Arizona Business Insurance Options and Requirements Explained

Arizona requires businesses to have liability insurance to cover damages to others. Arizona law requires businesses to have liability insurance to cover damages to others.

Businesses in Arizona can choose from various types of insurance, including general liability, professional liability, and commercial auto insurance. The type of insurance needed depends on the business and its activities.

Arizona businesses with employees must also have workers' compensation insurance to cover work-related injuries. This insurance is mandatory for most businesses with employees.

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Arizona business owners should consider buying different insurance policies to protect their companies from losses. The recommended insurance coverages include General Liability, which protects against third-party bodily injury and property damage.

If you use your vehicles for business, you need Commercial Auto coverage, which provides liability and physical damage coverage for your work vehicles and trailers. This type of coverage is essential for businesses that make deliveries or travel between job sites.

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Businesses in Arizona are required to have Workers' Compensation insurance if they have employees. This insurance helps pay for expenses related to employees becoming injured or ill while working for you.

A Business Owners Policy (BOP) combines property and liability coverage into one easy-to-manage policy. It's a great option for small to medium-sized businesses that rent or own commercial property.

Professional Liability, also known as Errors and Omissions insurance (E&O), protects businesses from claims of professional negligence. This type of coverage is essential for Arizona businesses that offer professional services.

Cyber Insurance protects against incidents like data breaches and cyber attacks. This type of coverage includes first-party and third-party protection for things like investigative services, data recovery, and legal costs.

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Arizona business insurance requirements are straightforward. The state only requires workers' compensation insurance, which can be obtained through a private insurer or the state's private insurance fund.

Businesses with employees, including minors, migrant workers, and family members, must be covered by a workers' comp policy. Independent contractors, however, may file an exemption and are not required to have coverage.

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While Arizona doesn't legally require businesses to carry other types of insurance, such as general liability or a Business Owner's Policy (BOP), many clients and landlords may specify coverage and limit requirements in their contracts.

A BOP is often the most cost-effective type of commercial insurance for Arizona businesses, bundling commercial property insurance and general liability coverage in one plan.

Here are some common types of insurance policies that are often included in a BOP:

It's worth noting that some businesses may need additional coverage, such as cyber liability insurance, if they process data electronically. This type of insurance can cover the cost of notifying customers in the event of a data breach and may also pay for credit monitoring for those customers.

Workers' compensation insurance is a must-have for Arizona businesses with one or more employees. It covers medical expenses and lost wages for employees injured at work or afflicted with an occupational disease.

The average compensation amount for combined types of injuries is around $41,000 per worker. Workers' comp insurance does not cover an employee injured outside the scope of their work.

Some benefits of workers' compensation insurance include employee rehabilitation and assistance for survivors, as well as coverage for employee medical expenses, disability benefits, and lawsuits from employee injuries.

Here are some key points to keep in mind about workers' compensation insurance in Arizona:

In Arizona, workers' compensation insurance is a must-have for businesses with one or more employees. This type of insurance covers medical expenses and lost wages for employees injured at work or afflicted with an occupational disease.

The average compensation amount for combined types of injuries is around $41,000 per worker. Arizona's workers' compensation laws make for a "no-fault" system, meaning that regardless of whose fault it is, workers are entitled to compensation.

Workers' comp insurance covers a wide range of work-related injuries and illnesses, including those caused by lifting heavy items, falls, cuts, or burns. It also covers employee rehabilitation and assistance for survivors.

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Businesses with one or more employees are required to have workers' compensation insurance. This includes sole proprietors who want to protect themselves from work injury costs that health insurance might deny.

Here are some key benefits of workers' compensation insurance:

Workers' comp covers work-related accidents and injuries, such as repetitive stress injury, and resulting disability. It also covers illnesses caused by or related to employment.

Some coverage exceptions include independent contractors, casual or occasional workers, and domestic workers who are only employed in a home.

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Employment practices liability insurance is a useful policy for employers to have, as it covers the business' legal costs in the event it's accused of wrongful termination, sexual harassment, or discrimination.

This type of insurance gives the business the chance to defend itself against unfair allegations, which is especially important since it's not mandatory for employers.

Employers may want to consider purchasing employment practices liability insurance to protect their business from costly lawsuits and reputational damage.

Unlike workers' compensation, employment practices liability insurance is not a requirement for employers, but it can provide valuable peace of mind and financial protection.

Employers who don't have employment practices liability insurance may be at risk of paying out of pocket for legal fees and damages if they're sued.

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Cyber and Professional Insurance is a must-have for Arizona businesses, especially those that provide professional services. This type of insurance protects against incidents resulting from security breaches or disclosure of data and technology, which can lead to the theft, damage, or misuse of your company's and client's information.

Cyber insurance policies can cover damage remediation, first-party damages (yours), and third-party damages (others). This insurance coverage is also known as cyber risk insurance or cyber security insurance.

Professional liability insurance, also known as errors and omissions insurance (E&O), helps pay for client lawsuits related to mistakes and oversights. It provides an attorney to defend you in client lawsuits alleging your professional negligence, errors, or omissions caused a financial loss.

Here are some examples of what cyber and professional insurance can cover:

Cyber insurance is a type of protection that shields your business from the financial fallout of security breaches or data disclosure. This can lead to theft, damage, or misuse of your company's and clients' information.

Cyber-attacks can cause sudden downtime, system repairs, and expert consulting expenses. In Arizona, businesses can rely on cyber insurance to pay for client notification costs, legal fees, and other related expenses.

Data breach lawsuits can be costly, but cyber insurance can help cover these expenses. Client notification expenses can also be a significant burden, but with cyber insurance, you can avoid shouldering this financial weight.

Some common expenses covered by cyber insurance include:

This insurance coverage is also known as cyber risk insurance or cyber security insurance, and it offers options to cover damage remediation, first-party damages (yours), and third-party damages (others).

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Professional liability insurance is a type of business liability insurance that insures professionals from allegations of negligence or misconduct while performing their services. It's often called errors and omissions (E&O insurance).

Many professional liability insurance policies are written on a claims-made basis, which means claims filed during the policy period must also have occurred during the policy period or after the "claims-made retroactive date". This is important to understand, as gaps in coverage can be costly.

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Professional advisers need professional indemnity coverage because their services can sometimes cause unintentional financial harm to their clients. This can happen even with the best attempts at thorough work ethics.

Professional liability insurance can cover claims related to services rendered in the past (after the retroactive date) but the claim is filed in the current policy term. This provides peace of mind for professionals who want to protect themselves from past mistakes.

In Arizona, professional liability insurance can help if you provide professional services and your advice is alleged to have led to one of your clients suffering a financial loss.

Here are some professions covered in Arizona:

Professional liability insurance can help pay for client lawsuits related to mistakes and oversights, as well as professional negligence lawsuits and late or incomplete work.

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If you drive a car, truck, or van for your business, you're required to have auto liability insurance in Arizona. This type of insurance can protect you and your business from third-party claims resulting from auto accidents.

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Auto liability insurance can cover costs arising out of bodily injury and property damage to other vehicles. This means you'll be protected if someone is injured in an accident or if their car is damaged.

Bodily injury liability insurance covers medical expenses and death benefits, while property damage liability insurance covers the cost to repair or replace the other party's vehicle. You may need a commercial auto insurance policy to secure the appropriate coverage and avoid penalties, depending on the use of your vehicle or how it's registered.

Inland marine insurance is designed to protect your business equipment that's on the go with you. This type of insurance can cover costs associated with accidentally damaged, lost, or stolen equipment that's transported to a job site.

With inland marine insurance, you can protect your business property and equipment worth up to $5,000. This is a no-brainer for businesses that transport valuable tools, materials, or other equipment.

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If you drive a car, truck, or van as part of your business operation, you're required to have auto liability insurance or qualify as a self-insurer. This type of insurance can protect you and your business from third-party claims resulting from auto accidents involving your vehicle.

Your auto bodily injury liability insurance covers the costs arising out of bodily injury, including medical expenses and death benefits, in case you get into an accident and the driver or a passenger of the other vehicle is injured. This coverage is crucial for protecting your business's financial well-being.

In the event of an accident, your auto policy's Property Damage Liability coverage insures the cost to repair or replace the other party's vehicle, if it sustained some damage. This coverage is essential for avoiding costly lawsuits and penalties.

Depending on the use of your vehicle, you may need a commercial auto insurance policy to secure the appropriate coverage and vehicle registration, and avoid penalties. This type of policy is usually required if your vehicle is registered or titled under your business name.

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Inland marine insurance is designed to protect your business equipment, covering costs associated with accidentally damaged, lost or stolen equipment that's on the go with you.

Having inland marine insurance is a no-brainer, especially if you have expensive equipment that you transport to job sites.

It protects your business by covering costs associated with accidentally damaged, lost or stolen equipment.

At Thimble, we offer inland marine insurance, or Business Equipment Protection as we call it, with coverage for up to $5,000 worth of business property and equipment.

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