Do You Need Small Business Insurance in Alaska?
With the largest land mass of any state, Alaska is The Last Frontier. Despite high operating costs owing to more remote locations, small businesses can thrive in Alaska. With expansive state parks and natural areas, it is no surprise that fishing, hunting, and forestry are the top small business industries. Other important small business industries in Alaska include professional and technical services, construction, retail, and real estate.
- There are over 73,900 small businesses in Alaska
- 99.1% of businesses in Alaska are considered small businesses
- Small businesses employ over 136,400 people in Alaska
Alaska is big, but its small businesses give it economic strength. 52.3 of workers are employed by small businesses, exceeding the national share. It is essential to consider small business insurance to help protect your Alaska business. Small business owners need to know that Alaska may require certain types of insurance related to specific professions—and some insurance coverages are required for all businesses. Learn more here!
Required Business Insurance Coverage in Alaska
Commercial Auto Insurance.
If your Alaska small business owns vehicles, you must purchase commercial auto insurance. The state requirements are more straightforward than in other states. Minimum coverage requirements for business-owned vehicles include $50,000 in bodily injury per person, $100,000 in bodily injury per accident, and $25,000 in property damage liability.
Workers’ Compensation Insurance.
Alaska’s Workers’ Compensation Act requires small businesses with one or more employees to obtain workers’ compensation coverage. Some exceptions include part-time babysitters, house cleaners, harvest help, cab drivers, and amateur sports officials. If a small business owner with employees fails to maintain workers’ compensation coverage, civil and criminal penalties may apply. Workers’ comp covers medical bills and partial lost wages for work injuries and illnesses.
Recommended Business Insurance Coverage in Alaska
Small Business Owner’s Insurance.
Alaska small business owners can take advantage of a Business Owner’s Policy (or BOP) that bundles property damage insurance and general liability into one comprehensive policy. A BOP offers convenience and lower costs. A BOP typically covers losses and damages related to buildings used for business purposes, customer medical expenses for onsite third-party accidents like a slip and fall, and advertising damage claims.
General Liability Insurance.
When an Alaska small business owner does not need property insurance, a General Liability policy can be obtained as a separate minimum coverage. If you lease space for your Alaska small business, the commercial property contract may require General Liability Insurance. General Liability insurance helps ease the financial burden of customer injury and typically covers third-party risks, including property damage, slander, and libel.
Professional Liability Insurance.
Professional Liability Insurance coverage (errors and omissions/E&O) covers most work errors and mistakes, missed deadlines, incomplete work, and professional negligence lawsuits. Professional Liability coverage is ideal for small businesses in Alaska that provide expertise as a service, like travel, accounting, architecture, design, or hairstyle services, as it can protect them from related damage claims.
Cyber Liability Insurance.
Cyber threats in Alaska are increasing, including breaches impacting small businesses. Cyber Liability coverage is recommended for Alaska small businesses to help manage the results of a cyberattack, including help paying for customer notification and fraud monitoring costs, as well as associated legal fees. Cyber insurance helps businesses recover from ransomware, data breaches, and other common cyberattacks.
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