10 Business Compliance Milestones That Also Require Insurance Coverage

10 business milestones that also requires insurance

Make Sure Your Business Is Fully Licensed and Insured

Starting and growing a business takes a unique skill set: persistence, leadership, the ability to see the big picture. It also takes a great deal of paperwork. With every business milestone—forming a business entity, hiring employees, establishing offices, providing new services—business owners need to meet a whole new set of regulatory requirements. That’s pretty hard to do when you’re trying to stay focused on bigger things. Yet missing a government requirement can carry steep penalties and even threaten your ability to do business.

One way to make sure you’ve met all the requirements without missing a beat is to partner with a specialist. Harbor Compliance manages all of the corporate filings, registrations, and licenses needed to incorporate, run, and grow your business. You lay out your plans, and we make sure you’ve fulfilled your local, state, and federal obligations, down to the last document.

CoverWallet makes the insurance aspects of compliance equally seamless. They help businesses get the insurance they need to meet government requirements at every phase of their development, quickly and painlessly.

Following are highlights of some of the typical regulatory requirements, including insurance, that businesses need to consider at each milestone.

Establishing your business

To launch a business, you need to choose a corporate structure and register your entity with the secretary of state. This includes filing articles of incorporation, appointing a registered agent to accept legal notices for your business and registering for taxes at the federal, state, and local levels.

If you are a member of a regulated profession such as engineering, you must generally obtain professional licenses before advertising or providing services. In many states, your company must also apply for a separate firm license from the state licensing board for your industry. Feel free to reference this list of common regulated industries.

Construction firms and professional employment agencies must provide proof of workers’ compensation insurance as part of the application process.

New businesses may also need general liability insurance, even if you are a limited liability company (LLC). General liability insurance covers your business against losses from bodily injury, property damage, lawsuits, and more.

Many professions, including locksmiths and private investigators, require proof of general liability and property insurance as part of a state or local license.

Running your business

Maintaining good standing: Your company must maintain its good standing with the state by filing annual reports, renewing your registered agent service, and paying taxes. Many business licenses and permits also require periodic renewals.

Establishing business locations: If you operate in a location outside your home, you may need commercial property insurance. You may also need local business licenses and operating permits. In some municipalities, even home-based businesses must apply for operating permits.

In some cases, each branch office must be licensed with the state.

Hiring employees: Most businesses are required to carry workers’ compensation insurance once they exceed a certain number of employees. The threshold is as low as one employee in many states. This insurance compensates workers who are injured on the job. In states such as Pennsylvania and New York, a workers’ compensation insurance policy number is required for state tax registration.

Selling Products: If you sell products, you may need product liability insurance to protect your company from claims arising from defective products. You may also need to register for sales and use taxes. Finally, many products are regulated at the federal, state, and local levels, including alcohol, tobacco, firearms, and food.

Providing Services: If you provide services, you may need professional liability insurance to protect against financial loss resulting from malpractice. Architects; engineers; and insurance agencies, brokers, and agents must show proof of professional liability insurance to become licensed.

Cause Marketing: If your business engages in a joint fundraising campaign to support a charitable cause, you may need a commercial co-venture license.

Putting it all together

Tax registrations, professional licenses, corporate filings, insurance—it’s a lot to manage! The more regulated your line of work, the more complex the requirements get. The most important takeaway for businesses is to check for license and insurance requirements whenever you are engaging in a new activity, hiring workers, founding a new entity, providing a new product or service, or entering a new territory. A compliance specialist from Harbor Compliance can tell you quickly what requirements you need to meet based on your plans, and a qualified insurance provider such as CoverWallet can help you secure the required insurance.

Questions about any aspect of compliance? Get in touch by giving us a call today, 1-888-995-5895.

Jerri-Lynn Wier is an attorney and compliance specialist for Harbor Compliance, a leading provider of license and entity management solutions for businesses. She has 20 years of experience in insurance, business, and election compliance, and has licensed numerous clients in a wide range of regulated industries. She is available to answer any questions about your licensing needs at 888-995-5895 or info@harborcompliance.com.

Disclaimer: Harbor Compliance is not an accounting or law firm and does not provide tax, financial, or legal advice.