If you own a business in Delaware—whether it’s a biotech startup in Wilmington, a restaurant in Rehoboth Beach, or a retail shop in Dover—understanding your insurance responsibilities is essential. While not every policy is required by law, having the right protection can keep your business running, your contracts valid, and your finances safe.
This guide covers key Delaware commercial insurance requirements, what policies are most useful, and how costs are determined.
Who Needs This Coverage?
Delaware enforces strict commercial insurance rules, especially for businesses with employees or vehicles.
Here’s what is required by law:
- Workers’ Compensation: If you employ even one person—full-time, part-time, or seasonal—you must carry workers’ compensation. Sole proprietors and partners are generally exempt but can elect coverage. Corporate officers are automatically included, though up to four officers can elect to be exempt.
- Commercial Auto Insurance: If your business owns or operates vehicles, your policy must meet or exceed these state minimums:
- Liability: $25,000 per person / $50,000 per accident for Bodily Injury and $10,000 for Property Damage (25/50/10).
- Personal Injury Protection (PIP): $15,000 per person / $30,000 per accident.
- Unemployment Insurance (UI): You must register if you pay over $1,500 in wages in a quarter or have one employee working 20 or more weeks annually.
High-risk employers who cannot find private coverage may be placed in the Delaware Workers’ Compensation Insurance Plan (DIP).
What Coverage Should You Consider?
Beyond legal minimums, Delaware business owners commonly purchase extra protection to avoid lawsuits and business interruptions.
- General Liability Insurance: This is foundational coverage, protecting your business from claims involving third-party injuries, property damage, and legal defense costs.
- Business Owner’s Policy (BOP): Combines general liability and commercial property insurance, often including business interruption coverage. It is an excellent choice for retailers and offices.
- Professional Liability (E&O): If you provide advice or professional services, this policy protects you against negligence claims and errors.
- Cyber Insurance: Now critical due to Delaware’s data breach notification law, this coverage helps manage the high costs of reporting and remediation after a cyber attack.
Real-World Risks by Industry
Every business faces unique risks. In Delaware, these are common claims drivers:
- Construction: Trench collapses, subcontractor injuries, and stolen tools are top claims.
- Retail: Slip-and-falls, theft, and water damage from coastal storms are frequent.
- Restaurants: Grease fires, foodborne illness, and liquor-related incidents regularly trigger claims.
- Healthcare & Biotech: This sector sees high cyber insurance claims from data breaches and requires tailored coverage.
Discover cost-saving strategies in our guide: Local Business Insurance Solutions to Save You Money.
How Much Does It Cost?
Premiums depend on your business type, location, payroll, and claims history. While estimated annual costs for a retail store might be $750–$1,400 and for a construction firm $1,800–$3,600, your final price will be unique.
While policies like workers’ comp and general liability are often purchased together, their costs are driven by different factors. General liability depends on your public exposure risk, while workers’ compensation cost is a percentage of your payroll based on employee job classifications. Because of this, a combined “average” cost is not a reliable measure.
Claims Process and Legal Rules
If an incident occurs, prompt and proper reporting is critical:
- You must notify your insurer promptly and submit all required claim documentation.
- Under Delaware law, insurers must acknowledge claims and provide a decision within 30 days of receiving your completed proof of loss.
- Employers must file a First Report of Occupational Injury or Disease with the Office of Workers’ Compensation within 10 days of learning of an injury. Failure to file can result in a fine of $100 to $250.
Recent Market Changes
- Climate Impact: Flood zone reassessments in 2024 have affected property insurance premiums in coastal areas like Wilmington and Lewes.
Market Demand: There is rising demand for EPLI coverage among food and retail sectors and for cyber insurance across legal and finance industries.
Final Takeaway
No matter where you operate, small business insurance in Delaware is your firewall against lawsuits, disasters, and data breaches. To protect your operations and stay compliant, you should understand both required and recommended coverages for your industry.
Speak to a licensed advisor at 855-718-7552 to secure your policy today.
