Business insurance must-haves: protecting companies from risks.

• Author: Barbour, Tracy
• Position: INSURANCE

Insurance is an essential component of operating a business, according to Alaska's commercial insurance experts. Some types of coverage are mandated by law, while others are necessitated by industry, financing, and other standards.

Commercial insurance should be an integral part of every business's operating plan, says Timothy Maudsley, president of Alaska USA Insurance Brokers, Alaska's largest full-service insurance agency. "Insurance plays a large role in protecting a company's bottom line by ensuring critical assets, including its physical property, as well as human capital, are covered," he says.

Or as Kathy Martin, a sales executive for Wells Fargo Insurance Services, puts it: "It's the only way the insured can protect the assets of their company."

Coverage Mandated by Law

Must-have types of insurance that are mandated by state and federal laws include commercial auto, workers' compensation, and health insurance. Commercial auto insurance generally covers cars, vans, trucks, and other vehicles owned by the company, as well as employee-owned vehicles in certain cases. For example, Alaska USA Insurance Brokers--a subsidiary of Alaska USA Federal Credit Union--offers commercial auto insurance for business vehicles and employee vehicles being used for business-related activities. The company provides coverage for liability, cargo, limousine, bus/motorcoach, garage liability, and occupational accident.

The Alaska Workers' Compensation Act requires each employer having one or more employees in Alaska to obtain workers' compensation insurance, unless the employer has been approved as a self-insurer, according to the Alaska Department of Labor and Workforce Development's website.

However, there are some exceptions to those who must be covered. In general, a workers' compensation policy isn't mandatory for sole proprietors in a sole proprietorship; general partners in a partnership; executive officers in a nonprofit corporation; and members in a member managed limited liability company. Exceptions are also made for part-time baby-sitters, cleaning staff (non-commercial), harvest help and similar part-time/transient help, sports officials for amateur events, contract entertainers, and commercial fishers.

Health insurance is another important type of coverage that is legally required--for some businesses. Under the Affordable Care Act (ACA), employers of fifty or more full-time equivalent employees (FTE) must offer minimum essential coverage...