Virginia Business Insurance: Required Coverage, 50/100/25 Auto Minimums and Workers' Comp
Virginia does not have a general law requiring a business to carry liability insurance. The coverage the law requires is workers' compensation once an employer regularly has three or more employees in service, the vehicle liability minimums on motor vehicles, and whatever a license, lease, contract or lender requires. For most businesses, the real question is which of those three triggers applies to you, and what your landlord, customers and licensing agency will ask you to show.
This guide covers the Virginia business insurance rules that apply, the current auto minimums, the workers' compensation thresholds and penalties, and the other coverage types you are likely to be asked for. It is informational only and is not legal, tax or insurance advice.
Virginia has no general business liability mandate
No Virginia statute requires every business to buy general liability insurance. That does not mean you can skip it. Commercial leases, client contracts and some licensing boards may require a certificate showing general liability limits. Before you assume you are exempt, check with the licensing agency for your trade, your landlord and your largest customers. Requirements usually come from the license type or the contract, not from a single state rule.
Auto liability minimums: 50/100/25 for policies effective in 2025 and later
Virginia requires motor vehicle liability insurance under Va. Code 46.2-472. For policies effective on or after January 1, 2025, an owner's policy must carry at least the following limits:
| Coverage | Minimum limit |
|---|---|
| Bodily injury or death of one person | $50,000 |
| Bodily injury or death of two or more persons in one accident | $100,000 |
| Damage to the property of others | $25,000 |
The limits that applied to policies effective from January 1, 2022 through December 31, 2024 are no longer the minimum. If you hold a policy written before 2025, review it at renewal and confirm the effective date and limits on your declarations page.
Three practical points for business owners:
- These figures are minimums. A business that hauls materials, drives to job sites or carries clients usually needs higher limits. Ask the insurer what higher limits cost instead of buying the floor by default.
- A personal auto policy may not cover business use of a vehicle. Ask in writing whether your policy covers deliveries, client trips and work errands. If it does not, buy commercial auto coverage.
- List every vehicle and every regular driver on the policy. An undisclosed driver is a common source of coverage disputes after an accident.
Workers' compensation: who must carry it
Under Va. Code 65.2-101 and the coverage provisions that follow, an employer that regularly has three or more employees in service in the same business must insure its workers' compensation liability. The test is headcount, not payroll. Several categories are treated differently:
- Underground coal mine operators must insure regardless of how many employees they have.
- Farm laborers count only where the employer has more than three full-time employees.
- Real estate salespeople who meet the statute's commission and written-contract test are excluded, as are certain taxi and executive sedan drivers.
Virginia has no rule requiring a construction business to carry workers' compensation from its first employee. Construction firms follow the same headcount test as other employers. If you are close to the three-employee line, confirm your count against the statute each time you hire, and ask an insurance agent to review it with you.
What an uninsured employer faces
An employer that is required to insure and does not faces several consequences under Va. Code 65.2-805:
- A civil penalty of up to $250 per day, with a maximum of $50,000.
- Loss of common defenses in an injury suit. The employer cannot defend on the basis of employee negligence, fellow-employee negligence or assumption of risk.
- A possible cease and desist order after 15 days' written notice.
Contractors face an additional check. A contractor must certify workers' compensation compliance to obtain or renew a local business license. Under Va. Code 58.1-3714, a knowingly false certificate is a Class 3 misdemeanor.
For how to register as an employer and set up coverage, see the employer registration and workers' compensation guides on this site.
Other coverage types and when they are required
Apart from workers' compensation and auto, Virginia does not mandate specific business policies. The following coverage types are common, and each covers a different kind of loss:
- General liability: third-party claims for bodily injury and property damage arising from your operations or premises. Most leases and contracts ask for this policy first.
- Commercial property: damage to your building, equipment, inventory and furnishings.
- Business income: lost income while the business cannot operate after a covered property loss. It is usually written alongside commercial property.
- Professional liability: claims that your advice or services caused a client financial loss. Virginia requires it only where a licensing board, a contract or an employer requires it, so check with the board.
- Cyber: breach response, notification costs and some business interruption from a network event.
- Employment practices liability: claims by employees or applicants for wrongful termination, discrimination or harassment.
- Commercial auto: vehicles owned or used by the business, as described above.
- Business owner's policy (BOP): a package that bundles general liability and commercial property, often with business income.
- Umbrella: extra liability limits above your primary general liability, auto and employer's liability policies.
There is no state requirement for general liability, so the real answer depends on your license type. Contractors should confirm the insurance their license requires with the Virginia Department of Professional and Occupational Regulation (DPOR) before relying on any limit. This guide does not print contractor limits, because they depend on the license class and the contract.
The local business license is separate from insurance
Virginia has no general statewide business license, and the State Corporation Commission (SCC) issues none. The license most owners encounter is the Business, Professional and Occupational License (BPOL) tax under Va. Code 58.1-3700 and following. BPOL is a local tax administered by each city or county, usually through the Commissioner of the Revenue.
Not every locality levies a general license. Under Va. Code 58.1-3704, a locality may levy none. Stafford, Rockingham, Bedford County, Washington County, Montgomery County, Louisa and Fluvanna are examples of localities without a general county license. A town may levy its own license tax in place of the county tax.
State law also ties some localities' authority to population. A locality with more than 50,000 residents cannot require a license for businesses with gross receipts under $100,000. A locality with 25,000 to 50,000 residents cannot require one for gross receipts under $50,000, and localities under 25,000 have no statutory floor. Localities with more than 50,000 residents may waive the license up to a ceiling, so confirm the current figure with your locality. Rates and filing deadlines are set locally, so ask your Commissioner of the Revenue rather than assuming a neighboring county's terms.
Entity filings come before your policies
Insurers and licensing agencies will ask for your exact legal name and entity type, so form the entity first. Virginia Articles of Organization for an LLC (Form LLC1011) cost $100 and are filed through the SCC Clerk's Information System at https://cis.scc.virginia.gov/. Virginia LLCs file no annual report. They pay a $50 annual registration fee to the SCC instead.
How to buy: compare coverage, not just premium
- Confirm the insurer is authorized to write the coverage in Virginia. The SCC Bureau of Insurance regulates insurers, so check the SCC's business resources at https://www.scc.virginia.gov/businesses/ before buying from an unfamiliar carrier.
- Compare limits, deductibles, exclusions and the definition of a covered loss in each policy. Two policies with similar premiums can pay very different amounts on the same claim.
- Ask an independent agent to quote more than one carrier for the same coverage, with identical limits and deductibles, so the quotes can be compared directly.
- Request a certificate of insurance for each landlord, licensing board or customer that asks for one, and confirm the named insured matches your legal entity name.
- Review coverage every year and whenever you add employees, vehicles, locations or services.
Informational note
This article is informational content. It is not legal, tax or insurance advice. Requirements change. Confirm current rules with the named agency before you buy coverage or file anything. Businesses with complex operations, regulated licenses or unusual ownership should consult a qualified attorney, a CPA and a licensed insurance agent.