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Business Insurance Industry Insights Small Business Guides

How Does Workers’ Comp Affect Your Tax Return? What Business Owners Should Know

An injured workers and a tax filing showing how does workers' comp affect tax return

Workers’ compensation affects a business tax return through payroll reporting, deductible insurance premiums, and compliance requirements. If you have ever wondered how does workers’ comp affect your tax return, the impact typically shows up in payroll reporting, insurance deductions, and audit documentation. 

Understanding how workers’ comp impacts taxability, deductions, and payroll reporting can help you avoid filing mistakes and stay compliant. Gild Insurance Agency works with small businesses to help them understand how coverage decisions connect to payroll, reporting, and long-term planning.

Is Workers’ Compensation Taxable? 

Workers’ compensation benefits are not taxable at the federal level when paid to employees for job-related injuries or illnesses1. Employees do not report workers’ comp benefits as income on their personal tax returns when payments are made for job-related injuries or illnesses. This includes wage replacement benefits and medical payments related to workplace injuries. 

If an employee also receives Social Security Disability benefits, a portion of workers’ comp payments may be directly factored into Social Security calculations. For most employees, this does not affect payroll tax reporting. 

Can You Deduct Workers’ Comp Insurance as a Business Expense? 

Yes, workers’ compensation insurance premiums are typically tax deductible as an ordinary and necessary business expense when they cover employees2. This applies to sole proprietors, partnerships, LLCs, and corporations as long as the policy covers employees and meets state requirements. Accurate classification of employees and payroll amounts matter since workers’ comp premiums are often calculated based on wages and job roles.

How Workers’ Compensation Reporting Impacts Your Tax Filing

When business owners ask how does workers’ comp affect your tax return, the answer is that workers’ compensation directly impacts payroll reporting, deductible expenses, and year-end tax filings. You may need to: 

  • Reconcile payroll totals used for workers’ comp audits 
  • Confirm employee classifications match tax filings 
  • Track premium payments and policy adjustments 
  • Report payroll accurately for year-end tax forms 

Discrepancies between payroll records, workers’ comp audits, and tax filings can trigger questions from insurers and tax authorities. 

Common Mistakes to Avoid with Workers’ Comp and Taxes 

Business owners often encounter tax and compliance issues when workers’ compensation reporting is not aligned with payroll and tax filings. Common mistakes include: 

  • Misclassifying employees as contractors 
  • Underreporting payroll used to calculate premiums 
  • Forgetting to deduct workers’ comp insurance premiums 
  • Ignoring post-audit adjustments that affect expenses 
  • Failing to clear records of policy changes 

These errors can result in higher premiums, tax filing corrections, or compliance issues. 

How Gild Insurance Helps Businesses Stay Organized and Compliant 

Workers’ comp affects more than just workplace safety. It connects directly to payroll, tax reporting, and overall risk management. 

Gild Insurance Agency helps businesses: 

When your coverage and records are aligned, tax-season becomes more manageable and predictable.  Gild Insurance Agency makes it easier to protect your team, manage risk, and stay compliant year-round. 

Ready to protect your business? Get a quote online or schedule a call with a Gild agent today. 

Frequently Asked Questions 

Does workers’ comp affect tax returns? 

Yes, workers’ compensation affects a business tax return primarily through payroll reporting, insurance expense deductions, and audit documentation. While employees typically do not pay taxes on workers’ comp benefits; employers must properly report payroll and deduct insurance premiums to keep tax fillings accurate.

Is workers comp a tax write-off? 

Yes, workers’ compensation insurance premiums are generally a tax write-off and can be deducted as an ordinary and necessary business expense. Businesses can usually deduct premiums paid to cover employees as part of their operating costs.

Will I get a W2 for workers comp? 

No, workers’ compensation benefits are not reported on a W-2 because they are not considered taxable income. Because benefits paid for job-related injuries are not taxable income, they are not included in standard wage reporting forms.

Does workers comp settlement count as income? 

No, workers’ compensation settlements are generally not considered taxable income when they are paid for a job-related injury or illness.

  1. https://www.irs.gov/publications/p525 ↩︎
  2. https://www.irs.gov/forms-pubs/guide-to-business-expense-resources ↩︎

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Insurance Business Insurance Industry Insights Small Business Guides

Bonded and Insured: What Every Business Owner Should Know 

Tools representing a business being bonded and insured.

Being bonded and insured means your business is financially protected and accountable if something goes wrong. For many customers, contractors, and partners, hiring a bonded and insured business is a baseline requirement, not a bonus. It signals trust, responsibility, and readiness to operate professionally. 

For small business owners, understanding what bonded and insured actually means can help you with contracts, protect your finances, and avoid costly misunderstandings. Gild Insurance Agency helps businesses cut through the confusion with guidance and flexible business insurance built for how you work. 

What “Bonded and Insured” Actually Means 

A business is considered bonded and insured when it carries active insurance coverage and holds a surety bond. While the terms are often used together, they provide two different types of protection: 

• Insurance covers claims, injuries, and property damage related to your business operations. 
• Bonds provide a financial guarantee to clients if contractual or ethical obligations are not met. 

Why Clients Look for Bonded and Insured Businesses 

Clients look for bonded and insured businesses because it reduces their risk. Hiring a business that is bonded and insured reassures customers that they are protected financially if work is not completed properly or if an accident occurs. Many  contractors, electricians, and plumbers are expected to be bonded and insured before they can work with clients. 

Many clients, landlords, and partners require proof of insurance or bonding before signing a contract. Carrying coverage like general liability insurance or workers compensation insurance can also help businesses meet legal requirements and contract terms. Especially when employees or subcontractors are involved. 

Types of Bonds and Insurance Small Businesses May Need 

Not every business may need the same protection, but some may benefit from a combination of insurance and bonding based on their operations. 

Common insurance types include: 

Common bond types include, according to the U.S. Small Business Administration1: 

  • Surety bonds, which guarantee contractual performance 
  • License and permit bonds, which are required by state or local regulations 
  • Fidelity bonds, which protect clients from employee theft or dishonest acts 

Gild Insurance Agency helps businesses understand which protections apply to their industry type and growth stage, without complicating the process. 

Common Misconceptions About Being Bonded and Insured 

Many small business owners assume that having insurance automatically means they are bonded and insured, but that is not the case. Insurance and bonding serve different purposes, and a business may need both to meet contract requirements, licensing rules, or client expectations. 

Insurance covers losses, claims, or legal defense. Bonds provide a financial guarantee to clients, not coverage for your business. Another misconception is that bonding and insurance are only for large companies. Many small businesses are expected to carry both to stay competitive and compliant. 

Bonded and Insured – Made Simple with Gild 

Understanding what it means to be bonded and insured does not have to be complicated. Gild Insurance Agency helps small business owners get bonded and insured with coverage that fits their work, contracts, and long-term goals. 

Whether you need general liability insurance, workers’ compensation insurance, or broader business insurance, Gild makes it easier to get covered, stay compliant, and show clients you are ready to do business with confidence. 

Ready to protect your business? Get a quote online or schedule a call with a Gild agent today. 

Frequently Asked Questions 

What does it mean if a business is bonded and insured? 

A business is bonded and insured when it has insurance coverage for accidents or claims and a bond that guarantees its obligations to clients. 

What is the difference between being insured and being bonded? 

Being insured protects the business from financial loss. Being bonded protects the customer if the business fails to meet contractual, legal, or ethical obligations. 

Why would a person need to be bonded? 

A person may need to be bonded to meet licensing requirements, qualify for contracts, or give clients confidence that they are financially protected if work is not completed properly or honestly. 

How much does it cost to be bonded and insured? 

The cost depends on your industry, business size, risk level, and coverage needs. Bonds often start at a low annual fee, while insurance costs vary based on coverage limits and policy type. 

  1. https://www.sba.gov/funding-programs/surety-bonds ↩︎

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Business Insurance Industry Insights Small Business Guides

The Most Common Workers Compensation Claims 

a broken glass with spilled liquid representing workers' compensation examples

Workers’ compensation claims are not limited to dangerous jobs or large companies. Many claims come from everyday tasks that happen in nearly every workplace. Business owners search for workers’ compensation examples to identify common workplace injuries and understand how those claims affect daily operations. 

Gild Insurance Agency helps employers understand workers compensation insurance and prepare for workplace risks with clear guidance and coverage designed for small businesses. 

Examples of the Most Common Workers Compensation Claims

Workers’ compensation examples show that everyday workplace activities can lead to injury claims across many types of businesses: 

  • Slips, trips, and falls: One of the most common workers’ compensation examples involves slips, trips, and falls caused by wet floors, uneven surfaces, loose cords, or cluttered walkways. 
  • Overexertion injuries: Another common workers’ compensation example is an overexertion injury caused by lifting, carrying, pushing, pulling, or repetitive movements. 
  • Cuts and lacerations: These typically occur in kitchens, workshops, and warehouses involving tools, sharp equipment and packaging materials. 
  • Burns: Many of these injuries include contact with heat, steam, chemicals, or hot surfaces. 

According to injury data from the U.S. Bureau of Labor Statistics, incidents involving overexertion, falls, and contact with objects consistently account for a large share of reported workplace injuries1.

What These Claims Reveal About Everyday Workplace Risks 

Real-world workers’ compensation examples show that most workplace risks develop during routine, everyday operations rather than rare or extreme events. The Occupational Safety and Health Administration identifies slips, ergonomic strain, equipment use, and workplace layout as common sources of injury across industries2. These claims often reveal: 

  • Repetitive physical tasks performed without rest or training 
  • Workspaces that become cluttered or congested during busy times 
  • Equipment or tools used without consistent safety oversight 
  • Employees rushing to meet deadlines or customer demand. 

Reviewing workers’ compensation examples allows businesses to spot patterns and address risks before injuries happen. 

The Financial and Operation Impact of Workers Comp Claims 

Workers’ compensation examples demonstrate how even minor workplace injuries can cause significant financial and operational disruption. Examining workers’ compensation examples show how even minor injuries can lead to meaningful disruption. This impact often includes: 

  • Medical treatment and wage replacement costs 
  • Increased workers’ compensation insurance premiums after a claim 
  • Lost productivity while an employee recovers 
  • Staffing gaps that require overtime or temporary workers 
  • Project delays or service interruptions 
  • Administrative time spent managing claims and reporting 

Workers compensation insurance helps manage these costs but preventing injuries remains essential. 

Simple Ways Businesses Can Reduce the Likelihood of Injuries 

Many injuries shown in workers’ compensation examples are preventable through consistent workplace safety practices. Effective prevention strategies include: 

  • Keeping floors clean, dry, and free of obstacles 
  • Organizing storage to reduce awkward or heavy lifting 
  • Training employees on safe lifting and equipment use 
  • Requiring proper footwear and protective gear when appropriate 
  • Using non-slip mats and clear safety signage 
  • Inspecting work areas regularly for hazards 
  • Encouraging early reporting of unsafe conditions 

Applying lessons from workers’ compensation examples can significantly reduce the risk of workplace injuries. 

How Gild Insurance Helps Employers Stay Protected and Prepared 

Workers’ compensation insurance helps businesses stay prepared when injuries happen on the job. Reviewing real workers’ compensation examples helps employers understand the importance of having proper insurance coverage in place. 

Many businesses pair workers’ compensation insurance with general liability insurance and business insurance to support broader risk management. 

Gild Insurance helps employers secure coverage that fits their workforce and operations. You get simple quotes, clear guidance, and support from agents who understand small business needs. 

Ready to protect your team and prepare for the unexpected? Get a quote online or schedule a call with a Gild agent today. 

Frequently Asked Questions 

What is the most common workers’ comp claim? 

The most common workers’ compensation claim is an overexertion injury caused by lifting, carrying, or repetitive motion, often resulting in back injuries or muscle strains. Slips, trips, and falls are also among the most frequently reported claims. 

Which scenario is an example of workers’ compensation? 

A common workers’ compensation example is an employee injuring their back while lifting inventory or slipping on a wet floor during a scheduled work shift. If the injury happens while performing job-related duties, it may qualify for workers’ compensation benefits. 

What are 5 examples of workplace incidents? 

Five common workplace incident examples include: 

  • Slipping on a wet or cluttered floor 
  • Straining a muscle while lifting heavy items 
  • Cutting a hand while using tools or equipment 
  • Getting burned by hot surfaces or chemicals 
  • Being struck by falling inventory or moving equipment 

These incidents account for many workers’ compensation claims across industries. 

What are the main benefits of workers’ compensation? 

Workers’ compensation provides medical coverage, wage replacement, and recovery support for employees injured on the job. For employers, it helps limit out-of-pocket costs, reduces legal exposure, and supports business continuity after an injury. 

  1. https://www.bls.gov/iif/ ↩︎
  2. https://www.osha.gov/safety-management/hazard-prevention) ↩︎

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Business Insurance Small Business Guides

How to Start a Baking Business the Right Way From Setup to Coverage 

Loafs of bread to symbolize how to start a baking business

To start a baking business, you need to choose where and how you will sell, meet local food licensing requirements, register your business, and manage risk before selling to customers. Learning how goes beyond recipes alone. Food businesses are expected to follow basic food safety and hygiene practices to reduce the risk of food-borne illness, as outlined by the Occupational Safety and Health Administration (OSHA)1. 

Whether you sell custom cakes, bread at a farmers’ market, or packaged goods online, setting things up correctly from the beginning helps you avoid compliance issues, unexpected costs, and setbacks that can stall growth. Understanding how to start a baking business the right way gives you a stronger foundation to grow with confidence. 

Gild Insurance Agency helps bakers and food entrepreneurs protect what they build with simple guidance and flexible business insurance designed for small food businesses. 

Planning and Setting Up Your Baking Business 

Planning is the first step in how to start a baking business because it determines your legal requirements, startup costs, and risk exposure. Before you sell your first item, decide how, where, and what you will sell. 

Key early decisions include: 

  • Home kitchen versus commercial kitchen 
  • Direct sales, online orders, or wholesale 
  • Custom orders versus standardized products 
  • Part-time side business or full-time operation 

Each decision affects licensing requirements, insurance needs, and how easily your business can scale. Making these choices early helps you stay compliant, control expenses, and prepare for growth. 

At a high level, the basic steps to start a baking business include: 

1. Decide where and how you will sell your baked goods 

2. Choose which products you will offer 

3. Secure required permits and food safety approvals 

4. Register your business and track income 

5. Get insurance coverage before selling 

Permits, Food Safety, and Licensing Requirements 

To legally start a baking business, you must meet local permit and food safety requirements before selling to customers. Understanding these rules early can prevent fines, shutdowns, and delays. 

Requirements vary by location, but commonly include: 

  • Cottage food permits or commercial food licenses 
  • Food safety training or certification 
  • Health department inspections 
  • Business registration and tax IDs 

State and local rules for retail and food service are often based on food codes and regulations summarized by the U.S. Food and Drug Administration (FDA)2. 

Licensing allows you to operate legally, but it does not protect you financially if a customer becomes ill or injured. Compliance is required, but it is not a substitute for risk protection. 

Common Risks Bakers Face in Daily Operations 

Every baking business faces operational risks, even at a small or home-based scale. Learning how to start a baking business responsibly means understanding these risks before they affect your income or reputation. 

  • Customer illness claims related to food handling or allergens 
  • Slip and fall injuries at pickup locations or markets 
  • Equipment damage or kitchen fires 
  • Spoiled inventory due to power outages 
  • Accidental property damage in shared or rented kitchens 

These risks exist whether you bake from home or a commercial space, and they increase as you sell more products and reach more customers. 

Essential Insurance Coverage for Bakers 

Insurance helps protect baking businesses from financial losses that permits and licenses do not cover. Many people learning how to start a baking business overlook insurance until something goes wrong. 

General Liability Insurance 

Covers third-party injuries, property damage, and food-related claims. If a customer alleges illness or is injured during a pickup or event, this coverage can help with legal defense and settlements. 

Product Liability Coverage 

Often included in bakery insurance, this protects you if your baked goods cause harm after they are sold. 

Business Property Coverage 

Helps protect ovens, mixers, tools, and inventory from damage or loss. 

The right bakery insurance depends on how and where you sell. Gild works with small food businesses and helps bakers avoid paying for coverage they do not need while ensuring critical risks are addressed. 

How Gild Insurance Supports Bakers and Food Entrepreneurs 

Gild Insurance Agency helps bakers get coverage that matches their business model and stage of growth. Whether you are just learning how to start a baking business or expanding into new markets, you receive clear options, fast quotes, and guidance from agents who understand small food businesses. 

Gild makes it easier to protect your income, your equipment, and your reputation as your baking business grows. 

Ready to protect your baking business? Get a quote online or schedule a call with a Gild agent today. 

Frequently Asked Questions 

How do you start a baking business from home? 

You start a baking business from home by following your state’s cottage food laws and setting up your business legally. This usually includes choosing approved products, meeting labeling requirements, and securing basic insurance before selling. For many people learning how to start a baking business, home-based operations are the most affordable entry point. 

What licenses do you need to start a baking business? 

The licenses required to start a baking business depend on where you operate and what you sell. Many bakers need a cottage food license or commercial food license, basic business registration, and food safety certification. Licenses allow legal operation, but they do not protect against financial losses from claims or accidents. 

Why do small bakeries fail? 

Small bakeries often fail due to high costs, poor pricing, and lack of planning. Entrepreneurs learning how to start a baking business may also underestimate risks such as equipment breakdowns, food contamination claims, or customer injuries. Without protection in place, even one incident can create serious financial strain. 

How to start a baking business with no money? 

You can start a baking business with little to no money by keeping startup costs low and operating under cottage food laws. This often means selling a limited menu, using existing equipment, and reinvesting early profits. This approach is common for people researching how to start a baking business with minimal upfront costs, but legal compliance and basic insurance are still essential. 

  1. https://www.osha.gov/foodborne-disease/control-prevention  ↩︎
  2. https://www.fda.gov/food/fda-food-code/state-retail-and-food-service-codes-and-regulations-state 
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Categories
Business Insurance Small Business Guides

Photography Business License and Insurance: What Every Photographer Should Know 

A camera and a folder of documents including a photography business license.

Starting a photography business is more than building a portfolio and booking clients. The moment you accept payment; you are operating a business. That means licenses, legal responsibilities, and real financial risk. Without the right setup, one issue can interrupt your work or threaten your income. 

A photography business license and the right photograper business insurance work together to keep your business running smoothly. Gild Insurance Agency helps photographers understand what they actually need, so they can focus on their craft with confidence. 

What a Photography Business License Is and Why It Matters 

A photography business license is the legal registration required to operate a photography business in compliance with local tax, zoning, and business regulations. It gives you legal permission to operate in your city or state and confirms that your business complies with local regulations and tax requirements. 

Depending on where and how you work, you may need: 

  • A general business license 
  • Sales tax registration if you sell prints or products 
  • A home occupation permit if you work from home 
  • A DBA if you operate under a business name 

Licensing helps you avoid fines, penalties, or shutdowns. It also builds credibility. Clients, venues, and commercial partners are more likely to work with photographers who are properly registered and operating legally. 

The Insurance Policies Every Photographer Should Consider 

Photographers need insurance to protect against injuries, property damage, client disputes, and equipment losses that licensing does not cover. While licensing handles compliance, insurance protects you from financial loss. Photography involves people, equipment, locations, and deadlines. Even careful professionals face unexpected issues. 

Common policies photographers rely on include: 

General liability insurance: Covers injuries or property damage involving third parties. If a client trips over equipment or you damage a venue while setting up a shoot, this coverage can help pay for medical bills, repairs, and legal costs. 

Professional liability insurance: Protects against claims related to your work. Missed moments, lost files, delayed galleries, or client dissatisfaction can all lead to disputes. Professional liability insurance helps cover legal defense and settlements. 

Equipment and gear coverage: Cameras, lenses, lighting, drones, and editing tools are expensive and often mobile. This coverage helps repair or replace gear after theft, damage, or loss. 

Cyber insurance: Photographers store contracts, client data, and image galleries online. Cyber insurance helps cover data breaches, hacked accounts, or lost digital files. 

Business Owners Policy (BOP): A BOP bundles general liability insurance and business property coverage into one affordable policy. Many photographers choose this option for broad protection with simple management. 

Why Licensing and Insurance Go Hand in Hand 

Licensing establishes your business legally, while insurance protects your business financially when something goes wrong. Basically, a photography business license shows that your business is legitimate, and photographer insurance shows that your business is prepared. 

Many venues, commercial clients, and event planners require proof of general liability insurance before allowing photographers on site. Others may ask for both a business license and insurance before signing a contract. 

Together, licensing and insurance make it easier to secure bookings, rent studio space, hire second shooters, and take on higher-value projects without unnecessary delays. 

For more details on business licensing, this SBA resource outlines state-level business license requirements and how they vary by location.1 

Licensing Alone Doesn’t Protect You from Risk 

A business license does not provide financial protection against accidents, lawsuits, or professional claims. Specially, a photography business license does not: 

  • Replace stolen or damaged equipment 
  • Cover injuries during a shoot 
  • Defend you if a client files a lawsuit 
  • Reimburse lost income after a dispute 

These risks are common in creative businesses. Without general liability insurance and professional liability insurance, even one claim can create serious financial strain. Insurance fills the protection gap that licensing leaves behind. 

How Gild Insurance Supports Professional Photographers 

Gild Insurance Agency works with photographers at every stage, from side projects to full-time studios. Gild helps you find coverage that fits how you work, whether you shoot events, portraits, commercial campaigns, or product photography. 

You get fast quotes, flexible options, and guidance from agents who understand creative businesses and their risks. 

Ready to protect your photography business? Get a quote online or schedule a call with a Gild agent today. 

Frequently Asked Questions 

What license do I need to start a photography business? 

Most photography businesses need a basic business license to operate legally. The exact license depends on your city and state, but many photographers must register their business locally, obtain a sales tax permit if they sell prints or products, and comply with zoning rules if working from home. Requirements vary, so its important to check local regulations before booking clients. 

Do I need an LLC to do photography? 

No. You do not need an LLC to legally operate a photography business. Many photographers start as sole proprietors. However, forming an LLC can help you separate your business and business finances and offer legal protection.  

What is needed to start a photography business? 

Starting a photography business requires more than just equipment and clients. Most photographers need to register their equipment, obtain the proper licenses, open a business bank account, and secure insurance like general liability and professional liability insurance. 

How do I legally establish a photography business? 

You legally establish a photography business by choosing a business structure, registering your business name, obtaining required licenses and tax registration, and meeting local operating requirements. Insurance plays a key role as well, helping protect your business once you begin working with clients and shooting location. 

  1. https://www.sba.gov/business-guide/launch-your-business/apply-licenses-permits
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