As a small business owner, you want to find the best business insurance. If you ever have to file a claim for a problem like a workplace accident or stolen business property, the right coverage from a good company will prove to be valuable.
We evaluated the official complaint records of 28 insurers to help you find the best small business insurance.
Best Small Business Insurance 2024
- Allianz
- Allstate
- Clear Blue Insurance
- Farmers Insurance
- Acuity
- CNA
- Frankenmuth Insurance
- Travelers
- Chubb
- Cincinnati Insurance
- Westfield Insurance
What Insurance Do You Need for a Small Business?
When you’re buying small business insurance, your coverage decisions depend on your business’s type and size. Common types of small business insurance include general liability, commercial property and workers compensation insurance. .
General Liability Insurance
General liability insurance covers your business against liability claims, such as bodily injury and property damage to others. It also includes coverage for damage to reputation, such as slander, libel and copyright infringement.
General liability additionally covers legal costs, such as hiring an attorney and any judgments and settlements against your company.
Commercial Property Insurance
Commercial property insurance covers the physical property of your small business for problems, such as fire damage or theft. It covers business items, including computers and workstations, desks and chairs, business records, business inventory and supplies. It can also cover your office and business building.
Commercial property insurance is also called business property insurance.
Workers Compensation Insurance
Workers compensation insurance covers your employees if they become ill or injured because of their job. This includes medical care, physical therapy and compensation for lost wages. Death benefits for an employee’s family are available if an employee passes away from a work-related illness or injury.
Workers compensation insurance is required in most states, even if you have only one employee.
Commercial Auto Insurance
Commercial auto insurance covers the vehicles you use for business purposes, such as cars, trucks and vans.
A personal auto insurance policy generally doesn’t extend to business use of a vehicle. If you don’t get commercial auto insurance for work vehicles, any claims you make could be denied and you would have to pay out of pocket for any accident or damage, which could get very expensive.
Errors & Omissions Insurance
Errors & omissions insurance (E&O) will pay for liability costs if a customer or client accuses you of making a mistake in your professional services.
E&O is also called professional liability insurance.
Inland Marine Insurance
Inland marine insurance covers business property that’s being transported over land, such as equipment, materials, products and tools. This coverage is different from marine insurance, which covers your business property while it’s being transported over water.
Cyber Liability Insurance
Cyber liability insurance can pay for recovery costs if your computer system and data gets hacked. It also helps pay for expenses, such as notifying customers who have been impacted by a data breach and credit monitoring.
Short-Term Liability Insurance
Short-term liability insurance is designed for short projects, such as an hour, day, week or month. It covers accidental property damage and bodily injuries caused to others. It also covers your legal costs, judgments and settlements if you’re sued because of an accident.
Short-term liability insurance can be a good option for:
- Businesses that are seasonal or limited in duration.
- A project that requires you to give advice to clients.
- A project that requires a specific type of amount of insurance.
Short-term liability insurance is also commonly known as other names, such as:
- Construction project insurance
- Project insurance
- One-day business insurance
- One-day general liability insurance
- Temporary business insurance
- Temporary commercial insurance
- Temporary liability insurance
Medical Malpractice
Also known as medical professional errors and omission insurance, medical malpractice insurance covers the costs of claims that result in a patient’s injury or death. It also covers problems, such as medication errors, premature discharge from a clinic and unnecessary surgery. Medical malpractice insurance covers your legal costs, judgments and settlements if you are sued because of a problem covered by your policy.
If your small business deals with medical equipment, provides care to patients or monitors patient care, you might want to consider a medical malpractice policy. Examples of professions that could benefit from this coverage include:
- Acupuncturists
- Counselors
- Dentists
- Licensed practical nurses
- Nurse practitioners
- Nursing students
- Optometrists
- Personal trainers
- Physical therapists
- Physicians
- Physician assistants
- Therapists
- Yoga instructors
What Does Small Business Insurance Cover?
Here’s a closer look at top coverage types for small businesses.
General liability insurance pays for legal costs such as hiring an attorney and any judgments against you and your business. General liability insurance includes coverage for damage to reputation such as slander or libel and copyright infringement.
Liability insurance pays others, not your own business. It’s also known as business liability insurance.
Commercial property insurance covers a number of business items including computers and workstations, desks and chairs, business records, business inventory and supplies. Commercial property insurance can also cover a business’s office and business building.
Commercial property insurance is also called business property insurance.
Workers compensation insurance offers several benefits to employees who are sick or injured because of their jobs. This includes medical care, physical therapy and compensation for lost wages. Death benefits for an employee’s family are available if an employee passes away from a work-related illness or injury.
Businesses buy workers comp insurance for employees and this insurance is required in most states.
What Does Small Business Insurance Not Cover?
There are instances where small business insurance doesn’t offer coverage, such as:
- Flood damage to your business. You would need to have a separate commercial flood policy for flood coverage
- Fraudulent and intentional acts
- Wrongful termination, unless you have an employment practices liability policy
How Much Does Small Business Insurance Cost?
The average cost of small business insurance is $57 per month, according to Insureon. That’s for a business owner’s policy (BOP), which bundles general liability insurance, commercial property insurance and business interruption insurance. It’s generally cheaper to buy a BOP rather than buying each policy separately.
Your small business insurance costs depend on several factors:
- Industry. Industries with a higher risk will typically pay more than industries with a lower risk. For example, a construction company with multiple employees would cost more to insure than a graphics designer who works on their own.
- Size of payroll and annual revenue. The higher your operating costs and expenses, the more you can expect to pay for liability insurance.
- Number of employees. The greater the number of employees, the higher the risk of accidents.
- Location. If your business operates in a high-risk area with higher crime rates, you may pay more for business insurance.
- Building age and size. Older and larger buildings cost more to insure than newer and smaller buildings.
- Coverage amount and types. The higher your coverage limits and the types of business insurance policies you buy impact your costs. For example, if you have a business vehicle, you need to buy commercial auto insurance, which increase your overall business insurance costs.
- Claims history. If you have a history of filing claims for your small business, it could increase your premiums.
