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If you operate a small business in Colorado, your insurance needs will depend on factors such as your company’s:
- Industry
- Employee count
- Risk factors. For example, a welding company runs a greater risk of damaging someone else’s property than an accountant.
General liability coverage, which protects your business if you are accused of injuring another person or damaging their property, is considered essential small business insurance in Colorado. Business owners with employees will also need workers’ compensation insurance to assist employees who get hurt on the job.
If you or your workers drive company cars for business, commercial auto insurance helps pay for accident damages. Professional liability (or E&O) coverage helps cover lawsuit costs if someone accuses you of making a mistake, missing a deadline or not completing a job based on the terms of your contract.
Business insurance typically comes in a package with several different types of coverage. You can decide what to include based on the specific needs of your operations and our recommendations.
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General Liability insurance
General liability insurance in Colorado helps pay for damages or lawsuit costs if someone other than an employee accuses your business of causing an injury or property damage. Clients and commercial landlords often require this type of insurance before signing contracts with your company or renting your property.
For example, an employee at a window cleaning business in Denver accidentally breaks a large pane of glass at an office building. General liability insurance would help the cleaning company pay for the window repairs.
If the building owner decided to sue, general liability insurance helps cover the window cleaner’s court costs and attorney fees, along with damages if it is found liable.
Construction and cleaning companies can upgrade their coverage to include tools and equipment insurance. This type of insurance helps pay for repair or replacement costs if business gear if it is stolen, lost or damaged.
Workers’ Compensation insurance
Like most states, Colorado requires small businesses with employees to purchase workers’ comp coverage.
Workers’ compensation insurance helps business owners and employees who are injured on the job cover medical bills and lost wages. It will also pay for some legal costs if an injured employee claims that your negligence caused the incident.
For instance, a worker at a three-person carpentry firm in Colorado Springs suffers an injury while repairing a home, requiring stitches and a three-week leave of absence. Workers’ comp coverage would assist with the employee’s medical bills and lost wages during recovery.
Professional Liability (E&O) insurance
Professional liability coverage, also known as errors and omissions (E&O) insurance, helps cover defense costs if someone accuses you of making a professional mistake that causes financial losses.
If a client claims that you made a work error, failed to complete a project on time or didn’t fully deliver what you promised, professional liability insurance helps your business pay to defend itself in court and cover damages if you are held responsible.
For example, an apartment complex developer in Fort Collins alleges that an architect drew faulty building plans, which causes a delay in construction. The developer sues the architect for professional negligence and lost income.
Professional liability insurance would help the architectural firm cover legal costs. Depending on policy limits, this coverage also pays for damages if a court holds the architects liable or they need to settle.
Commercial Auto insurance
Colorado state law requires commercial auto coverage from company-owned vehicles.
Generally speaking, personal automobile insurance won’t cover business-related accidents.
Costs depend on how many vehicles your business owns, how often you’re on the road, and your history of previous insurance claims.
A landscaping company employee driving a company truck hits another car in the Eisenhower Tunnel on Interstate 70, causing several thousand dollars worth of damage. Commercial auto insurance would help the landscaping business pay for repairs to both vehicles and medical bills if the accident caused injuries.
Businesses that occasionally ask employees to drive their own cars or rented vehicles should consider adding hired and non-owned auto coverage.
