Are you a small business owner with a prior felony conviction on your record? Is it possible for a felon to buy a small business insurance policy? Of course, the answer is “yes, but with exceptions.” So if you are felon considering going into business for yourself, you need to learn the basic facts before investing all your time into writing up your business plan.
Small Business Insurance For Felons
For starters–do you even need small business insurance?
Well, it depends on the state you are opening your business in. For example, North Carolina allows small businesses with under 500 employees to operate without “commercial liability insurance.” Is that a good idea? Probably not, but they allow it.
So your first question should probably be, does your state require you to have the insurance or not? If not, then it is your decision… But just remember, it may not be required, but without insurance, you’ll have no coverage to protect you as a business owner. So let’s ask yet another question.
What is commercial liability insurance?
Basically, it is a type of insurance highly recommended for small business owners because it “protects owners, employees, and patrons in the event of personal or bodily injury, property damage, advertising injury, or other problems caused by legal judgments and defense fees.” Sounds pretty comprehensive, doesn’t it? Does it sound like something you’d want to skip over? No, probably not.
So bear in mind, you may not “have to” have it, but you’ll probably sleep better at night knowing your small business has a financial safety net in the event of some unfortunate event. Certainly if you are not the sole proprietor of your small business, you owe it to your employee or employees to have coverage.
Can a felon get small business insurance?
So, we’re back to the question, can a felon obtain small business insurance, and again the answer is yes, usually…but understand that the insurance company is going to want to know more about you, your history, and your criminal record. If you do have a felony conviction on your record, they are going to pay close attention to the details, in particular the nature of the felony charge.
As with any dealings with any type of insurance company–be it small business insurance, life insurance, auto or property insurance, or anything else–it is strongly advised to be a forthcoming as possible. You should never try to cover up your past conviction; if it ever comes to light, things will only be worse. So let the company agent know your past, let them do their background check, and just know they’ll eyeball your application a bit closer than average.
Will you be denied?
Is it possible they’ll deny you? Yes, of course, there are certain felonies which can disqualify you. No one says an insurance company has to offer a policy to anyone. As stated in our other articles on insurance, an insurance company must look after their bottom line, meaning they cannot afford to take unnecessary financial risks…and offering insurance to convicted felons is often considered a risk!
That said, America is still the Land of Opportunity, and even felons are generally able to get a second chance to start a new life and a new business. Every situation is different, and there is no blanket policy to cover all cases. “Non-serious” crimes will typically be overlooked; more serious crimes may not be. Whether or not your past crime disqualifies you depends on the company and, of course, on the crime itself and the time which has passed. At a minimum you might expect to pay a higher insurance premium than a person who has a clean record.
One crime which perhaps understandably might prevent you from buying small business insurance from any company is, you guessed it, insurance fraud! We hope this article gave you a good basic overview of small insurance for felons!