Every new Delaware business needs at minimum general liability insurance. Depending on your business type you may also need workers compensation, commercial auto, professional liability, and a business owners policy (BOP). Here is a complete checklist organized by business stage.
Delaware-Specific Requirement
Delaware requires workers compensation insurance for businesses with one or more employees. This is not optional and applies from the date you hire your first employee. Failure to carry workers comp in Delaware can result in fines and personal liability for employee injuries.
Pre-Launch Checklist
Before you open your doors or begin serving customers, these are the insurance coverages you need to have in place.
General Liability Insurance
Required for most leases and client contracts. Covers bodily injury, property damage, and personal injury claims. Standard limit: $1 million per occurrence, $2 million aggregate. For a detailed breakdown of what you need, read our guide on how much liability insurance your business needs.
Business Owners Policy (BOP) if eligible
Bundles general liability and commercial property in one policy at a discounted rate. Available to most businesses with under 100 employees and under $5 million in revenue.
Commercial Auto (if using vehicles for business)
Personal auto policies do not cover vehicles used for business purposes. If you use your vehicle for deliveries, client visits, or transporting equipment, you need commercial auto insurance.
Professional Liability if providing professional services
Also called errors and omissions (E&O). Required for consultants, accountants, IT professionals, real estate agents, financial advisors, and any business that provides advice or professional services for a fee.
Day 1 of Operations
Confirm all policies are active and in force
Verify that your insurance binder or policy documents show coverage effective on your opening date. Do not start operations if coverage has not bound.
Obtain certificates of insurance for your landlord and any clients
If you have signed a commercial lease, your landlord likely needs a certificate of insurance naming them as additional insured. Client contracts may also require this. Your agent can issue certificates within one business day.
Document your business property and equipment
Create a property inventory with photos and estimated values. Store it off-site or in the cloud. This makes filing a property claim much faster if equipment or inventory is damaged or stolen.
When You Hire Your First Employee
Workers Compensation Insurance (Delaware Required)
Delaware law requires workers compensation coverage for all employees from their first day. This covers medical expenses and lost wages for employees injured on the job. Failure to carry workers comp exposes you to personal liability and fines from the Delaware Department of Labor.
Employer's Liability Coverage
Often included with workers compensation, employer's liability covers lawsuits by employees claiming negligence caused their injury. Standard limits are $100,000/$500,000/$100,000.
Employment Practices Liability (EPLI)
Covers claims from employees for discrimination, wrongful termination, harassment, and similar workplace claims. Increasingly important as your team grows. Even unfounded claims require legal defense.
Growth Stage Coverage
Commercial Umbrella Policy
As revenue and assets grow, add a commercial umbrella for $1 million to $5 million in coverage above your general liability and commercial auto limits. Often costs $300 to $600 per year and provides significant additional protection.
Cyber Liability Insurance
If you store customer data, process payments, or rely on digital systems, cyber liability covers data breach notification costs, regulatory fines, credit monitoring for affected customers, and business interruption from cyber attacks. Increasingly necessary for businesses of all sizes.
Business Interruption Insurance
Covers lost revenue and ongoing expenses if your business cannot operate due to a covered property loss. Often included in BOP policies. Critical for businesses with high fixed overhead costs.
Coverage Types Explained
| Coverage Type | Who Needs It | Typical Annual Cost |
|---|---|---|
| General Liability (GL) | All businesses | $400 to $1,200 |
| Business Owners Policy (BOP) | Small to mid-size businesses with property | $800 to $2,500 |
| Workers Compensation | Required with 1+ employees in Delaware | $800 to $3,000+ depending on payroll and industry |
| Commercial Auto | Any vehicle used for business | $800 to $2,500 per vehicle |
| Professional Liability (E&O) | Service and advice businesses | $500 to $2,000 |
| Cyber Liability | Businesses handling customer data | $500 to $2,000 |
| Commercial Umbrella | Businesses wanting higher overall limits | $300 to $600 per $1M in coverage |
Common Mistakes New Delaware Businesses Make
- 1
Waiting until after the first claim
Many new business owners think nothing will go wrong right away. One slip and fall lawsuit before you have GL coverage can cost you everything you have invested in the business.
- 2
Using personal auto for business trips
Personal auto policies typically exclude business use. An accident while making a business delivery or visiting a client site may not be covered by your personal policy.
- 3
Skipping workers comp when hiring
In Delaware, there is no grace period. Workers compensation is required from the first day you have an employee. Waiting until you "get around to it" exposes you to state penalties and personal liability.
- 4
Assuming GL covers professional mistakes
General liability does not cover financial harm caused by professional errors, bad advice, or failure to perform promised services. Service businesses need professional liability on top of GL.
- 5
Not reviewing coverage as the business grows
Coverage that was sufficient at launch may be inadequate two years later. Review your business insurance annually and whenever revenue, employees, or operations change significantly.
Delaware Business Resources
New businesses across Wilmington, Dover, Milford, and Georgetown can get a comprehensive business insurance review and quotes from our independent agents. We work with multiple carriers to find the most competitive rates for Delaware businesses.
Frequently Asked Questions
What insurance does Delaware require for businesses?
Delaware legally requires workers compensation insurance for any business with one or more employees. Commercial auto insurance is required for vehicles registered to a business. General liability is not legally mandated by the state but is required by most landlords, clients, and licensing boards.
What is a Business Owners Policy and who qualifies?
A BOP bundles general liability and commercial property insurance into one policy at a discounted combined rate. It is typically available to businesses with fewer than 100 employees, less than $5 million in annual revenue, and operating from a fixed commercial location. Retailers, restaurants, offices, and small contractors commonly use BOPs.
Do I need business insurance if I work from home?
Yes. Homeowners insurance excludes business liability and business property claims. If a client visits your home office and is injured, or if business equipment is stolen, your homeowners policy will not cover it. Home-based businesses need at minimum a home business endorsement on their homeowners policy, or a separate commercial general liability policy.
How soon do I need workers compensation after hiring my first employee in Delaware?
Immediately. Delaware's workers compensation requirement applies from the date you hire your first employee. There is no grace period. You should have coverage in place before or on the employee's first day of work. Contact an agent as soon as you know you are hiring.
How much does business insurance cost for a new small business in Delaware?
A new small Delaware business with no employees typically pays $400 to $1,500 per year for general liability alone, or $800 to $2,500 for a BOP. Adding workers compensation increases costs based on your payroll and industry risk classification. A solo contractor with $100,000 in payroll might pay $3,000 to $8,000 for workers comp depending on the trade.
What is cyber liability insurance and do I need it?
Cyber liability insurance covers costs from data breaches, ransomware attacks, and other cyber incidents including notification costs, credit monitoring, legal fees, and business interruption. If you store any customer information electronically, process payments, or rely on digital systems for operations, cyber liability is worth considering. Premiums typically start around $500 per year for small businesses.
Build the Right Insurance Foundation for Your Delaware Business
A to Z Insurance helps new Delaware businesses identify the coverage they need, compare quotes from multiple carriers, and get the right policies in place before opening day. Call us for a free business insurance consultation.
Written by the A to Z Insurance team
Published March 20, 2026