Best Small Business Insurance in Virginia

Virginia Insurance Requirements

Businesses in the Commonwealth of Virginia are required to have workers’ compensation insurance (if they have three or more employees) and commercial auto insurance (if they have vehicles they use for business-related activities).

Commercial Auto Insurance

If you are operating a business in Virginia that owns vehicles, those vehicles must carry auto liability insurance. The policy should provide minimum coverage of 25-50-20 to demonstrate adequate financial capability to pay compensation for personal injury or for damage to property. Financial capability can also be satisfied by executing a bond, depositing money or securities with Commonwealth authorities, or obtaining self-insurance approval. 

46.2-435: Proof of financial responsibility to be furnished for each vehicle

Proof of financial responsibility … shall be furnished for each motor vehicle registered by the person required to furnish such proof.

46.2-436: Methods of proving financial responsibility

Proof of financial responsibility … may be given by proof that:

1. A policy or policies of motor vehicle liability insurance have been obtained and are in full force;

2. A bond has been duly executed;

3. A deposit has been made of money or securities; or

4. A self-insurance certificate has been filed, all as provided in this chapter.

46.2-472: Coverage of owner's policy

(3) Every motor vehicle owner's policy shall … insure the insured or other person against loss from any liability imposed by law for damages, including damages for care and loss of services, because of bodily injury to or death of any person, and injury to or destruction of property caused by accident and arising out of the ownership, use, or operation of such motor vehicle or motor vehicles within the Commonwealth, any other state in the United States, or Canada, subject to a limit … with respect to each motor vehicle, of $25,000 because of bodily injury to or death of one person in any one accident and, subject to the limit for one person, to a limit of $50,000 because of bodily injury to or death of two or more persons in any one accident, and to a limit of $20,000 because of injury to or destruction of property of others in any one accident.

Workers’ Compensation Insurance

Virginia law requires an employer to carry insurance in order to be able to compensate employees if they are injured during the course of employment or their estate if they die. An employer can also obtain approval to self-insure or secure the financial capability to pay such compensation in other ways approved by the Commonwealth. 

The law only requires employers that have three or more workers to carry workers’ comp insurance, but there’s good reason to do so even with just one worker. Employers with workers’ comp generally cannot be sued in open court for on-the-job injuries or death. 

65.2-800: Duty to insure payment of compensation; effect of insurance

(A) Every employer … shall insure the payment of compensation to his employees … While such insurance remains in force he or those conducting his business shall only be liable to an employee for personal injury or death by accident to the extent and in the manner herein specified.

65.2-801: Insurance or proof of financial ability to pay required

(A) Every employer subject to this [law] shall secure his liability thereunder by one of the following methods:

1. Insuring and keeping insured his liability in an insurer authorized to transact the business of workers' compensation insurance in this Commonwealth;

2. Receiving a certificate … from the Workers' Compensation Commission authorizing such employer to be an individual self-insurer.

65.2-101: Meaning of employee in this law

(2)(h) “Employee" shall not mean … employees of any person, firm or private corporation … that has regularly in service less than three employees in the same business within this Commonwealth, unless such employees and their employers voluntarily elect to be bound by this [law].

Data Breach Insurance

Virginia’s data breach notification law places an obligation on a business to inform any resident whose personal information may be at risk because of a data breach. 

The obligation to notify individuals that their personal information has been compromised raises the prospect of numerous lawsuits alleging negligence. To defend such tortious claims can be costly. Virginia businesses that carry data breach insurance would find, however, that they are able to tap funds to put up a defense or pay compensation.  

8.2-186.6: Breach of personal information notification

(B) If unencrypted or unredacted personal information was or is reasonably believed to have been accessed and acquired by an unauthorized person and causes, or the individual or entity reasonably believes has caused or will cause, identity theft or another fraud to any resident of the Commonwealth, an individual or entity that 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 affected resident of the Commonwealth without unreasonable delay.

Virginia Insurance Resources

Virginia Workers’ Compensation Commission - FAQs Employers Insurance
Virginia Workers Compensation Commission
Virginia DMV - Insurance Requirements
Small Business Association - Virginia District
Virginia State Corporation Commission

General Liability Insurance

The vast majority of Virginia 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

Virginia requires businesses with three or more workers to carry workers’ compensation insurance. Nevertheless, it’s a good idea to subscribe to such insurance, even where there is only one employee. 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 Virginia 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.