What Insurance Do I Need for a Small Business?

Types of Insurance Needed for Small Businesses

What insurance do you need for a small business? We hear this question often, but there’s not a simple answer. That’s because the types of business insurance coverage that you need for your small business depends on what your company does and the state you’re in. In fact, state laws require some small business insurance policies and it’s up to you to make sure you have the right coverage. Without the right types of small business insurance, you may have to pay out of pocket for claims. Many small businesses don’t have the resources or capital to cover claims, which means they may not survive. That’s why small business insurance is an important investment for protecting your company. The 11 most common types of insurance that small businesses need are: 

1. General Liability Insurance

General liability insurance helps protect your business from claims that it caused bodily injury or property damage to someone else. For example, if a customer slips in your store, this coverage can help pay for their medical expenses. Many small business owners also get a general liability insurance policy that includes product liability insurance. This can help protect their company from claims of bodily injury or property damage that their products cause. 

2. Professional Liability Insurance

professional liability insurance helps cover claims related to mistakes in the professional services that your business provides. Let’s say your accounting firm makes a mistake on a customer’s financial statement and they have to pay a penalty. If they sue your business, professional liability insurance can help cover your legal costs. Investing in this coverage can help you save money in claims costs. This coverage is also known as errors and omissions insurance or E&O insurance. 

3. Business Income Coverage

Business income coverage, also known as business interruption insurance, can help replace lost income if you can’t operate because of covered property damage. This includes damage from fires, storms or theft.  

4. Commercial Property Insurance

Commercial property insurance helps protect your owned or rented building and equipment used to operate. So, if someone breaks into your building and steals your business computers, commercial property insurance can help cover the replacement costs. 

5. Workers’ Compensation Insurance

Workers’ compensation insurance provides benefits to employees if they get a work-related injury or illness. For example, if an employee gets carpal tunnel syndrome from years of typing and poor ergonomics, this insurance can help pay for their treatment costs. Most states require businesses to have this coverage if they have employees.  

6. Commercial Auto Insurance

Commercial auto insurance helps cover property damage and bodily injury claims if you or an employee gets into an accident while driving a company-owned vehicle for business. So, if your employee swerves off the road while making a delivery and hits a mailbox, this insurance can help pay for the damages. 

7. Data Breach Insurance

Data breach insurance helps your business respond to a breach if personally identifiable information gets lost or stolen. It can help cover your costs to: 

• Notify impacted customers or clients
• Run a public relations campaign to improve your business’ reputation
• Offer credit monitoring services

Some insurance companies may call this coverage cyber liability insurance. 

8. Commercial Umbrella Insurance

Commercial umbrella insurance extends the limits of certain liability policies that your business has. So, if a claims cost exceeds your policy’s limits, commercial umbrella insurance can help cover the difference. 

9. Employment Practices Liability Insurance

Employment practices liability insurance, also known as employers’ liability insurance, helps protect your business from employment-related claims. This includes claims of: 

• Discrimination
• Sexual harassment
• Wrongful termination

10. Business Owner’s Policy (BOP)

A Business Owner’s Policy (BOP) is one of the most popular types of insurance. It combines: 

• General liability insurance
• Commercial property insurance
• Business income insurance

11. Hazard Insurance

Small business hazard insurance is another name for commercial property insurance. It helps protect the owned or rented business property, like your building and equipment. 

Do I Need Liability Insurance for My Small Business?

The quick answer is yes. Most businesses need small business liability insurance. But there are several different types of liability coverage to choose from. The most common are general liability and professional liability. Getting the right business insurance coverage isn’t any different than protecting your home with homeowners insurance – they’re both some of the most important investments you’ll ever make. To learn more about the business insurance coverage you should have. We make it easy for you to customize your small business insurance policy to get the coverage you need. 

What Insurance Do I Need To Start My Own Business?

When you’re starting your own business, some types of coverage you should make sure to have are: 

• General liability insurance
• Professional liability insurance
• Workers’ compensation insurance

The actual types of insurance and whether you need additional coverage depends on what your company does and the state laws where you are. 

Business insurance cost

In 2022, the national average cost of a new 12-month business insurance policy through the Progressive Advantage® Business Program ranged from $46 a month for professional liability to $86 a month for workers’ compensation.

Your cost is based on a variety of factors including the industry you’re in and the specific types of jobs you do. For example, one landscaping company might only mow lawns, while another offers additional services such as tree trimming. They’re both landscapers, but their exposure to risk is different and will be reflected in their rates.

Discover more factors that influence business insurance rates and what you can do to get the coverage you need at the best price.

Customized coverage

We offer customized coverage that matches your business’s level of exposure to certain risks. A customized policy includes the coverages you need, with limits that match your specific requirements. Customized coverage is flexible, so if your situation changes – or you simply change your mind – you can update your policy any time.

Be wary of “one-size fits all” policies. They can have gaps in coverage that leave you exposed. For example: You might assume general liability covers any type of business liability; it doesn’t. Learn the differences between general liability and professional liability insurance.

Do All Small Businesses Have Insurance?

If you’re still wondering, “Do I need insurance for my small business?” The answer is yes. Most small businesses need some type of coverage for protection from various risks, like: 

• Bodily injury
• Property damage
• Car accidents
• Lawsuits

Without coverage, you’ll have to pay out of pocket for claims reported against your business. Having to pay these costs out of pocket can cause severe financial losses that can shut down your business. We have been helping small businesses like yours for over 200 years, making sure you get the kind of coverage you need. Let us help make sure you’re protected.

Other’s Business insurance

Liquor Liability Insurance
Liquor liability insurance is coverage for businesses that make, sell or serve alcoholic beverages. It’s also known as dram shop insurance.

Inland Marine Insurance
Inland marine insurance is coverage for moveable property, such as tools, equipment and other goods. It protects items while in transit over land or stored away from your business.

Employment Practices Liability Insurance
Employment practices liability insurance (EPLI) protects businesses against claims related to employee discrimination, sexual harassment and wrongful termination.

Rideshare Insurance
Rideshare insurance is intended to fill the gaps between the insurance ridesharing companies, like Uber or Lyft, provide for their drivers and their drivers’ own personal policies.

Commercial Property Insurance
Commercial property insurance protects commercial buildings and the moveable property your business owns and keeps onsite. It’s offered as part of a BOP.

Excess and Surplus Lines Insurance
Excess and surplus lines is a market for high-risk professions who can’t get general liability coverage in the admitted market. It’s also known as E&S insurance.

Employee Pet Insurance Benefit
Employee pet insurance is a voluntary benefit that can help cover medical expenses for your employees’ pets.

Health Insurance
Health insurance is a benefit that lets your business offer quality medical care to your employees and their dependents.