Business Insurance FAQ

In Massachusetts, if your business has employees, you are required to carry Massachusetts General Laws Chapter 152 workers' compensation insurance.

Other coverages such as general liability, business owners policies (BOPs), professional liability, etc., may not be mandated by law, but they are often required by landlords, lenders or contract partners.

Understanding the legal minimums helps you cover the "must‑haves," while everything else is about smart protection.

Workers' compensation insurance covers medical care, lost wages and disability benefits if an employee is injured or becomes ill because of their job. Massachusetts law states that all employers (with some narrow exemptions) must carry workers' compensation.

Without it, businesses risk fines, stop‐work orders or other penalties.

If you're unsure whether your business qualifies or whether owners/executives must be covered, this is an excellent topic to review with your insurance broker.

A general liability policy (sometimes called commercial general liability) helps protect your business if you're legally responsible for bodily injury or property damage to a third party, or if your advertising causes an injury.

Even though Massachusetts doesn't require every business to carry it, many landlords, clients and contracts will require you to have it. If you work with the public, have a location clients visit or deliver services onsite, this coverage is often essential.

A Business Owners Policy bundles several coverages (typically property insurance + general liability + sometimes business interruption) into a single, more cost‑effective package.

For many small to mid‑sized Massachusetts businesses-especially those renting or owning a location with inventory or customers-it can provide efficient protection. If you're just starting or you operate primarily online with minimal assets, you might consider whether you need all components of a BOP.

If your business owns or leases vehicles, or if vehicles are used regularly for business tasks (deliveries, services off‑site, etc.), a commercial auto insurance policy is required.

Note: A personal auto policy usually won't cover business use (or will exclude claims arising from business operations). So using a vehicle for business without proper coverage can expose your company to significant risk.

Premiums vary widely based on: the type of business, number of employees, location (e.g., Boston vs rural MA), amount of coverage, deductible, claims history, and the specific industry's risk profile.

For example, one source shows that in Massachusetts, small‑business general liability policies might start around $42/month in some cases.

The key: getting quotes and comparing coverages (not just price) is important.

Yes - if you operate a business from a home, your homeowners policy likely does not cover business‑related property, business liability or inventory losses.

You'll want to ask your broker about business property insurance or a separate policy designed for home‑based business operations.

You should review your insurance policy at least annually - and anytime your business:

• adds new employees or hires subcontractors
• acquires new physical assets or moves location
• changes its services, products or revenue model
• leases new space, faces new contractual requirements

These events can change your risk profile and may require higher limits or new coverages.

Yes - here are a few strategies:

• Bundle policies (for example, combine liability + property + business interruption).
• Raise your deductible (which lowers premium but increases your out‑of‑pocket when a claim occurs).
• Improve risk controls (e.g., install alarms, follow safety protocols, train employees which may reduce claims).
• Shop around - get multiple quotes and compare not just cost but what is and isn't covered.

While cost matters, the goal is adequate protection - saving a little but being underinsured is rarely worth the risk.

If a covered event happens (injury, property damage, interruption of business, etc.):

• Notify your insurer or broker as soon as possible.
• Document everything - photos, videos, inventory lists, witness statements if applicable.
• Preserve evidence and mitigate further damage (for example, stop a leak, secure the premises).
• Review your policy to understand your deductible, coverages, exclusions and claim process.
• Work closely with you and the insurance company to ensure that you meet deadlines, submit required documentation and understand your rights. In Massachusetts, insurers must handle claims fairly and timely under state consumer protection laws