Small businesses in New Hampshire account for a large portion of the state's economy. Given that small businesses are so prominent in New Hampshire, it is important that all small business owners understand the obligations required by state law in relation to insurance. State regulators rarely take kindly to "I didn't know" excuse when handing out fines which can reflect poorly on the business as well as the bottom line.
What are the Commercial Insurance Requirements in NH?
Insurance laws vary by state, and small business owners should understand the laws specific to New Hampshire and every state where they conduct business. Unlike other states, NH does not require small business owners to purchase commercial insurance pertaining to liability, property or commercial auto. While not required, it is strongly recommended that every business purchase commercial insurance as it can provide a broad range of financial protection for your company. Though the state of NH may not require you to carry commercial insurance, many lenders, landlords, clients or employers who you are subcontracting for will most likely require you to be insured in order to conduct business with them.
Is Workers Compensation Required in NH?
One of the few mandatory insurance requirements for any business who has employees working within the state of NH is Workers Compensation Insurance. Though this seems clear cut, it is not always as the state may classify someone as an employee who you do not. An example could be someone who does subcontracting work for you or perhaps a family member helping out on the weekend. There are seven criteria typically looked at by the NH Department of Labor to determine if someone is a subcontractor versus an employee. These seven points are outlined in a former HPM Insurance blog Difference Between a Subcontractor and an Employee in NH.
The financial ramifications of not carrying workers compensation insurance should someone be injured while on the job could be massive and bankrupt a business. There are not only the uncovered expenses associated with the injury but also the fines and penalties levied by the state. NH Workers Compensation insurance can provide the necessary protection to avoid such disaster.
Other Possible Insurance Requirements:
Though NH does not require commercial auto insurance, many surrounding states do. This means that, if for instance, you have a job in Massachusetts and are pulled over or involved in an accident within Mass. you could be subject to the laws of that state and could have your vehicle impounded until you prove compliance with that state's laws. Your NH Commercial Auto Insurance policy follows your vehicle no matter where you go in the US so can help keep you in business beyond just the coverage it provides.
Depending on the number of employees you have, you may also be required by law to offer health insurance to your employees. The HPM Insurance health and life department can certainly answer any questions you may have regarding the specifics of your business. Again, knowledge is power as the government will not accept "I didn't know" as a reason for not offering such coverage.
Owning a small business in NH means you are making a significant contribution to the local economy. Unlike many states, New Hampshire does not have extensive legal requirements for commercial insurance. However, even when not required, purchasing commercial liability, property and other insurance coverages can help protect your business against a broad range of financial risks. It's important to discuss both your legal obligations and recommended coverages with a trusted insurance agent to properly protect all aspects of your small business.
This material is for informational purposes only. All statements herein are subject to the provision, exclusions and conditions of the applicable policy or state laws. For an actual description of all coverages, terms and conditions, refer to the insurance policy, the Department of Labor and/or the Affordable Care Act for updated requirements.