Some may want to take a different route and open a business of their own. This blog post will address the issue of whether or not a felon can get business insurance.
- What Is Business Insurance?
- Types of Business Insurance
- An Opportunity for Felons?
- Recommended Action
What Is Business Insurance?
A business is an organization that produces or sells a good or service. Business insurance, also called commercial insurance, is a type of insurance for businesses.
Businesses buy insurance to protect themselves against financial losses resulting from a lawsuit or physical damage to company-owned property. Commercial insurance helps ensure that a business can continue to operate after a loss occurs.
Business insurance protects businesses from major losses due to events that may occur during the operation of a business. Business insurance does not cover small losses that a company experiences.
Types of Business Insurance
Business insurance may be obtained from a registered insurance company through each state’s Department of Insurance or the National Association of Insurance Commissioners. The three main types of commercial insurance are:
- Liability insurance
- Property insurance
- Workers’ compensation insurance
Liability insurance protects a company from damages caused by any third parties. It covers the cost of personal injury or property damage lawsuits and injuries customers incur at a business. Not all small businesses are required by law to carry professional liability coverage. However, it is recommended for any company that provides services to the general public.
Property insurance covers damages to property within a place of business as a result of accidents such as fires or floods. Commercial property insurance is usually required in order to protect a business against catastrophic financial loss.
Workers’ compensation insurance protects a business in case employees are injured on the job. It also prevents employees from filing lawsuits against a company for any injuries. Workers’ compensation insurance is legally required in most states for small businesses that employ one or more persons.
Companies evaluate their insurance needs based on potential risks, which can vary depending on the type of environment in which the company operates.
One of the major factors in determining what insurance coverage is needed depends on the type of business. Other important issues include:
- Number of employees
- Years of operation
- Gross annual revenue
- Whether the business owns or rents vehicles
- Whether the business owns, leases, or rents the building
The following information is typically required when applying for commercial insurance:
- Where the business is located
- Name of the business
- Number of years under current ownership
- Number of employees
- Type of business and associated risks
- Insurance history (claims, rejection for coverage, etc.)
- Amount of coverage desired
An Opportunity for Felons?
There is no Federal or state law preventing a felon from owning a business. A felon may be prohibited from owning some based on the type of business and the requirements for licensing. Licensing and bonding can be affected by a felony.
Providing business insurance to convicted felons is often considered a risk. There is no regulation to cover all cases. “Non-serious” crimes will typically be overlooked but more serious crimes may not be.
Whether or not a felon’s past crime is a disqualification depends on the:
- Crime itself
- Time which has passed since the conviction
A felon may have to pay a higher insurance premium than a person who has a clean record. One crime which will prevent a felon from buying small business insurance for any company is insurance fraud.
It is important to be honest when applying for business insurance. If a felony isn’t disclosed but is found on a background check, this constitutes fraud and is punishable. It is a crime to falsify an insurance application which could result in being sent back to prison.
In order to be successful in getting commercial insurance it is essential for felons to be honest about their background. They are already viewed with the negative perceptions of being dishonest, untrustworthy, and unwilling or unable to follow directions from authority figures.
Having their record expunged can give them the chance needed to begin with a clean record and succeed in getting business insurance. Expunging a criminal record allows anyone to honestly state on an application that he or she has not been convicted of a crime.
It is a significant challenge, but it might be worth it for a felon that wants to get business insurance. Having his or her record expunged and also documenting any training programs, rehabilitation, or additional education could make the essential difference in a felon succeeding in getting business insurance.
Having support from family, friends, or previous employers can make a huge difference. A felon doesn’t have to be defined by his or her crime. We are not defined by our mistakes but by how we recover from them. He or she can begin again and live an honest life no matter how difficult it might seem.
What do you think about this blog post? Have you or someone you know been in the situation of trying to get business insurance with a felony? What was that like for him or her, and how did he or she achieve success? Please tell us in the comments below.