Are you looking to inform yourself about small business insurance in Tennessee? Great start and a move that is ultimately very beneficial to your financial assets and personal peace of mind. 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 Tennessee 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 Volunteer State. Also a needed coverage regardless of the 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 Tennessee AssureStart Business Owners policy (BOP) has you covered!
If you use vehicles for your small business in Tennessee, you are legally required to hold liability insurance in case you get into an accident. 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 protection than personal auto.
Speaking of employees, if your small business has employees, in the state of Tennessee the law requires that all employers of five or more must have Workers’ Compensation Coverage. Corporate officers may reject coverage. Employers with fewer than five employees may elect coverage. It is also elective to partners and sole proprietors. Workers’ Compensation has 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 Volunteer 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, 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. Tennessee has instruction to form and Register a New Business on the Tennessee Secretary of State site.
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 Tennessee small business needs a license or permit 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. You’ll need an EIN if you have employees, operate your business as a corporation or partnership, file any tax returns for employment, excise, alcohol, tobacco or firearms. If you withhold taxes on income, other than wages, paid to a non-resident alien or if you have a Keogh plan your business also needs an 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 Tennessee 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.
