New Mexico Small Business Insurance Requirements
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Small businesses in New Mexico with employees are subject to insurance requirements.
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Operating a small business in New Mexico requires that owners comply with state requirements such as obtaining any permits and/or licenses applicable to the operation. If the business has employees, it must also adhere to federal and state laws that require the posting of workplace posters, comply with workplace safety standards and acquire insurance coverage for workplace injuries and job loss. Small businesses must also report new hires to the state within 20 days of their hire date, and this requirement also applies to re-hire employees as well.
Optional Small Business Insurance
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While these are not mandatory insurance requirements, New Mexico small business owners may purchase insurance policies that will protect their investments such as general liability insurance and/or key person life insurance. If they have employees, they have the option to provide insurance benefits such as health, disability, life, dental and vision. Landlords of small businesses that rent space may require business owners to carry commercial renter's insurance, but this coverage is not required by the state of New Mexico. Depending on the venture, some small businesses may acquire auto insurance policies to cover company vehicles.
Unemployment Insurance
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Small businesses in New Mexico must pay unemployment insurance taxes as a part of the insurance requirements set by the state. The Unemployment Insurance Tax Bureau is run by the New Mexico Department of Workforce Solutions, and the tax rate for new business owners is 2 percent for the first four years of being in operation. After four years, business owners are given an experience rating that determines whether the tax rate will increase or decrease. The money for the taxes cannot be deducted from employee salaries, and the quarterly reports and payments must be submitted on time or the small business owner will have to pay penalties. When reports are late the company must pay a $50 penalty, and if the payment is late, the company must pay either 5 percent of the tax due or $25, depending on which amount is greater.
Worker's Compensation Insurance
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The State of New Mexico Workers' Compensation Administration regulates the law that requires small business owners with three or more employees to purchase a workers' compensation insurance policy. The law gives employers with one or two employees the option to get the coverage, but small business owners in the construction trade must carry workers comp insurance, regardless of how many employees they have. The entities that are exempt from this insurance requirement include real estate agents, domestic servants and ranch and farm workers. All small businesses subject to the workers' compensation laws must pay an administration fee to the New Mexico Taxation and Revenue Department.
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