Utah has one of the most unique, varied landscapes in the U.S.—a feature that helps businesses thrive in diverse sectors including tourism, technology, and cattle ranching.1 And it’s not just major corporations that give Utah one of the most
robust economies in the U.S. Utah’s 250,000+ small businesses helped the state’s economy grow 3.3% in 2016, faster than the average growth rate for U.S. states.2 Yet companies in the Beehive State still encounter the everyday risks of doing
business. From client lawsuits to unexpected property damage, it’s important for entrepreneurs to prepare for a variety of obstacles. We’re here to help you do so. In this guide, we’ll breakdown what types of Utah business insurance are required, as well
as the policies that come highly recommended.

Mandatory business insurance in Utah

The majority of U.S. states require businesses to carry two kinds of insurance, and Utah is no exception. Most businesses must take out the following coverages:

Workers’ compensation insurance Any Utah employer with one or more employees typically needs to take out workers’ comp. Businesses with no employees are exempt, although they may choose to cover contractors in certain cases. In addition, businesses may be exempt from covering agricultural
workers, household workers, real estate brokers, or insurance brokers with workers’ comp.3

Auto liability insurance If you don’t own a vehicle, you’re exempt from taking out auto
liability insurance. Otherwise, you must comply with Utah state minimum auto insurance requirements. If you don’t need these coverages, skip ahead to our section on optional business insurance policies. Otherwise, read on to learn more about how these
kinds of insurance can help safeguard your Utah small business’s success.

Workers’ compensation in Utah

How does workers’ compensation coverage benefit your business? Aside from being legally required if you have one or more employees, workers’ comp can help protect your business from the financial costs that may arise
from an employee’s injury, illness, or disability sustained while on the job. In essence, a workers’ compensation policy creates an agreement between the insurer and the company to provide compensation for workplace injuries and illnesses to an employee.
Workers’ comp can help cover the following kinds of costs:

  • Medical expenses and the cost of treatment
  • Lost wages during the illness or rehabilitation period

If you don’t take out workers’ compensation coverage, it could result in costly lawsuits—not to mention state-mandated fines. The penalties for failing to take out insurance include:4

  • A minimum $1,000 fine
  • A legal injunction that bars you from doing business
  • Loss of state protections that prevent you from facing employee lawsuits

As you can see, workers’ comp is just as vital to your business’s ongoing health as it is to that of your employees.

Utah auto liability insurance

If you drive a car, you need an auto insurance policy. Depending on the type of vehicle, your profession, and how you use your vehicle you still might be covered with your personal auto insurance policy. Let’s use two
examples to help clarify the difference. Molly is a home baker who delivers her creations all over Salt Lake City as she doesn’t have a bakery for clients
to visit. As delivering her delicious treats is a core function of her business and the treats are considered her property, Molly needs a commercial auto policy. Henry is handyman Provo and has a small truck to carry his tools and travel to and from job sites. While he needs to drive to each job, his handyman work is the core function of his business. Additionally, Henry is a one-man handyman who doesn’t
have any crew who he brings to job sites. For Henry, his personal auto policy may very well suffice, but he should check with his personal auto insurance broker to make sure this is the case. If you transport people and property as a key part of your
profession or the vehicle is titled in your business name, most likely you need a commercial auto policy. For this it’s important to understand the minimum requirements for business-owned vehicles in Utah include:5

  • Bodily injury liability – $25,000 (per person)
  • Bodily injury liability – $65,000 (per accident)
  • Property damage liability – $15,000 (per accident)
  • Personal injury protection – $3,000

While not all states require coverages like personal injury protection (PIP), Utah’s relatively high minimums help guarantee that all insured drivers are well-covered for potential accidents. The penalties for inadequate insurance coverage are6:

  • A one-time fine of at least $400 for the first offense
  • A one-time fine of at least $1000 for the second and subsequent offenses

Keep in mind that you may want more than the minimum coverage. After all, if an uninsured driver hits you, they won’t have coverage to help pay for your costs. You may also be wondering if you need to take out a commercial policy if you already have a
personal policy for a car you only occasionally use for work. The best approach is to check with your auto insurer to review your policy to ensure you’re covered and limit your business’s financial risks.

Optional liability insurance for Utah businesses

Besides insurance that is legally mandated, many Utah business owners opt to take out additional liability insurance. Why? Just as your employees may incur an illness or injury while on the job, third
parties including your customers, clients, and bystanders could experience a range of bad circumstances while interacting with your business. Should they sue you, you could face steep costs. As a business owner who invests money into your business equipment,
imagine what would happen if you suddenly did have it available. As a growing business, the last thing you need is any unexpected expense. So, how do you protect your business? There are several kinds of insurance that can help you protect your business’s
financial health. These include: General liability insurance Also called commercial general liability (CGL), this insurance provides coverage for a range of third-party
claims against your business. Depending on your specific policy, general liability coverage can provide investigation, defense, and settlements for damages resulting from claims of:

  • Bodily injury
  • Personal injury
  • Personal and advertising injury

Professional liability insurance This insurance can provide coverage for client claims of financial loss resulting from your negligence or errors. Also called
errors and omissions (E&O) insurance, it can provide defense and settlements for client claims stating that your professional services or failure to provide such services caused their
financial loss. Cyber insurance If you do business online, you may need an additional policy to provide coverage for losses and damages resulting from
a data breach. You may suffer losses yourself, or be responsible for losses to clients. This type of insurance could be invaluable in a digital age. Commercial property insuranceAs you’ve probably noticed, the aforementioned insurance types can help cover clients’ and third parties’ losses—but they do not protect your own physical property or equipment. A commercial property policy can help to protect:

  • Your premises (parking lot, signs, exterior)
  • Your building or office
  • The goods and equipment inside

Depending on the specifics of your policy, commercial property insurance may help cover the cost of repair, replacement, and business interruption. Equipment insuranceChances are, you bring equipment with you on the job, and without specific coverage for it, you’ll be on the hook for replacing your gear if it is damaged or stolen. Another unplanned expense! With equipment insurance your gear is protected. When evaluating
policies make sure you understand exactly what is and what isn’t covered – look for the terms ‘blanket’ and ‘scheduled’ coverage. Most equipment policies are scheduled, which means only the equipment listed is covered.

How to get business insurance in Utah

As a Utah business owner, you’re dedicated to safeguarding your business and supporting your local community. Figuring out your insurance needs helps you do just that. To summarize:

  • It’s important that you take out workers’ compensation insurance if you have any employees, unless you fall under one of the exemptions
  • Auto insurance and depending on what you use your vehicle for, commercial auto insurance
  • Consider general liability insurance, professional liability insurance, and cyber liability insurance for coverage against client and third-party claims
  • Take out commercial property insurance and equipment to cover your property and place of business

When purchasing business insurance, carefully assess your business’s risks to decide which policies fit your needs. Once you’ve assessed your risks, it’s time
to find the right provider. Are you looking for a long term policy or a flexible, on-demand policy to meet your business’s unique needs? Traditionally business insurance is sold annually, but at Thimble we challenged the status quo. We know small businesses
need insurance that works for them, on their schedule. That’s why General Liability and Professional Liability Insurance via Thimble can be purchased by the hour, day, week, or month. We also set out to simplify the insurance process. With Thimble, you
can get insurance coverage in just 60 seconds. All you have to do is:

  • Click “Get a Quote” or download the Thimble mobile app
  • Answer a few quick questions about your business’s location and crew size
  • Select a policy length

From there, we’ll generate an instant insurance quote. Purchase with a final click and your policy and Certificates of Insurance will be waiting
for you in your email inbox. While we don’t offer workers’ comp and auto insurance yet, we’ve got you covered with general and professional liability insurance. It’s insurance that works when your Utah small business does, meaning you never pay more than
you need to. The right insurance doesn’t just protect your business; it gives you the peace of mind you deserve. With the proper safeguards in place, you can pour all your energy into what really matters—growing your Utah venture.

  1. Newsweek. How Utah Became an Economic Zion.
  2. Small Business Association. Utah Small Business Profile
  3. Utah Labor Commission. Workers’ Compensation
  4. Utah Labor Commission. Workers’ Compensation Insurance Information Sheet
  5. Utah Insurance Gov. Motor Vehicle Insurance
  6. Utah DMV. Insurance.