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Types of business insurance
Some commercial insurance policies benefit every business. Others protect against risks faced by certain professions. Learn which policies you’ll need for your small business.
What is business insurance?
With accidents, it’s not “if” but “when” they’ll occur. Thankfully, with the right business insurance policies, you can safeguard your business from unforeseen mishaps. From a fire to an injured employee to a vehicle crash, business insurance can protect you from financial loss in the event of a crisis or accident.
Some of the most essential types of insurance protect you from costly lawsuits. The type of liability insurance you’ll need depends on several factors, including your profession and the services provided.
You may need other policies to comply with state laws, get a license, or work for a client. The specifics depend on what your business does, where it operates, and what kinds of assets you have.
General liability is recommended for all small businesses
Almost every small business needs general liability insurance. This liability policy provides protection against common customer or client accidents, including bodily injuries, property damage, and personal injuries. An accident involving a customer can result in huge legal fees and medical expenses, making this an important policy for any business.
Every type of small business, including sole proprietorships, limited liability companies (LLCs), and startups, can benefit from this coverage, as even an accident involving a delivery person at your home office could lead to a lawsuit.
Your business risks determine which other policies you need
The types of risk your small business faces will dictate the policies you should purchase.
For instance, small businesses with valuable property should consider commercial property insurance, which covers your physical assets against loss or damage due to vandalism, natural disasters, and similar events. If you are a small business owner in a low-risk industry, you may be able to cut premium costs by combining this policy with general liability coverage in a business owner’s policy (BOP).
These policies address your bare-bones exposures. However, you may need additional coverage depending on your industry, location, and operations.
For example, most states require you to carry workers’ compensation insurance if you have employees. Similarly, all business-owned vehicles must have commercial auto insurance.
Types of insurance coverage for businesses
Required policies for most businesses
General Liability Insurance
Covers bodily injuries, customer property damage, and advertising injuries. Often required for commercial leases.
Best for:
Slip-and-fall accidents
Customer property damage
Libel lawsuits
Professional Liability Insurance
Also called E&O insurance, this covers legal costs for professional errors or missed deadlines.
Best for:
Negligence lawsuits
Project disputes
Work mistakes
Workers' Compensation Insurance
Covers medical expenses for employee injuries and is required in most states.
Best for:
Employee medical costs
Disability benefits
Injury-related lawsuits
Business Owner’s Policy (BOP)
Combines general liability and commercial property insurance for small businesses in one affordable package.
Best for:
Customer injuries
Damaged property
Business interruptions
Cyber Insurance
Helps businesses recover from cyberattacks and data breaches by covering recovery costs and customer notifications.
Best for:
Data breach lawsuits
Customer notifications
Fraud monitoring
Commercial Auto Insurance
Covers vehicle-related accidents and damages. Required for business-owned vehicles in most states.
Best for:
Auto accident lawsuits
Vehicle damage or theft
Vandalism
Insurance recommendations by industry
Your insurance needs depend on the specific characteristics of your small business. Because similar professional services share the same risks, it’s helpful to explore business insurance coverage recommendations by industry.
Select your profession from the list below for details about what kinds of insurance your small business might need.
How to get the types of business insurance you need
Buying insurance doesn’t have to be a chore. Get started by completing Insureon’s easy online application today to get free quotes from top-rated U.S. providers.
If you’re uncertain about your business insurance needs, speak to a licensed insurance agent who can answer your questions and offer advice.
Once you find the right types of coverage for your small business, you can begin coverage in less than 24 hours. After paying for your policy, you can download a certificate of insurance to show clients and others that your business is protected.