Best Small Business Insurance in Ohio

Ohio Insurance Requirements

The State of Ohio requires that every business operating within the state that employs one or more full-time or part-time employees must carry workers' compensation insurance. 

Commercial auto insurance is also required by law for any business whose employees use corporate vehicles as part of their jobs.

Workers’ Compensation Insurance

Workers’ compensation in Ohio is managed by the Ohio Bureau of Workers’ Compensation (BWC). Ohio is one of only four states where the state manages workers’ compensation insurance rather than private insurance agencies.

Ohio law governing workers’ compensation can be found in Chapter 4123 of the Ohio Revised Code. Ohio Revised Code Section 4123.35 requires that all employers with one or more full- or part-time employees provide worker’s compensation insurance:

ORC 4123.35

(A) Except as otherwise provided in this section, for a policy year commencing on or after July 1, 2015, every private employer and every publicly owned utility shall pay annually in the month of June immediately preceding the policy year into the state insurance fund the amount of estimated annual premium the administrator fixes for the employment or occupation of the employer, the amount of which estimated premium to be paid by each employer to be determined by the classifications, rules, and rates made and published by the administrator. The employer shall pay a further sum of money into the state insurance fund as may be ascertained to be due from the employer by applying the rules of the administrator. Upon receipt of the payroll report required by division (B) of section 4123.26 of the Revised Code, the administrator shall adjust the premium and assessments charged to each employer for the difference between estimated gross payrolls and actual gross payrolls, and any balance due to the administrator shall be immediately paid by the employer. Any balance due the employer shall be credited to the employer's account.

For a policy year commencing on or after July 1, 2015, each employer that is recognized by the administrator as a professional employer organization or alternate employer organization shall pay monthly into the state insurance fund the amount of premium the administrator fixes for the employer for the prior month based on the actual payroll of the employer reported pursuant to division (C) of section 4123.26 of the Revised Code.

ORC 4123.01

Ohio law also requires that employers post notice of their workers’ compensation insurance according to Section 4123.83:

ORC 4123.83 

Each employer paying premiums into the state insurance fund or electing directly to pay compensation to the employer's injured employees or the dependents of the employer's killed employees as provided in section 4123.35 of the Revised Code, shall post conspicuously in the employer's place or places of employment notices, which shall be furnished at least annually by the bureau of workers' compensation.  The notice shall state that it is proof of workers' compensation coverage, or that the employer has complied with section 4123.35 of the Revised Code and has been authorized by the administrator of workers' compensation directly to compensate employees or dependents, and the date of the authorization.  The notice shall indicate that coverage is contingent on continued payment of premiums and assessments due.  The notice, when posted, constitutes sufficient notice to the employer's employees of the fact that the employer carries workers' compensation coverage or that the employer has complied with the elective provisions of section 4123.35 of the Revised Code.

In addition, the law sets provisions for penalties and fines by businesses that fail to pay into the workers’ compensation program:

ORC 4123.50 

(A) Each member of a firm, and the president, secretary, general manager, or managing agent of each private corporation, including any public service corporation mentioned in section 4123.01 of the Revised Code or publicly owned utility, shall cause the firm or corporation to comply with section 4123.35 of the Revised Code and, for self-insuring employers, to comply with the assessment based upon paid compensation provisions of this chapter and Chapter 4121. of the Revised Code. No person mentioned in section 4123.01 of the Revised Code and no member of the firms and no officer of the corporations or publicly owned utilities referred to in this section shall fail to comply with section 4123.35 of the Revised Code and, for self-insuring employers, to comply with the assessment based upon paid compensation provisions of this chapter and Chapter 4121. of the Revised Code. All fines collected for a violation of this section shall be paid to the general fund of the political subdivision where the case is prosecuted.

(B) The administrator of workers' compensation, with the advice and consent of the bureau of workers' compensation board of directors, shall adopt rules governing treatment of employers found in violation of division (A) of this section. The rules shall cover enforcement and prosecution procedures and methods and grounds for settlement of liability of a noncomplying employer.

Commercial Auto Insurance

The State of Ohio also requires any business whose employees use corporate vehicles as part of their jobs to carry commercial auto insurance. According to the Ohio Department of Insurance, it is against the law to drive a car without insurance or other proof of financial responsibility. It is also against the law for a car owner to permit a driver to use their vehicle without proof of financial responsibility.

Section 4709 of the Ohio Revised Code governs the financial responsibility of owning and operating an automobile and sets penalties for failure to maintain proof of financial responsibility. This is laid out in ORC Section 4709:101.

ORC 4709:101 

(A)(1) No person shall operate, or permit the operation of, a motor vehicle in this state, unless proof of financial responsibility is maintained continuously throughout the registration period with respect to that vehicle, or, in the case of a driver who is not the owner, with respect to that driver's operation of that vehicle. 

According to Ohio Administrative Code Rule 4501:1, proof of financial responsibility may be provided in one of the following ways:

OAC 4501:1 

(A) Except as provided in paragraph (C) of this rule, proof of financial responsibility may be shown by any of the following:

(1) A policy of liability insurance, the declaration page of a policy of liability insurance, or a liability bond, if the policy or bond complies with section 4509.20 or sections 4509.49 to 4509.61 of the Revised Code;

(2) A financial responsibility identification card issued in compliance with rule 4501:1-2-02 of the Administrative Code;

(B) In all instances, proof of financial responsibility may be shown by:

(1) A bond issued in compliance with section 4509.59 of the Revised Code and rule 4501:1-2-03 of the Administrative Code;

(2) A certificate issued by the registrar of motor vehicles for the deposit of money or securities in compliance with section 4509.62 of the Revised Code and rule 4501:1-2-04 of the Administrative Code.

(3) A certificate of self-insurance issued by the registrar pursuant to section 4509.72 of the Revised Code and rule 4501:1-2-05 of the Administrative Code; or

(4) A uniform financial responsibility form, SR-22.

Data Breach Insurance

Ohio’s Data Breach Notification Statute places a duty on businesses to notify residents if their personal information has been compromised. This is laid out in Section 1349.19 of the Ohio Revised Code:

ORC 1349.19

Any person that owns or licenses computerized data that includes personal information shall disclose any breach of the security of the system, following its discovery or notification of the breach of the security of the system, to any resident of this state whose personal information was, or reasonably is believed to have been, accessed and acquired by an unauthorized person if the access and acquisition by the unauthorized person causes or reasonably is believed will cause a material risk of identity theft or other fraud to the resident.

The obligation to notify affected residents in the event of a data breach raises the possibility that they may take legal action against the business whose systems were breached. Accordingly, Ohio businesses should consider taking out data breach insurance to cushion the effects of being sued if that eventuality transpires.  

Ohio Insurance Resources

Ohio Bureau of Motor Vehicles
Ohio Bureau of Workers’ Compensation 
Ohio Department of Insurance
Ohio Bureau of Workers’ Compensation - Workers’ Compensation Overview
Ohio Department of Insurance - Guide to Auto Insurance
Ohio Department of Insurance - Minimum Coverage Requirements for Auto Insurance

General Liability Insurance

The vast majority of Ohio 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

Ohio requires businesses with any full-time or part-time employees to carry workers’ compensation 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 Ohio 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.