Best Small Business Insurance in Arkansas

Arkansas Insurance Requirements

Arkansas state law mandates that all motor vehicle owners, including business enterprises, have their vehicles covered by either a certificate of self-insurance or by an insurance policy issued by a carrier licensed to do business in the state. In addition, businesses with employees may be compelled under state law to have workers’ compensation insurance.

Commercial Auto Insurance

The State of Arkansas requires businesses that own motor vehicles to insure those vehicles under an automotive liability policy. The policy must provide for minimum compensation of $25,000 in the case of personal injury or death, with minimum compensation of $50,000 for any one particular accident and a minimum of $25,000 for property damage.

27-22-104(a)(1)

Insurance Required

It is unlawful for a person to operate a motor vehicle within this state unless the motor vehicle and the person's operation of the motor vehicle are each covered by:

(A) A certificate of self-insurance … or

(B) An insurance policy issued by an insurance company authorized to do business in this state.

27-22-104(b)

Minimum Coverage

The policy shall provide at a minimum the following coverage:

(1) Not less than twenty-five thousand dollars ($25,000) for bodily injury or death of one (1) person in any one (1) accident;

(2) Not less than fifty thousand dollars ($50,000) for bodily injury or death of two (2) or more persons in any one (1) accident; and

(3) If the accident results in damage to or destruction of property, not less than twenty-five thousand dollars ($25,000) for the damage to or destruction of property of others in any one (1) accident.

Workers’ Compensation Insurance

Arkansas law also prescribes that employers will be liable for any injury to an employee sustained on the job or the employee’s death while they are in the course of employment. Liability requires the employer to pay compensation to the worker or his estate. The employer can procure an insurance policy to ensure funds are available to cover potential obligations to provide compensation.

§ 11-9-401(a)(1)

Employer’s Liability for Compensation

Every employer should secure compensation to its employees and pay or provide compensation for their disability or death from compensable injury arising out of and in the course of employment without regard to fault as a cause of the injury.

§ 11-9-404(a)

Security for Compensation

Every employer shall secure the payment of compensation under this chapter:

(1) By insuring and keeping insured the payment of the compensation with any carrier authorized to write workers' compensation insurance;

(2) By furnishing satisfactory proof to the Workers' Compensation Commission of the employer's financial ability to pay compensation and receiving an authorization from the commission to pay compensation directly.

Data Breach Insurance

The Arkansas Personal Information Protection Act became law in 2005 and was amended in 2019 to require that a data breach be reported to the Arkansas Attorney General if the breach affects the personal information of more than 1,000 individuals. The Act originally obliged businesses and other entities to notify an individual if their personal information had been hacked. The law makes it clear that even a suspicion that information has been compromised will trigger the requirement to notify the individual.

Disclosure of security breaches

Any person or business that acquires, owns, or licenses computerized data that includes personal information shall disclose any breach of the security of the system following discovery or notification of the breach of the security of the system to any resident of Arkansas whose unencrypted personal information was, or is reasonably believed to have been, acquired by an unauthorized person.

Arkansas Insurance Resources

Arkansas Workers’ Compensation Commission 
Workers’ Compensation - Application for Certificate of Non-Coverage
Arkansas Department of Motor Vehicles
Arkansas Insurance Department
Arkansas State Business Services

General Liability Insurance

The vast majority of Arkansas companies purchase general liability insurance from an insurance company even though it is not legally required. This type of business liability insurance covers third-party bodily injury, third-party property damage, advertising liability, libel, slander, copyright issue, and other common claims faced by companies across various industries. 

General liability insurance is one of the most important types of business insurance your company can purchase.

Business Owner’s Policy

A business owner’s policy (BOP) is an affordable way to bundle business insurance coverages. This type of policy includes commercial general liability insurance with commercial business property insurance. Many small business owners with a physical business space opt for this coverage.

Commercial Auto Insurance

You need to carry commercial auto insurance if your company uses vehicles to transport people or goods. This type of insurance is very similar to personal auto insurance and covers liability, medical costs, collisions, and uninsured/underinsured motorists. A commercial auto policy also covers vehicles rented or owned by your company and employees who use their own vehicles for company business.

Workers’ Compensation Insurance

In general, Arkansas requires businesses with three or more employees to carry workers’ compensation insurance. However, the threshold is two or more if the employees are engaged in building or building repair work or just one employee if that employee works for a contractor who subcontracts any part of his contract. Businesses that are subcontractors must have workers’ comp even if they have only one employee.

Nevertheless, it’s a good idea to subscribe to such insurance. Taking out workers' compensation insurance puts a limit on the amount and type of compensation that an injured employee may receive. The limits are set by law.

Employee Health/Life/Disability Insurance

Companies that provide health, life, and/or disability insurance as a fringe benefit will need appropriate Arkansas insurance. Under the Affordable Care Act, firms with more than 50 full-time employees must offer health insurance or pay an expensive penalty.

Professional Liability Insurance

Professional liability insurance covers financial risks to attorneys, accountants, and other people who provide professional services or expertise. Professional liability coverage varies depending on the industry but usually includes negligence, legal defense, slander or libel, and copyright and trademark disputes. 

Professional liability insurance includes errors and omissions (E&O) insurance.

Data Breach Insurance

If your company hosts customers’ personal information on its servers and those servers are hacked, lawsuits and damages can result. Data breach insurance protects you in these cases. 

Cyber Liability Insurance

Similar to but more comprehensive than data breach insurance, cyber liability insurance may pay for legal expenses related to a data breach or set up a call center for individuals affected by a breach. It also may pay for active protection against cyberattacks.

Commercial Crime Insurance

Crimes like extortion, forgery, burglary, computer fraud, and embezzlement are covered by commercial crime insurance. Situations in which this type of insurance is particularly useful include dishonest or libelous acts by employees.

Fiduciary Liability Insurance

Fiduciaries, who are legally required to act in plan participants’ best interests rather than the company’s when choosing advisors and investments, should consider this type of insurance coverage. It covers them if they are sued for allegedly providing negligent investment advice or administering plans or benefits incorrectly. 

Third parties like out-of-company consultants and benefit plan administrators are usually not protected.

Directors and Officers Insurance

Any company with directors and officers should consider directors and officers (D&O) insurance coverage, a type of liability insurance that reimburses directors and officers for claims made against them regarding harm allegedly caused by their management decisions.

Executive Risk Coverage

Executive risk insurance is business liability insurance that provides coverage for fraud, D&O, employment practices, initial public offerings, pension funds, extortion, and professional negligence.