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Why should I take out liability insurance for my Utah company?

On Behalf of | Feb 2, 2018 | Business Organizations |

Companies that have no more than 500 employees are considered to be a small business in the eyes of the Utah government officials. Interestingly, according to the Utah Small Business Association, 97 percent of all employers in the state are considered small business owners. While nearly 60,000 of those businesses have employees, more 183,000 are run by and employ a single person.

Under Utah state law, any company that employs at least one employee is required to take out workers’ compensation insurance for their business, that is, unless the company is operated as a sole proprietorship. There are a few exceptions to this rule though. Employers in certain industries such as real estate, agriculture, or housekeeping may not have to maintain coverage. Some members or partners in LLCs may not either.

If your company is one of the many types that is required to have workers’ compensation insurance, it’s important to know that you’re not being penalized by having to take it out. Instead, it’s intended to protect your company’s financial interests. If it weren’t for you having to maintain such coverage, then you’d have to shoulder financial losses caused by worker injuries or damage claims yourself.

This could leave your company quite vulnerable to being sued civilly. Given that Utah’s statute of limitations is two years for products liability matters and four years in personal injury cases, it could leave you in limbo wondering if a lawsuit is going to be filed.

While how much you ensure your company for will vary depending on your company’s assessed value and field you’re in, most smaller businesses take out policies ranging from $500,000 to $1 million.

If you’re in the process of setting up your own company in Utah, a St. George business organizations attorney can advise you as to how to remain in compliance with state laws.

Source: Esurance, “Utah commercial liability insurance guide,” accessed Feb. 02, 2018