Best Small Business Insurance Companies

Small business insurance companies provide numerous types of coverage to businesses based on their size, industry, and needs. The best small business insurance companies offer competitive premiums with robust coverage and low deductibles. Business owners should also opt for insurers with helpful customer service teams and streamlined claim management.

What Is Small Business Insurance?

Small business insurance covers the many risks faced by small businesses, including the cost of damages or injuries resulting from accidents or other events. This type of coverage, also known as commercial insurance, protects a small business’ income, property, and other assets. Several types of small business insurance coverage exist, but a business owner’s policy is the most common.

Who Needs Small Business Insurance?

Small businesses need insurance to provide financial protection in the event of an accident or other unforeseen circumstance. Depending on the type of business and how it operates, a small business owner’s personal assets may be at risk if their company is sued for damages or is held responsible for an accident. However, business insurance primarily protects a company’s assets and helps it stay afloat in the face of a lawsuit, property damage, or other financial risks.

What Does Small Business Insurance Cover?

Small business insurance policies vary, but most cover a combination of property damage, liability, and employee injuries. Some policies also cover business interruption, which can help keep your business in business even if it faces high legal fees, expensive property damage, or other costs associated with a covered event.

What Does Small Business Insurance Exclude?

A small business policy exclusion is a provision that excludes certain risks from coverage. Some exclusions are standard and non-negotiable, while insurers may eliminate others for an extra fee. There are a few things insurance companies typically exclude from business insurance coverage:

• Catastrophic events: Wars, terrorism, floods, and earthquakes are often not covered under business insurance policies. That said, some insurers offer separate policies or endorsements for certain types of events like floods.
• Maintenance-related issues: Even business policies covering property damage exclude risks stemming from problems the insured party could have avoided with proper maintenance.
• Intentional or illegal activities: Insurance companies exclude claims resulting from the insured’s intentional or illegal acts from most business insurance policies. This prevents business owners from intentionally damaging their business to collect on the insurance policy.

These are some of the most common exclusions, but there are others. Read the fine print of every policy you consider to ensure it doesn’t exclude coverage for events that could affect your business.

How Much Does Small Business Insurance Cost?

Small business insurance costs depend on the type and amount of coverage. In general, though, a small business insurance policy costs between $14 and $124 per month, depending on the type of coverage.

The more robust your coverage, the higher the premium. So, purchasing multiple types of coverage will result in a higher monthly premium—around $350 or more. The best way to accurately estimate what your business insurance will cost is to get quotes from multiple insurance companies.

What Is the Difference Between Small Business Insurance and a Business Owner’s Policy?

A business owner’s policy—or BOP—is a type of insurance that bundles property damage and general liability insurance into a single policy. These policies may also include business interruption insurance. BOPs are typically only available to businesses with 100 employees or fewer and with revenues of less than $5 million. Other small business insurance policies may only include general liability insurance or other types of individual coverage.

Business Insurance Guide

Here’s what you need to know to get started with a business insurance policy:

How Does Business Insurance Work?

Business insurance protects businesses from financial losses due to risks such as property damage, liability, and employee injuries. Business insurance can also help companies to recover from interruptions caused by covered events.

The business pays monthly premiums and, in exchange, the insurance company provides financial protection in the case of a covered event. When a loss occurs, the business owner files a claim and then works with an adjuster to determine the total amount of the loss and the amount covered by the policy. The company then receives the amount of the loss—minus the deductible stated in the policy.

Types of Small Business Insurance

There are many types of small business insurance policies, and the best for your company depends on the specific risks your business faces. Some common types of small business insurance include:

• Business liability insurance: General liability policies protect your business from financial losses if you are sued for damages or held responsible for an accident.
• Commercial property insurance: Property policies help cover the cost of repairs or replacement if your business property is damaged in a covered event.
• Business interruption insurance: This type of insurance provides financial assistance if your business closes due to a covered event.
• Business owner’s policy: A BOP bundles together property damage, liability, and business interruption coverage. These policies are reserved for small and medium businesses.
• Commercial auto insurance: If you use vehicles for business purposes, you will need a commercial auto policy. As with personal auto insurance, this helps cover the cost of damages or injuries if an accident occurs.
• Errors and omissions insurance: Also known as professional liability insurance, this type of policy can help protect your business from financial losses if you are sued for damages or held responsible for a professional error or omission.
• Workers’ compensation insurance: This type of insurance is required in most states if you have employees. It can help cover medical treatment costs and lost wages if an employee gets injured on the job.
• Cyber liability insurance: Cyber liability policies can help protect your business if a breach of your company’s database exposes your customers’ data.
• Product liability insurance: Product liability insurance protects businesses from financial losses if a product it sells causes injury or property damage.

How Do You Choose the Right Business Insurance Policy?

The best way to find the right business insurance policy for your company is to work with an experienced insurance broker. An insurance professional can assess your needs and build a policy that meets them. However, there are a few things to keep in mind when choosing a business insurance policy—even with the help of an agent.

Take stock of business assets

List the physical assets of your business, including inventory, equipment, furniture, and vehicles. Then, estimate the value and replacement cost of these items. This will help you determine how much coverage you need to protect your business if a loss occurs.

Figure out how much coverage you need

Think about the potential liability risks your business faces. These could include injuries that occur on your property or that are caused by your products or services. If you have any concerns about these risks, talk to an insurance broker for help finding the right coverage for your needs.

Seek professional help

An experienced insurance broker can help you assess your specific needs and find a policy that meets them. An insurance agent can also help you research and compare providers and types of policies.

Compare quotes

Once you know what kind of coverage you need, start shopping for a policy. Compare quotes from different insurance companies to find the best rate and choose a deductible that you can afford if someone files a claim. Finally, read the fine print of any policy you’re considering to ensure it doesn’t exclude coverage for events that may impact your business.

Look for policy bundling discounts

Many insurance companies offer discounts if you bundle your business insurance policy with other types of coverage, such as property or liability insurance. If your business qualifies, a BOP may provide robust coverage at a discounted price.

Review your business insurance regularly

As your business grows and changes, so too will your insurance needs. Review your policy regularly and make necessary changes to ensure you’re still adequately covered. An insurance professional familiar with your business and industry can simplify this process.

What Do You Need To Take Out a Business Insurance Policy?

To take out a business insurance policy, you will need to provide basic information about your business, including the type of business, the location, and the number of employees. Also determine the amount of coverage you need and the type of policy that best meets your needs.

Once you have this information, contact an insurance agent or broker to get quotes and compare policies. An insurance professional can also help you organize the information and documents necessary to apply for a policy.

How Much Coverage Do I Need For My Business?

The amount of coverage you need for your business depends on the specific risks it faces, so get advice from your insurance agent or broker. However, some general factors may affect the ideal amount of coverage for your business:

• Business type
• Business location
• Number of employees
• Inventory value
• Type of products or services the business offers

How much coverage you need also depends on the type of business insurance you intend to purchase. For example, if you are only looking for property insurance, determine the value of your property to better understand the amount of coverage you need to protect it.

Frequently Asked Questions

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What types of coverage are available?

There are various types of small business insurance policies available, each designed to protect your company from a specific type of risk. Some common types of small business insurance include general liability insurance, professional liability insurance (also known as errors and omissions coverage), business interruption insurance, commercial property insurance, and workers’ compensation insurance.

Do I need small business insurance?

You may not realize it, but your small business is at risk for several different types of losses. That’s where small business insurance comes in—it can help protect your company from various risks, including those specific to small businesses. Talk to an insurance agent if you’re unsure whether small business insurance is right for you. They can help you determine the best policy for your company’s needs.

Why do I need small business insurance?

Whether you need small business insurance ultimately depends on the size of your business, industry, and other factors. For example, your state may require you to carry workers’ compensation coverage, or your landlord’s insurance may not cover your rented commercial space. Carrying small business insurance may also be more worthwhile for businesses that provide professional services and those that sell products that may result in a lawsuit.

How much does business insurance cost?

Business insurance costs vary widely from around $14 to $124 per month, but this number may be higher. The cost of carrying multiple types of business insurance can also add up, and you may spend closer to $350 or more each month. Talk to an insurance agent to get a quote and compare multiple quotes where possible.

What kind of business insurance do I need?

There are a variety of different types of business insurance policies available, each designed to protect your company from a specific type of risk. To determine the kind of coverage you need, you’ll first need to assess your business’s risks. Once you’ve done that, talk to an insurance agent to find a policy that provides the coverage you need.

What is the difference between general liability and professional liability insurance?

General liability insurance protects your business from accidents and injuries that occur on your property. Alternatively, professional liability insurance is designed to protect your business from lawsuits resulting from mistakes or negligence while providing professional services.

Do I need business insurance if I’m an LLC?

Structuring your business as a limited liability company (LLC) can protect your personal assets from being treated as business assets in case of a lawsuit or other financial risks. However, an LLC designation does not protect the business itself, so many LLCs still need business insurance. Depending on the size of your business, you may be required to carry workers’ compensation coverage; likewise, businesses with vehicles must carry commercial auto insurance.