Small business owners in Georgia, with its robust business-friendly economy, need to consider business insurance. Insurance is an important part of a healthy business and that spells success for the economy of the state. Georgia business insurance includes important coverages like workers’ compensation, general liability, and commercial auto. Other coverages to consider are professional liability, business owner’s policy (BOP), and employment practices liability insurance (EPLI).
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Georgia Business Insurance Requirements
While not every type of insurance is required in Georgia, there are required coverages on the state level and some industry-specific requirements to keep in mind. And of course, there is always the risk of being uninsured or underinsured when it comes to deciding what business insurance to purchase.
Workers’ Compensation
Workers’ compensation insurance is required in Georgia. The threshold for when workers’ comp is mandatory is for any business with three or more employees—whether they are part-time or full-time, under a contract of hire, and written or simply implied.
Regardless of whether it is required or not, it makes sense to carry workers’ comp. This is because it helps with wage replacement and medical bills if an employee gets injured or becomes ill from their job. Most Georgia business insurance companies offer a return-to-work plan to help you and your employee get back on the job. Programs like this help limit the time you are without the employee and keep the cost of the claim lower.
Commercial Auto
Georgia carries a financial responsibility law for commercial auto. This means you have two options: carry the mandatory state minimums of coverage or be qualified as a self-insurer.
If you purchase auto insurance, the minimum coverage is for liability insurance. In Georgia, you are required to carry $25,000 in property damage per loss. You must also have $25,000 per person and $50,000 per incident in bodily injury coverage.
Keep in mind that this policy is like a BOP in that it can carry both liability and first-party coverage for occupants, pedestrians, vehicles, and property involved in a loss. It can also have some additional options, like roadside assistance.
General Liability
General liability insurance in Georgia is not required statewide. However, the Department of Insurance recommends you check with local municipalities for requirements and keep in mind that many licensing boards will require proof of liability insurance.
This list isn’t comprehensive, so check with local requirements in your area:
- Heating, ventilation, and air conditioning (HVAC) technicians must secure a $10,000 surety bond and provide proof of general liability insurance within 30 days of receiving their license. The policy must have a limit of at least $300,000 per occurrence
- Licensed handypersons are required to have general liability with a minimum of $300,000 per occurrence and $300,000 aggregate coverage
- General contractors must carry a policy with a minimum of $500,000 liability policy
- Painters must provide proof of liability insurance
Another situation where you can expect to need general liability insurance for small business in Georgia is when you are bidding on a project, renting a space, or participating in an event. In any of those situations, you will usually need a certificate of insurance (COI) showing you have general liability in the state.
General liability, sometimes called a commercial general liability (CGL) policy, has broad coverage for your business from third-party claims and is focused on three areas:
- Bodily injury.
- Property damage.
- Personal and advertising injury.
Georgia general liability insurance often includes additional coverages. Some examples are product liability for losses from a product you manufactured or helped distribute and insurance for the damage caused to a premise that your business rents. The costs of not carrying insurance are such a risk that it makes sense, whether it is required or not, to carry liability insurance for your business in Georgia.
Georgia Insurers Insolvency Pool: In the event that an insurer is declared insolvent, Georgia maintains an insolvency pool to help the customers of the defunct company. Only insurers licensed in Georgia are required to participate in the pool, which covers claims not related to business losses but for a refund on the premium paid to the insolvent company. There are exceptions to what is covered and the total amount it will pay out.
Other Types of Small Business Insurance for Georgia
While Georgia business insurance requirements are minimal, that doesn’t mean other types of insurance shouldn’t be considered, especially if the coverage in question applies to your business’ nature of operations.
Type of Coverage | What It Covers |
|---|---|
Professional Liability | Claims of financial harm or loss as a result of advice or failure to perform a contracted service made by a third party |
Commercial Property | First-party coverage for property owned, typically fixed property or contents |
BOP | Liability protection, first-party protection for your property and, usually, business lost income coverage |
Inland Marine | First-party for tools and equipment |
Commercial Umbrella | Excess liability coverage for claims that exceed the limits of your liability policy |
Cyber Liability | First and third-party coverage for losses related to data breaches, hacking, or other cyber-related losses |
EPLI | Claims of wrongful termination or other harmful employment practices |
General liability insurance in Georgia, while important, is not the only type of liability coverage a small business owner may need. Professional liability insurance is commonly referred to as errors & omissions (E&O) and differs from general liability by having a narrower focus on what is covered.
Industries in the service sector need to consider professional liability more than other businesses. Say you own a financial planning or architecture firm in Georgia. This is a policy you should consider because the protection it offers a business is related more to negligence in advice or adhering to a contract, as opposed to the more general liabilities of a CGL.
A common example of a professional liability claim is a situation where someone claims you gave them bad financial advice or failed to deliver on a contract. Professional liability is what you would turn to for help.
Commercial property is a first-party coverage, meaning it is for your property and not someone else’s. It is important if you own a building, have a rented office space with furniture, or have a warehouse full of inventory. Depending on how the provider writes the policy, it may have coverage for tools and equipment—or you may need to insure that with a separate policy called inland marine (which we cover later on).
Occasionally, commercial property will be written “all risk.” This means the policy will cover any loss that isn’t specifically excluded in the policy. But usually, losses are handled on a named-peril basis, and coverage is typically limited to the listed location. This means the types of losses covered are described in the policy and are only associated with the listed location. For example, the policy may say that fire, theft, or vandalism are covered losses at a specific location, but wear and tear of the office coffee machine and the printer are not covered.
A BOP is a great option for Georgia small business insurance. The advantage of purchasing a BOP is that it is a combination of general liability and commercial property. Insurers will usually include a third coverage called business income insurance.
It is usually more affordable to bundle the policies than to purchase each one separately, and the BOP offers the convenience of having one policy for multiple types of coverage. For most providers in Georgia, businesses with revenue under $5 million or fewer than 100 employees are eligible for a BOP.
If you are working in an industry with tools or equipment—like a painter, contractor, or handyperson—you’ll need to look into inland marine. This first-party coverage is similar to commercial property. However, while commercial property is limited to a listed location, inland marine insurance “travels” with the tools and equipment. Hence, the “inland” part of its name.
Some providers will provide blanket coverage for tools and equipment, and others will have you list or “schedule” each individual item on the policy. So, let’s say you are working on a job site and an expensive piece of equipment is stolen, you would file a claim on your inland marine policy.
Sometimes, one liability policy isn’t enough—and that’s where a commercial umbrella policy comes in. It is an excess liability policy. If you work in a riskier industry and are concerned that the limits on your general or professional liability policy may be insufficient, a commercial umbrella policy can be purchased. The policy’s limits would not come into play until the limits of the other policy are exhausted.
For instance, you have a general liability policy with a limit of $2 million and a commercial umbrella policy with a limit of $1 million. Once the general liability policy of $2 million is exhausted, you could file a claim for the additional $1 million in coverage from the umbrella policy.
Despite the “liability” part of the name, cyber liability insurance is similar to a BOP and is usually divided into first and third-party coverage:
- First-party cyber liability helps with the expenses you face from a data breach, which can include investigating and notifying anyone impacted.
- Third-party coverage is a type of liability that can help protect your business if customers decide to sue you for negligence. In the event of a data breach, your business may be subject to fines and penalties from the government or private entities. This part of the policy can also help with those fines.
Finally, EPLI is an important Georgia small business insurance policy because it offers protection for your business against claims of wrongful termination, hiring, and employment practices. Examples of an EPLI claim include sexual harassment and gender discrimination.
Georgia Small Business Insurance Costs
Premiums for Georgia business insurance vary widely depending on the industry and size of the company. In our research for this article, we obtained a number of sample quotes from a variety of different brokers and carriers. All of them were for companies with three employees or fewer and an annual revenue under $250,000.
Industry | Estimated Monthly Premium | Coverage Type | Coverage Amount |
|---|---|---|---|
Handyperson | $21 to $165 | General liability | $1 million per occurrence, $2 million aggregate |
Photography | $9.58 to $29.16 | General liability | $1 million per occurrence, $2 million aggregate |
Restaurant | $99.66 to $222.92 | BOP | $1 million per occurrence, $2 million aggregate (includes liquor liability) Cost of building and kitchen equipment |
Landscaping | $117.17 to $159 | General liability | $1 million per occurrence, $2 million aggregate |
When evaluating the risk of a business, providers take into account a number of factors. Some of these factors are:
- The geographic region within Georgia, including the specific county
- Yearly revenue and payroll
- Claims history
- Risk management and training
- Business experience
- Prior insurance history
How To Get Georgia Business Insurance
There are several options available when looking to get business insurance in Georgia.
Provider
Whether you use a broker or an agent, all insurance policies are underwritten and serviced by an insurance company or carrier. Some providers distribute their products through agents or brokers, whereas others work directly with consumers and generate quotes online. Finally, there are carriers that only sell insurance through agents.
Agent
An agent works for the insurance company and helps connect the carrier with prospective policyholders. There are some agents who are called “captive agents” and only sell insurance for one insurance company. Others are called “independent agents,” and they work with multiple insurance companies. For example, State Farm is a provider with many captive agents, while Liberty Mutual is a carrier that works with independent agents.
Broker
Another option for purchasing business insurance in Georgia is by going through a broker. A broker is like an agent, except the broker works on behalf of the customer and not for the insurance company. Usually, a broker will work with many different carriers and provide insurance advice to the client while helping them find the best option for insurance.
Georgia Small Business Statistics—Why Insurance Is Important
Georgia may be called the Peach State but its strength is built on more than growing fruit.
It has the eighth-largest economy in the United States and is also the eighth-largest state in the US with a population of 10.9 million.
Consider the following statistics about small businesses in Georgia:
- There are 1.2 million small businesses in Georgia. This accounts for up to 99.6% of all businesses in the state.
- Small businesses employ 1.7 million employees. This means that 42.5% of all employees in Georgia work for a small business.
- Exports from small businesses totaled $11.5 billion in 2022, making up 31.7% of all exporting firms.
- 1,000,184 small business employees are self-employed or working for a small business with “no” employees.
- Another 160,525 work for a company with one to 19 employees, leaving 21,011 employees working for a small business with 20 to 499 employees.
Additionally, between 2020 and 2021, 39,234 businesses opened and 29,153 closed. The trend of growth continues because as of March 2023, there were 51,260 new businesses registered in Georgia.
Perhaps the growth of businesses is due to the favorable atmosphere for small businesses. For the 10th year in a row, Georgia has been named the top-ranked state for a favorable business climate. Zeroing in, Fulton County (Atlanta) leads the state for new businesses. It currently averages 46.6 per 1,000 residents—the highest ratio in the state.
By helping small businesses with coverages like business interruption and injured workers with their wages, Georgia small business insurance is a key part of its strong financial success.
Frequently Asked Questions (FAQs)
Yes, Georgia law mandates workers’ compensation insurance be purchased and offered to any employee for businesses with three or more employees.
General liability insurance for small businesses in Georgia is required depending on the specific industry. There is no broad, statewide liability requirement like there is for workers’ comp. For example, general contractors in Georgia are required to carry a minimum liability policy of $500,000.
Costs vary widely by industry and size of the business, but general liability insurance in Georgia costs an average of $252 to $1,980 annually for a handyperson. A photographer can expect to pay much less with an average of $115 to $350 annually.
According to the Small Business Administration, as of 2022, there are 1.2 million small businesses in Georgia employing 1.7 million workers.
In Georgia, insurance is regulated by the Office of the Commissioner of Insurance and Safety Fire. If you have a complaint about your insurance company or an insurance claim, you must file the complaint online through the consumer portal.
Bottom Line
Whether you’re eating a peach, drinking Coca-Cola, or singing a Ray Charles song, Georgia is an important part of the American landscape, and its economic success is driven mostly by small businesses. This makes business insurance in Georgia important.
Simply Business understands the importance of insurance while making it simple and affordable to purchase insurance online. In 10 minutes or less, you can compare quotes in real-time from top companies, modify coverages, and purchase a policy online or call to speak to one of its agents.
