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Insurance


All businesses need insurance, but how much and what type depends on your business activities. Many types of insurance are available; some are required by law and others are optional. Unless otherwise noted, most insurance can be obtained from an insurance company specializing in business insurance.

For information about a specific type of insurance, choose from the following:

Required Insurance 

Businesses with employees must have workers comp and unemployment insurance (actually a tax).

Workers Compensation Insurance

All businesses having employees must carry worker’s compensation insurance, administered by the Idaho Industrial Commission unless specifically exempt. Workers comp insurance can be obtained in four ways:

  • Private Insurance Company – contact an insurance agent.
  • State Insurance Fund
  • Assigned Risk Pool – Employers considered to be high risk and unable to secure coverage from private insurance companies or the State Insurance Fund can apply for coverage through the assigned risk pool, administered by the National Council on Compensation Insurance (NCCI). For information, contact your insurance agent, call NCCI at 1-800-622-4123, or click the link above.
  • Self-insurance – Available only to Idaho employers with large payrolls who are able to meet specific requirements. Approval to self-insure must be obtained from the Idaho Industrial Commission. See a list of Industrial Commission offices.

Exemptions: A few types of employment are exempt from Workers Compensation coverage. See Workers Compensation Exemptions. Employers must display a poster provided by their insurance company indicating the business has workers comp insurance.

Out-of-state employers: Out-of-state employers having employees working in Idaho for up to 6 months can secure an “extraterritorial certificate” of coverage from their home state. Out-of-state employers having an employee who lives and works in Idaho more than 6 months must carry workers comp insurance issued by an approved company. This includes employees who telecommute from their homes full time, part time, seasonally and occasionally. Contact your nearest Industrial Commission office for details.

Workers Comp Fraud: If you suspect an employee may be committing fraud, report the issue to your insurance company or the Idaho Industrial Commission. For information on workers comp fraud and how to minimize occurrences or detect it, click here

Unemployment Insurance – State and Federal

Businesses having employees working in Idaho (including out of state businesses) are required to pay unemployment insurance tax, a tax (not insurance) paid only by the employer. State unemployment taxes are administered by the Idaho Department of Labor. The Internal Revenue Service administers the federal unemployment tax. For information, visit the Taxes section of this website.

Unemployment Fraud: If you suspect someone is fraudulently obtaining unemployment benefits, contact the Idaho Department of Labor.

Note: Corporation owners and officers who are also shareholders and who engage in the routine operations of the business must establish an unemployment Insurance tax account. They need to report a fair market wage before taking distributions or dividends that are not taxable as wages. Many new corporation owners do not realize that they, themselves, are considered employees even if they are the only person working in the business. All corporations whose owners/officers provide services must open an unemployment insurance tax account with Idaho Department of Labor and either report wages or opt out as a corporate officer. For details, contact your nearest Department of Labor office.

Optional Insurance 

You may need one or more of the following insurance products, depending on your specific business activity. Your insurance agent or professional association can provide information.

Bonds

Surety Bond

A form of insurance guaranteeing that a business has the ability to complete the project for which it was hired. Also known as a performance bond, this is common in the construction industry. Contact your insurance agent for information. Businesses that are unable to obtain a bond through an insurance or surety company may qualify for the Small Business Administration’s (SBA) Surety Bond Guarantee Program. The SBA also guarantees contract bonds which ensure that the terms of a specific contract are fulfilled.

Fidelity Bond

A type of insurance that protects employers against intentional employee dishonesty, theft, negligence, fraud or embezzlement. Two types of bonds are available. A blanket bond covers all employees of a business, such as a bank or investment company. Specialty fidelity bonds cover specific individuals named in the bond. Your liability insurance, not a bond, should cover unintentional damage or breakage caused by an employee.

Businesses that regularly use independent contractors can purchase a third-party fidelity bond to protect against intentional wrongful acts committed by independent contractors. Fidelity bonds are purchased from insurance companies.

Federal Bonding Program: At-risk job applicants who are not eligible for commercial bonding can be covered for up to six months through this program administered by the Idaho Department of Labor.

Health

Health Insurance

Companies having 50 or more employees are required by law to provide health insurance under the Employer Shared Responsibility provisions of the Affordable Care Act. To find a list of companies approved to sell health insurance plans to Idaho businesses and individuals, see Idaho Department of Insurance.

Dependent Children: If you have employees who pay court-ordered child support, you may be required to enroll their dependent children in your company’s health insurance program. For information, visit the Employer Issues section of this website and look for “Child Support Payroll Deductions.”

Chamber of Commerce Members: If you own a small or mid-sized business and are a member of a Treasure Valley-area chamber of commerce, you may be able to enroll in a group health plan, Chamber Blue, created in cooperation with Blue Cross of Idaho and Regence BlueShield.

National Standard Insurance Reporting Number: If your business offers employee health insurance, you need a National Standard Employer Identification number for electronic claims reporting.

Disability Insurance

Idaho, unlike some states, does not offer a state-mandated disability insurance program other than the coverage offered by Worker’s Compensation and your company’s health insurance plan. Both short and long term disability insurance can be purchased from an insurance company. Short term covers the early stages of a disability and is appropriate for someone who is expected to make a full recovery. Long term disability insurance generally covers up to 5 years or until the person qualifies for either Medicare or Social Security disability payments. Disability insurance can be obtained from most insurance companies that offer health insurance.

Life Insurance

Life Insurance

Can be an individual policy on the business owner or a group policy on the owner and employees.

Key Person Insurance

Protects a business against financial loss caused by the death or disability of a key person, including the owner, partners, and members of the management team. Also used to fund buy/sell agreements when a business is owned by more than one person. The business owns the policy, pays the premiums, and is the beneficiary.

Miscellaneous

Insurance Fraud

If you suspect an insurance company or agent may have committed fraud, you can file an online report with the National Association of Insurance Commissioners (NAIC) and with the Idaho Department of Insurance. If you suspect an employee or business owner has committed insurance fraud, contact the Idaho Department of Insurance.

Small Business Owners’ Guide to Insurance

Published by the Insurance Information Institute, this booklet covers basic insurance needs for small businesses, including Information on the needs of specific types of businesses, such as internet businesses, artists, food service, and farms and ranches.

Liability

Automobile/Fleet

Similar to individual automobile insurance, it covers business owned or leased vehicles (car, truck, van, or trailer). If a personal vehicle is used for business, special insurance coverage called “non-owned automobile coverage” may be needed. Contact your insurance agent for details.

Builders Risk Insurance

Available to contractors; protects against natural disasters (water, wind, hail, fire, etc.) that damage or destroy a building while under construction.

Business Liability/Property Insurance

Protects a business’s buildings, property and inventory against physical loss or damage due to theft, fire, water, accident and more. “Floater” coverage insures property not located at the business, such as equipment or supplies stored at a job site.

Business Interruption

Protects against loss when business activities are interrupted by a natural disaster. It supplements Business Liability coverage and can be added to a business liability or property insurance policy.

Business Identity Theft Insurance

Businesses that collect, store, or handle customers’, patients’ and/or employees’ confidential, personal, or financial data, may need this insurance. It covers the costs of notifying victims of theft, fees associated with recovery of the data, legal fees, and more.

Business Theft Insurance

Covers theft by employees, competitors, and others, including intellectual property theft. This may be needed in addition to liability insurance, which covers the theft of physical property.

Completed Operations

Contractors and manufacturers may need this insurance to protect against mistakes occurring after the completion of a project or sale of a product that could cause damage or injury.

Contents Insurance

Similar to personal renter’s insurance, covers damage, loss, or theft of the contents of a leased or rented building. The building owner should carry property insurance on the building (be sure to ask). The insurance may also cover leased equipment and items temporarily located at a job site.

Directors and Officers Liability Insurance

Protects officers and directors of a corporation or non-profit organization from personal liability for their actions on behalf of the business.

Employment Practices Liability Insurance (EPLI)

Protects against wrongful termination, discrimination, harassment and other employment-related lawsuits filed by employees, former employees and potential employees.

Export Credit Insurance

Protects small businesses who export against non-payment and political risks that may affect payment. Issued by Export-Import Bank of the United States.

General Liability

Protects the business if someone is injured while on the premises or employees damage the property of a customer while at a job location.

Home-based Business

Home-based businesses may need additional coverage beyond that offered by a homeowner’s policy. Not all home-based business activities are covered by homeowners’ insurance, particularly if the actual activity, such as house painting, does not occur at the home. Check with your insurance agent for details.

Product Liability

Protects against lawsuits for injury or property loss due to a defect, design flaw or malfunction of a product, food, medication or another item.

Professional Liability

Also known as Errors and Omissions insurance, it protects professionals who have greater than average knowledge in a particular area, such as CPAs, doctors, lawyers, engineers, architects and counselors, against lawsuits related to their professional expertise. Medical malpractice insurance is a type of professional liability insurance.

Umbrella (Supplemental Liability)

Provides additional liability coverage beyond that offered by a primary liability policy. This may be needed by businesses engaged in high-risk activities.

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