Best Business Insurance in Minnesota of 2023

Bryan KeithNovember 1, 2023

A business insurance policy is there to protect your business from a variety of risks that can put you out of business. By having the right type of insurance, you can lower your risk for costly lawsuits and keep your revenue flowing in. 

Before choosing a policy, it’s important to know what’s inside. We’ve evaluated the best business insurance providers based on coverage, financial stability, customer satisfaction, and overall quality. 

What are the requirements for business insurance in Minnesota?

Business insurance is not required in the state of Minnesota. However, like most other states, workers’ compensation insurance is required if you have employees. If you don’t have employees and you don’t lease or own property, then you are not required to have business insurance.

Because Minnesota does not require business insurance, the best way to make sure you have the coverage you need is to research and discuss your options with a licensed agent.

What are the types of business insurance in Minnesota?

There are many different types of business insurance policies that small business owners can choose from. The five most common types of insurance for businesses include:

General liability insurance. 

General liability insurance, also known as a commercial general liability (CGL), protects your business from another person or business’s claims of bodily injury, associated medical costs, and damage to property. Some examples of what may be covered by general liability insurance include slips and falls in your store, damage to the property of others, or advertising injury (libel or slander). The general liability business insurance plan has a few exclusions. For example, it does not cover:

• Property damage or personal injury to employees and partners of the business owner.
• Damage or destruction of your property.
• Advertising injury arising out of physical injury to people and damage to their properties.
• Any contractual obligation that arises out of the business operations.
•  Any loss arising out of a criminal act or wrongful behavior by the business owner or their employees.

Professional liability insurance. 

Professional liability insurance is typically used by small businesses in the professional services industry, such as accountants and lawyers. This type of coverage protects against claims of negligence or inadequate work. Even with the best professional liability insurance policy, there are a few exclusions to keep in mind. The following are some of the most common:

• Punitive damages or criminal penalties
• Property damage (unless required by a contract)
• Intentional acts (such as theft or fraud)
• Professional services performed prior to the inception date of the policy
• Personal injury (such as slander or libel)
• Taxes, fines, levies, and other penalties imposed by governmental authorities

Product liability insurance. 

If you or your employees manufacture a product, distribute a product, provide a service or even just sell a product in some capacity, you may want to consider adding this type of coverage to your plan. Product liability provides protection from claims related to harm caused by a physical good that your company produces or sells. Like any other insurance policy, this one also comes with some exclusions:

• If the product is manufactured, sold, or distributed by an entity that is not named in the policy.
• If the product is being sold by a vendor who has not paid his premium. 
• When the product is not covered under the liability policy (which means it has to be listed as per the terms of the contract).
• If the product is not fit for use, or it has been inappropriately used by a consumer.
• Damage caused due to war, embargo, invasion, or terrorism.

Commercial property insurance. 

Commercial property insurance covers losses or damage to your business’s physical property, such as computers and inventory, because of fire, theft, or vandalism.

Workers’ compensation insurance

If an employee is injured or becomes sick on the job, workers’ compensation pays their medical bills and provides financial support until they can return to work. Workers’ compensation coverage is required in most states with few exceptions (sole proprietorships and partnerships). There are certain situations where the worker’s compensation plan does not provide coverage to your employees.

Here is a look at some of the exclusions in a typical workers’ compensation plan:

• If an employee is intoxicated or under the influence of drugs when he meets with an accident.
• If an employee causes damage on purpose or intends to harm himself.
• When an employee is involved in any illegal activity or acts while at work
• If an employee has a pre-existing injury and it leads to relapse or worsens during work.

Commercial auto insurance

If you use your car for business, commercial auto insurance is a must. It covers your vehicle for accidents, damage, and theft, and provides coverage for injured passengers and other drivers. But, there are certain things that this policy won’t cover:

• The personal use of the vehicle by the owner or employees
• Injuries to passengers
• Damages to any property if you are driving in prohibited areas or restricted areas

How much does business insurance cost in Minnesota?

Insurance companies consider a number of factors when determining the cost of business insurance.

Here are some of the most common:

Your industry

Businesses in higher-risk industries will pay more for insurance. For example, a construction company that works at great heights will pay more for liability insurance than a consulting firm that operates from an office.

Your location

While you can’t change your location, keep in mind that businesses in high crime areas may pay more for business interruption insurance to protect against theft and vandalism.

The size of your payroll

Payroll is one of the largest expenses for many small businesses. You may pay more for workers’ compensation if your payroll is large because the costs associated with injuries and illnesses increase as your payroll increases.

Your loss history

Your claims history helps insurance companies determine how risky it is to insure your business. If you have a history of frequent claims, you’ll likely pay more for business insurance than a company with no claims.

How to choose the best business insurance in Minnesota

Here are some tips to help you choose the best type of coverage for your small business:

• Know what types of insurance your state requires.
• Consider additional coverages that may be beneficial to your business.
• Work with an agent who specializes in commercial insurance to determine the amount of coverage you need.
• Choose higher deductibles to keep premiums down. Don’t choose a higher deductible than you can afford, though.
• Evaluate your coverage annually and make changes as your business grows.