We are thrilled you are informing yourself about Pennsylvania small business insurance. There is great information available for the small business owner today and if you haven’t found it yet, let us help lead the way.
Whether you’re operating your small business out of your home, in a rented space or maybe you have a kiosk, in all situations you have personal business property that you have invested in to run your Pennsylvania small business, whether it’s a laptop or a table top. Maybe you own your building and you want to protect it from the elements in the Keystone state. Also a needed coverage regardless of where you operate your small business is protection from lawsuits. At the very least; customers, vendors and property managers you work with will require proof of insurance because they understand the potential for the unexpected. The Pennsylvania AssureStart Business Owners policy (BOP) has you covered!
If you use vehicles for your small business in Pennsylvania, the state only gives you one choice to prove financial responsibility and that is an auto insurance policy. If you own vehicles that are for business use only, you should have a commercial auto policy. A commercial auto policy can cover multiple drivers and business-use-only vehicles. Some other cases that might require commercial auto insurance: you are transporting products or people, or you want to insure workers that either use your business vehicles or drive their own cars for business purposes. Typically your business assets can be greater than your personal assets, a commercial auto insurance policy will allow for higher limit of liability than personal auto.
Speaking of employees, if your small business has employees, in the state of Pennsylvania the law requires Workers’ Compensation coverage be provided to all employees. Coverage is elective for executive officers who serve voluntarily and without remuneration defined as either individuals who have ownership interest in an S corporation or at least 5% ownership in a C corporation, or who serve without pay in a nonprofit corporation. Businesses that choose Workers’ Compensation coverage have some important legal protections including immunity from most lawsuits by injured employees. Workers’ Compensation insurance pays medical bills and some lost wages of employees who are injured at work, or who have work-related diseases or illnesses.
Have you grappled with what small business structure to use yet; Sole Proprietor, Corporation, LLC or Partnership? Here is a quick view of the Pros and Cons.
| BUSINESS STRUCTURE | PROS | CONS |
|---|---|---|
| Sole Proprietor | Easy and Inexpensive to Form Complete Control Easy Tax Preparation |
Unlimited Personal Liability Hard to Raise Money You and Your Business are ONE at Tax Time |
| Corporation | Limited Liability Ability to Generate Capital Corporate Tax Treatment Attractive to Potential Employees |
Time and Money Double Taxing if a Dividend is Paid to Shareholders Additional Paperwork |
| S Corporation | Tax Savings Business Expense Tax Credits Independent Life Separate from Shareholders |
Stricter Operational Process Shareholder Compensation Requirements |
| Limited Liability Company (LLC) | Limited Liability Less Recordkeeping Sharing of Profits |
Limited Life Self-Employment Taxes |
| Partnership | Easy and Inexpensive Shared Financial Commitment Complementary Skills Partnership Incentives for Employees |
Joint and Individual Liability Disagreements Among Partners Shared Profits |
In the Keystone State, if the name you have chosen for your business is anything other than your own personal name, otherwise known as a DBA “Doing Business As” or a “Fictitious” name, then you’ll need to register it with the appropriate local government agency. The legal name of your business is required on all government forms and applications, including your application for tax IDs, licenses and permits. Pennsylvania is “Open of Business” and has an Online Business Registration. Pennsylvania also has a Small Business Development Centers site that has information that can benefit your small business, “Helping businesses start, grow and prosper” is their mission.
Some small businesses may need some form of license or permit to operate legally. The requirements vary by type of business, where it’s located and what rules apply. Find out if your Pennsylvania small business needs a license or permit Find Business Licenses & Permits. One other site, if you haven’t found it yet is the U.S. Small Business Administration with tons of small business information, it’s a government site so you can’t go wrong.
So does your small business need an Employer Identification Number (EIN), otherwise known as a Federal Employer Identification Number (FEIN) – this is a federal requirement for tax filings. If you have employees, operate your business as a corporation or partnership, or file any tax returns for employment, excise, alcohol, tobacco or firearms your business needs an EIN. Additionally, if you withhold taxes on income, other than wages, paid to a non-resident alien or if you have a Keogh plan your business needs EIN. Here is how to Apply-for-an-EIN.
Small business owners especially new sole proprietors can find a wealth of information covering their federal tax responsibilities at the SB/SE Tax Center which is the IRS page for everything small business!
AssureStart’s products have been approved by the Pennsylvania Insurance Department and are underwritten by Midvale Indemnity Company, NAIC 27138, an affiliate of American Family Mutual Insurance Company, 6000 American Parkway, Madison, WI 53783.
