How to Get Insured & Bonded in Ohio

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If you are running any kind of business, whether as a sole proprietor or a one-man corporation, it is always advisable to acquire some form of liability insurance to protect your assets. Risk professionals also recommend becoming bonded as an extra layer of protection against situations caused by dishonest employees or the inability to complete a contracted job. In Ohio, certain businesses such as construction companies and day-care providers are required to be both insured and bonded. Depending on your profession, the cost to become insured and bonded can be expensive. The overall insurance and bonding process is rather straightforward.

Check with the Ohio Department of Commerce to determine if your business or line of work requires insurance and/or a bond. It is recommended to always have liability insurance, even if it is not a state requirement.

Read More: How to Become Licensed, Bonded and Insured

Call a local business insurance broker. Generally, business insurance brokers not only sell liability insurance but also provide surety or performance bonds. Explain your business model to the broker and determine the correct amount of liability coverage you need. Most Ohio municipalities require those seeking to conduct business with the local government have at least two million dollars in liability coverage. Also, the state of Ohio requires any business with at least one employee, besides the owner, to carry workers' compensation insurance. The broker can also arrange for a workers' compensation policy with the Ohio Bureau of Workers' Compensation.

Provide the broker with your business registration and financial and professional references and pay the fees for coverage. The cost of business liability coverage varies depending on the amount of coverage requested.

Familiarize yourself with the bonding requirements and determine what type of bond is required for your business. Ohio requires surety or performance bonds for business that is regulated by the state. A surety bond insures that if you fail to complete a project, the sponsor of the project will be paid the difference to hire another firm to complete the work. A surety bond also insures that businesses that handle money, such as lottery vendors, are financially stable and can meet their obligations.

Provide the broker with your references and available banking and credit information. The broker will determine the correct bond amount depending on the state of specific project requirements. As with insurance, the cost for a bond varies, but as May 2011, the average cost for a bond in Ohio in about 2.5% of the coverage provided. The broker will provide you with a bond certificate. If your business is required by the state of Ohio to have a bond, a copy of the certificate must be on file with the state agency that regulates your industry.