you’re off the clock.

And, our liability policies are quick and easy to purchase. Answer three quick questions, and you can be covered in under 60 seconds.

Remember, there are two main requirements for insurance in Ohio. If you have at least one employee, you’ll need a workers’ compensation policy. If your business owns a vehicle, you’ll need commercial auto insurance.

Other than those two types of policies, the insurance you integrate should be aimed at protecting the various risks your Ohio business faces when operating, dealing with clients, and providing its services.

If you’re ready to minimize your business’ risk and find a reliable insurance solution for your company, Thimble can help.

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.

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