Rhode Island Business Insurance

This guide covers Rhode Island business insurance requirements, costs, and types. Business insurance protects your business’s assets from natural disasters and lawsuits from employees, customers, or other businesses.

In addition, all Rhode Island businesses with one or more part- or full-time employees must carry workers' compensation insurance under Rhode Island law. 

Recommended: Get the protection you need in Rhode Island with a dedicated small business insurance provider like Next Insurance.

Business Insurance in Rhode Island

Getting the right business insurance is easy with the right insurance provider. Learn more about business insurance and our recommended providers below.

Rhode Island Business Insurance Requirements

The State of Rhode Island requires certain types of business insurance. Like most states, workers’ compensation insurance is required for businesses with one or more employees. Otherwise, an employer must be self-insured. 

Rhode Island also requires unemployment and disability insurance for employees depending on hours worked and compensation.

How Much Does Business Insurance Cost in Rhode Island?

The most accurate way to determine insurance costs is to get a quote from a trusted provider. Some insurance providers specialize in small business insurance, which helps reduce costs. 

Recommended: Read our review to compare the pricing and features of our Best Small Business Insurance Companies.

According to a recent US small business study, you can expect to pay (on average):

  • General Liability: $65/month 
  • Business Owner’s Policy: $99/month 
  • Professional Liability (E&O): $97/month
  • Workers’ Compensation: $111/month

Types of Rhode Island Business Insurance

General Liability Insurance

The vast majority of Rhode Island companies purchase general liability insurance from an insurance company even though it is not legally required. This type of business liability insurance covers third-party bodily injury, third-party property damage, advertising liability, libel, slander, copyright issue, and other common claims faced by companies across various industries. 

General liability insurance is one of the most important types of business insurance your company can purchase.

Business Owner’s Policy

A business owner’s policy (BOP) is an affordable way to bundle business insurance coverages. This type of policy includes commercial general liability insurance with commercial business property insurance. Many small business owners with a physical business space opt for this coverage.

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Commercial Auto Insurance

You need to carry commercial auto insurance if your company uses vehicles to transport people or goods. This type of insurance is very similar to personal auto insurance and covers liability, medical costs, collisions, and uninsured/underinsured motorists. A commercial auto policy also covers vehicles rented or owned by your company and employees who use their own vehicles for company business.

Workers’ Compensation Insurance

Rhode Island requires businesses with employees to carry workers’ compensation insurance or to be self-insured. These policies cover employees who are injured or get sick while at work. Covered costs include medical expenses, lost wages, and death benefits. Coverage is provided for this “no-fault” insurance regardless of whether the employer caused the injury or illness.

Employee Health/Life/Disability Insurance

Companies that provide health, life, and/or disability insurance as a fringe benefit will need appropriate Rhode Island insurance. Under the Affordable Care Act, firms with more than 50 full-time employees must offer health insurance or pay an expensive penalty.

Professional Liability Insurance

Professional liability insurance covers financial risks to attorneys, accountants, and other people who provide professional services or expertise. Professional liability coverage varies depending on the industry but usually includes negligence, legal defense, slander or libel, and copyright and trademark disputes. 

Professional liability insurance includes errors and omissions (E&O) insurance.

Data Breach Insurance

If your company hosts customers’ personal information on its servers and those servers are hacked, lawsuits and damages can result. Data breach insurance protects you in these cases. 

Cyber Liability Insurance

Similar to but more comprehensive than data breach insurance, cyber liability insurance may pay for legal expenses related to a data breach or set up a call center for individuals affected by a breach. It also may pay for active protection against cyberattacks.

Commercial Crime Insurance

Crimes like extortion, forgery, burglary, computer fraud, and embezzlement are covered by commercial crime insurance. Situations in which this type of insurance is particularly useful include dishonest or libelous acts by employees.

Fiduciary Liability Insurance

Fiduciaries, who are legally required to act in plan participants’ best interests rather than the company’s when choosing advisors and investments, should consider this type of insurance coverage. It covers them if they are sued for allegedly providing negligent investment advice or administering plans or benefits incorrectly. 

Third parties like out-of-company consultants and benefit plan administrators are usually not protected.

Directors and Officers Insurance

Any company with directors and officers should consider directors and officers (D&O) insurance coverage, a type of liability insurance that reimburses directors and officers for claims made against them regarding harm allegedly caused by their management decisions.

Executive Risk Coverage

Executive risk insurance is business liability insurance that provides coverage for fraud, D&O, employment practices, initial public offerings, pension funds, extortion, and professional negligence.

How to Get Business Insurance in Rhode Island

There are four basic steps to getting business insurance:

Assess Your Risk

Consider what risks, natural disasters, and lawsuits your business might be prone to. This will help you get the right insurance coverage.

Get a Quote

It’s challenging to compare quotes because the policies will have different coverages and different prices — and it’s hard to compare apples to oranges. We recommend keeping it simple with two quotes from providers you trust.

Review and Purchase

Review the terms of the policy and make sure the coverage meets your needs. The cost of the policy should be a secondary consideration because if you don’t have the right coverage, what’s the point?

Gather Your Information

You’ll need information on your business property, including leases, construction, and square footage. For vehicles, you’ll need mileage, title, registration, and the names and copies of the driver’s licenses of employees that will be driving them.

Your insurance company will need the names and social security numbers of employees and owners. Bank records may also be requested as well as contact information for your CPA and/or attorney.

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Recommended: Get the protection you need with a dedicated small business insurance company like Next Insurance

Rhode Island Small Business Data

According to an SBA survey, 106,412 Rhode Island small business owners employ 230,742 people who comprise 52.2% of the state’s private-sector workforce.

The most populated cities in Rhode Island include Providence, Warwick, Cranston, and Pawtucket, which may be good places to establish a business in the state.

The professional, scientific, and technical services; construction; and real estate and rental and leasing sectors are the largest small business employers in Rhode Island, according to the latest data available from the SBA.

Rhode Island is not as favorable for business as some other states. The cost of doing business in the state is high, as is the cost of living. Moreover, the infrastructure is aging, and there is very little access to capital. But the state ranked fairly high (13th) for life, health, and inclusion in a recent survey.

Find the Best Insurance Providers in Rhode Island

We’ve compiled a guide to help you find the best insurance providers and brokers in Rhodes Island, including resources to find top-rated insurance agents in your city.

Providence

Rhode Island Business Insurance FAQ

Am I required to purchase workers’ compensation coverage in Rhode Island?

Yes. You are legally required to purchase workers’ compensation insurance in Rhode Island if you hire employees or obtain approval from the Rhode Island Department of Labor & Training to be self-insured. 

How much does business insurance cost in Rhode Island?

How much business insurance in Rhode Island will cost for you will depend on several factors:

  • How many coverage policies are you purchasing?
  • What types of coverage policies are you purchasing? Some are more expensive than others.
  • What’s your risk profile? Have you been involved in other claims or settlements in the past?
  • How liquid is your business?
  • How risky is your business’s industry?

Generally speaking, you will need to request a quote from your preferred insurance provider for each insurance policy. They will be able to assess your business’s specificities and give you an accurate estimation of your monthly or annual fees.

Why do I need business insurance?

Business insurance helps protect businesses from costs associated with liability claims and property damage. Some states require certain types of business insurance.

Business insurance not only protects your business — it protects your employees and customers too. It provides peace of mind and can add credibility to your business. Many contracts require business insurance, as well.

What kind of insurance do you need to run a business?

Business insurance requirements vary by state. In Rhode Island, businesses with at least one employee must have workers’ compensation or be self-insured. 

In addition, unemployment and disability insurance is required for Rhode Island employees depending on the number of hours worked and compensation. However, this is something that you will pay as a tax to the state and not something you obtain from an insurance provider.

How do I get a certificate of insurance for my Rhode Island business?

You can get a certificate of insurance by starting a policy with an insurance provider. Check out our review of the best business insurance providers to learn more.

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