What You Need to Know About North Carolina Business Insurance

As the 29th largest state by area with a diverse geographical landscape, low cost of living, and moderate climate, North Carolina is an ideal state for both living and working. With 10.8 million people, North Carolina remains the ninth most populated state in the country, growing by 1.3% annually.
North Carolina consistently ranks as one of the top U.S. states for doing business due to its pro-business environment fueled by the lowest corporate income tax in the U.S., along with low business costs and a qualified workforce. As of January 2024, state labor statistics reported an unemployment rate of only 3.5%. North Carolina’s extensive highway system, four international airports, and two seaports also provide easy access to both domestic and global markets.

While there are benefits to transferring or expanding a business anywhere in the state, Ruth Eanes—Senior Commercial Lines Underwriting Manager for Central Insurance—explains there are also unique risks that come with setting up shop in different regions of the state.

For example, businesses on the coast should have wind and hail coverage and layer in flood coverage. All companies, no matter the location, should have a roof maintenance plan to help protect their largest assets.

Despite the risks, Eanes explains that, with the right coverage, the opportunities for businesses in North Carolina are endless.

“Both Raleigh and Charlotte, North Carolina are among the fastest growing cities in the state, making them ideal locations for new businesses,” she says as an example. “And because they’re located in the western part of the state, there’s more protection from storms, and it’ll likely be easier and more cost-effective for them to properly insure their assets, making it a win-win.”

If you’re looking to relocate to or expand your business in North Carolina, it’s important to consider the factors that might affect insurance coverage—especially for manufacturers, contractors, and real estate developers. Read on to learn some of the most crucial factors and how you can prepare for them when insuring your business in North Carolina.

Factor #1: Fleet Management & Commercial Auto Rates

North Carolina’s growing population has increased demand for the construction industry. For commercial general contractors, this most likely means adding vehicles to your fleet inventory to keep pace with demand. Commercial general contractors need fleet safety protocols to combat the risks they’re susceptible to daily.

“When you get into your fleets and heavy trucks, you’re going to want to invest in digital telematics,” Eanes says. “Cameras should face forward as well as see inside the cab to help with adjusting claims, so even if the insured is at fault, it will help settle it much faster.”

A fleet safety program is very beneficial from an insurance perspective as well. “A formal driver training program and driver selection, as well as having a manager on site to make sure that vehicles are being properly serviced and maintained, result in better premiums and more favorable outcomes in the event of a loss,” she explains.

Learn more: Auto Insurance for Large Construction Businesses: How to Choose the Right Commercial Policy

Using telematic devices for enhanced fleet management goes beyond simple location tracking to deliver key improvements in safety, efficiency, and cost management. Additional benefits include:

Better-informed decisions that help productivity, customer satisfaction, and profitability

Simplified compliance with regulatory requirements

Reduction in fuel costs

Lower chance of unexpected downtime due to mechanical failures

Factor #2: Manufacturers Should Protect Their Facilities and People

From automotive to food processing to chemical manufacturing, many of the world’s best-known brands call North Carolina home. If you’re a manufacturer based in North Carolina, it’s important to take stock of how you protect your facilities and the assets within.

“As part of the underwriting evaluation, an insurance provider like Central will want to see the maintenance schedule on machinery, as equipment breakdown can be very costly,” Eanes says. “We’ll want to know what you’re currently manufacturing, as well as past products, and determine if it’s critical or non-critical, as that will affect coverage and rates.”

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Fire protection is also a significant factor. “You’ll want to reduce fire risk with a sprinkler system that is appropriate for the type of operation and make sure it’s functioning like it’s supposed to,” Eanes says.

She also recommends tagging a machine when it needs repair so an employee doesn’t mistakenly turn it on and cause an accident or injury to themselves or others. Having the proper guards on equipment to protect employees from pinch points, lacerations, or any moving parts of a machine that can cause significant injuries is vitally important. These guards may include physical guards or even light curtains that can automatically shut down a machine if an employee gets too close to an area that can cause harm. “Employee safety is paramount and taking proactive measures such as requiring eye and hand protection is important from an OSHA and insurance rate perspective,” she explains.

The North Carolina Department of Labor states that employers are required to perform a workplace hazard analysis to determine what personal protective equipment is necessary to protect employees from continued exposure to identified hazards.

Factor #3: Local Ownership of Real Estate is Preferred

Commercial real estate in North Carolina is a good investment but local ownership is preferred as building maintenance will be more hands-on.

“Insurance providers want to ensure the commercial building is being maintained properly,” Eanes says. “For instance, the roof’s condition is a major factor in real estate in the Southeast because of potential hail damage that comes from a convective storm.” An owner who lives in close proximity to the building is more likely to be aware of threats to the building, like storms, and can assess a roof’s damage in the aftermath firsthand.

Much like a manufacturing plant, life safety and liability are also important when it comes to real estate. You can get better rates if there’s a properly working sprinkler system and enough exits for people to evacuate in the case of an emergency. “We’ll also want to know who will be using the building and for what purposes, as that will tell us about the risks for slips and falls,” Eanes says. “For example, a bar will have more risk than an office building.”

In addition, if a commercial real estate investor were to buy a strip mall, an insurance provider would want to know who the tenants would be by the time they applied for insurance.

“We want to see that a building we’re considering insuring is at least 31% or more occupied, or it will be considered vacant. We know that with a strip shopping center, the tenants may change on a regular basis, so we’ll want to cover that on an annual basis,” Eanes explains.

Malls in North Carolina need consistent shoppers to be profitable and viable from an insurance standpoint. According to Business North Carolina, in 2006, the overall retail vacancy rate in North Carolina was 5.6%, but in malls, it was just 2.5%. Last year, the overall vacancy retail rate for the state had declined to 3.1%, but the mall vacancy rate increased to 7%.

Learn more: What Commercial Insurance Policy Does My Business Need?

The Central Difference

Whether you’re looking to move your business to North Carolina or evaluating your current commercial policies, we encourage you to contact one of our hand-picked agent partners throughout the state. Enter your zip code here to access the full list of agents in your area.