Business Insurance in North Carolina in 2024: A Complete Guide

Business insurance is essential for protecting your company from various risks. In North Carolina, small businesses make up 98% of the economy, employing 46% of the state’s workforce. As a business owner, it’s crucial to understand the different types of coverage that can safeguard your assets. Here’s a breakdown of the key types of business insurance available in North Carolina in 2024.

Types of Business Insurance for North Carolina Businesses

Liability Insurance

Every business faces risks, whether from property damage or injury claims. Liability insurance helps cover claims related to reputation damage, bodily injury, and property damage caused by your business. In North Carolina, it’s vital to consider this insurance, especially when a customer can file lawsuits. Liability coverage is included in a Business Owner’s Policy (BOP), which bundles liability and property insurance. This option saves money while providing broad protection.

Business Owner’s Policy (BOP)

This policy combines property and liability insurance into one convenient package. It covers damage from fire, vandalism, or other incidents. A BOP also includes business income insurance, which compensates for lost revenue when operations halt due to a covered loss. You can tailor this policy to meet your specific needs by adding coverage options like data breach insurance.
Example incidents covered by a BOP:

Damage or theft of business inventory, furniture, or equipment.
Lawsuits resulting from customer injuries or reputation damage claims.

A BOP suits businesses that:

Have physical locations such as offices or stores.
Hold inventory that can be stolen or damaged.
Face risks of lawsuits due to customer injuries.

Commercial Flood Insurance

Flood damage can devastate a business. Even in areas with low flood risks, unexpected weather events can occur. Commercial flood insurance helps protect your business from flood-related damage to walls, furniture, inventory, and more. It’s especially useful if:

Your business is in a region with heavy rainfall or fast-melting snow.
Municipal drains in your area may clog, causing unexpected flooding.

Workers’ Compensation Insurance

North Carolina law requires businesses with three or more employees to have workers’ compensation insurance. It covers medical expenses, lost wages, and other benefits for employees injured on the job. The law also applies to businesses using radiation in their operations. Without this insurance, businesses risk significant fines, criminal charges, or even imprisonment.
Workers’ compensation can cover:

Medical care for an employee who trips over office furniture and needs treatment.
Ongoing physical therapy after an employee suffers a back injury lifting heavy items.
Compensation for families when an employee suffers a fatal workplace injury.

Special Insurance Policies for North Carolina Businesses

In addition to basic coverage, consider these insurance types for specific needs:

Insurance Type	What It Covers
Automobile Insurance	Protects company-owned vehicles in case of accidents, damage, or theft.
Fire and Extended Coverage	Covers fire-related damage and other specified risks like lightning, explosion, or vandalism.
Business Interruption	Provides income replacement when your business can’t operate due to property damage or other covered events.
General Liability	Offers protection from claims related to bodily injury, property damage, and personal injury.
Bonds	Protects your business from financial loss due to contract breaches, employee dishonesty, or failure to meet obligations.
Excess and Umbrella	Provides additional liability coverage when claims exceed the limits of your standard policy.
Flood and Earthquake	Covers property and equipment damage from natural disasters, not typically included in standard policies.
Inland Marine	Protects products, materials, and equipment while transported overland or temporarily stored by a third party.
Package Policies	Combines several types of coverage into one policy, offering convenience and potential cost savings.

Why Consider a Business Owner’s Policy

A Business Owner’s Policy (BOP) is one of the most practical and cost-effective options for North Carolina businesses. It offers robust protection and can be customized for specific industries. Here’s why it’s beneficial:

Comprehensive Protection: Covers major risks like property damage and liability claims.
Saves Money: Bundles essential insurance policies into one, reducing premium costs.
Customizable: Add-ons such as data breach insurance ensure your business is fully protected against modern threats.

Workers’ Compensation Requirements in North Carolina

Workers’ compensation insurance is mandatory for businesses with three or more employees, including corporations and partnerships. This policy covers medical care, lost wages, and other benefits for employees injured while performing their job duties. Failure to have this insurance can result in fines, criminal charges, or even imprisonment.

Important requirements:

Mandatory for Radiation Work: Businesses using radiation must carry workers’ comp regardless of employee count.
Liability for Subcontractors: If your subcontractor doesn’t have workers’ compensation insurance, you may be held liable for their employees’ work-related injuries.

Types of Business Insurance in North Carolina

Insurance Type	Description	Who Needs It?
Liability Insurance	Covers claims related to bodily injury, property damage, or reputation damage.	Businesses with customer interactions, high risk of lawsuits, or those providing services/products.
Business Owner’s Policy	Bundles property and liability coverage. Also includes business income insurance to cover lost revenue.	Small to mid-sized businesses that own property, hold inventory, or face potential lawsuits.
Commercial Auto Insurance	Covers vehicles used for business purposes in case of accidents, theft, or damage.	Businesses that use vehicles for deliveries, employee transportation, or client visits.
Commercial Flood Insurance	Protects against damage from flooding, covering walls, furniture, inventory, etc.	Businesses located in areas prone to floods or with significant risk of water damage.
Excess and Umbrella Insurance	Extends the coverage limits of standard liability policies for large claims.	Businesses are exposed to high liability risks or are facing potential lawsuits with significant financial impact.
Professional Liability Insurance	Covers claims of negligence, errors, or omissions in professional services.	Service-based businesses such as consulting, accounting, legal firms, or healthcare providers.
Inland Marine Insurance	Protects goods, equipment, or materials transported overland or temporarily stored off-site.	Businesses that transport goods or own portable equipment used in off-site locations.
Cyber Liability Insurance	Covers data breaches and cyberattacks, including customer data protection and legal costs.	Businesses that store sensitive customer data or conduct operations online.
Workers’ Compensation	Provides medical benefits and wage replacement for employees injured on the job.	Required for businesses with three or more employees.

North Carolina Workers’ Compensation Insurance Requirements

Category	Requirement	Penalty for Non-Compliance
Number of Employees	Businesses with 3+ employees must carry workers’ compensation insurance.	Fines, criminal charges (misdemeanor or felony), and potential imprisonment.
Radiation Workers	Companies working with radiation must have coverage regardless of the number of employees.	Risk of significant penalties and legal issues.
Subcontractors	If subcontractors lack workers’ compensation, the hiring business is liable for injuries.	Financial responsibility for the subcontractor’s injured workers.
Employee Benefits	Medical care, lost wages, and compensation for permanent injury or death are provided through this coverage.	Financial and medical support to employees and their families.

Business Insurance Based on Industry

Industry	Recommended Insurance Types	Reason for Coverage
Retail	Business Owner’s Policy, Liability Insurance, Workers’ Compensation	High risk of customer claims and property damage, especially in physical storefronts.
Construction	Workers’ Compensation, General Liability, Inland Marine Insurance, Equipment Breakdown	Risk of employee injuries, transportation of materials, and equipment failure.
Healthcare & Medical	Professional Liability, Cyber Liability, General Liability	Protection from malpractice lawsuits and sensitive data breaches.
Technology & IT	Cyber Liability, Professional Liability, Business Owner’s Policy	Safeguarding against data breaches, client lawsuits, and business interruption due to cyberattacks or technology failures.
Hospitality (Hotels/Restaurants)	Business Owner’s Policy, Liability Insurance, Workers’ Compensation, Commercial Auto Insurance	Protection against customer injuries, property damage, employee accidents, and vehicle use for deliveries or transportation.
Real Estate	Professional Liability, General Liability, Business Owner’s Policy	Protection from negligence claims, injury lawsuits, and potential property damage during operations.

Conclusion

Business insurance is a must-have for companies in North Carolina, whether you’re a small startup or a well-established enterprise. Choosing the right policies will help protect your assets, employees, and financial future. Liability insurance, Business Owner’s Policies, and workers’ compensation insurance are key coverages that can shield your business from various risks.

Here’s a final piece of advice: Talk to a professional insurance agent to tailor the best package for your specific business needs. With the right protection in place, you can focus on growing your business without worrying about unexpected setbacks.