Different Types of Small Business Insurance

The kind and scale of your company will determine the coverage options you purchase when purchasing small business insurance. Commercial property, workers compensation, and general liability insurance are common forms of insurance for small businesses.

General Liability Insurance

Your company is protected from liability claims, such as those involving personal injury and property damage to third parties, by general liability insurance. It also covers reputational harm from things like libel, slander, and copyright violations.
In addition, legal expenses like hiring a lawyer and any awards or settlements made against your business are covered by general liability.

Commercial Property Insurance

Your small business’s physical property is protected against issues like theft and fire damage by commercial property insurance. It includes office supplies and equipment, workstations and computers, desks and chairs, business documents, and business inventory. Your office and business building may also be covered.
Another name for commercial property insurance is company property insurance.

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Workers Compensation Insurance

If one of your employees gets sick or hurt at work, workers compensation insurance will take care of them. This covers hospitalization, physical rehabilitation, and lost income reimbursement. If an employee dies as a result of an illness or accident at work, death benefits are payable to the person’s family.
Most states require you to carry workers compensation insurance, even if you just have one employee.

Commercial Auto Insurance

Your cars, trucks, and vans that you use for work travel are covered by commercial auto insurance.
Generally speaking, using a car for commercial purposes is not covered by a personal auto insurance policy. If you don’t have commercial auto insurance for your business vehicles, you risk having your claims rejected and having to pay for any accidents or damage out of pocket, which may be quite costly.

Errors & Omissions Insurance

If a client or customer accuses you of rendering professional services that were not performed correctly, your errors and omissions insurance (E&O) will cover your responsibility expenses.
A different name for E&O is professional liability insurance.

Inland Marine Insurance

Business property, including tools, materials, equipment, and products, that is being carried over land is covered by inland marine insurance. Marine insurance, which protects your company property when it’s being moved over sea, is not the same as this policy.

Cyber Liability Insurance

Should your computer system and data be compromised, cyber liability insurance can cover your recovery expenses. It also assists in covering costs for credit monitoring and consumer notification in the event of a data breach.

Short-Term Liability Insurance

For short-term undertakings, including those lasting an hour, day, week, or month, short-term liability insurance is intended. It provides coverage for unintentional property damage and injuries to other people.
In the event that you are sued due to an accident, it also pays for your legal fees, verdicts, and settlements.

An excellent candidate for short-term liability insurance may be:

  • Companies with a finite lifespan or that are seasonal.
  • A project where you have to counsel clients.
  • A project that needs a particular kind and level of insurance.
  • Common names for short-term liability insurance include the following:

Insurance for construction projects

  • Project protection
  • Business insurance for a single day
  • A single-day policy for general liability
  • Short-term commercial insurance
  • Short-term business insurance
  • Short-term liability coverage

Medical Malpractice

Medical malpractice insurance, sometimes referred to as medical professional mistakes and omissions insurance, pays for lawsuits that cause a patient’s harm or death. It also addresses issues like prescription mistakes, early clinic discharges, and pointless surgeries.
Legal fees, awards, and settlements are paid by medical malpractice insurance in the event that you are sued for an issue that falls inside the policy’s coverage.
If your small business handles medical supplies, offers patient treatment, or oversees patient care, you may want to think about obtaining a medical malpractice insurance. The following are a few professions that might profit from this coverage:

Those who practice acupuncture

  • Therapists
  • Dental professionals
  • Practical nurses with licenses
  • Licensed practical nurses
  • Students of nursing Optometrists
  • Individual exercise instructors
  • Physiotherapists
  • Medical professionals
  • Medical assistants
  • Counselors
  • Yoga instructors

Is Sole Proprietorship Business Insurance Required?
General liability insurance is a sort of business insurance that is recommended for sole owners. It provides financial protection against claims of injury and property damage from customers and clients resulting from your operations, services, or products.
You run the risk of having your personal and business assets mixed together when you are a lone entrepreneur. One method to safeguard your funds is with general liability insurance.

Do You Need a Business Owners Policy (BOP)?

Consider a business owners policy (BOP) if you are a small business owner. A BOP consists of:

  • Insurance covering general liability.
  • Insurance for commercial real estate.
  • Business interruption insurance aids with the recovery of lost revenue in the event that an unforeseen circumstance, such a fire, prevents your company from operating.
  • Purchasing a BOP is less expensive than purchasing individual insurance policies for the same protection. Thus, think about if a BOP is appropriate for you.

What Does Small Business Insurance Not Cover?

There are some situations in which small business insurance is not applicable, like:

  • Your business has been damaged by flooding. For flood protection, you would want a separate commercial flood policy.
  • Deceptive and deliberate behaviors
  • Unlawful dismissal, unless you have a policy covering employment practices liability

How Much Coverage Do I Need for Small Business Insurance?

To cover the unique dangers that your company encounters, you will require a sufficient amount of small business insurance. You’ll probably require a variety of company insurance policies.
For instance, a lawn care company is exposed to a variety of risks, including car accidents, personnel illness and injuries, lost revenue, and unintentional property damage to others. For landscaper insurance, a BOP, workers’ compensation, and commercial car insurance would be a smart place to start.


Depending on your state and line of work, you could need specific kinds of small business insurance that are mandated by legislation. For instance, professional liability insurance is mandated for realtors in Nebraska, New Mexico, North Dakota, Rhode Island, and Texas.
It is advisable to consult with an independent agent who can assist you in figuring out what kinds of coverage you need and how much small business insurance you’ll need.
You might take on new risks as your company expands, and your insurance requirements will also vary. Make sure you evaluate your company annually, taking into account factors like revenue, services rendered, and staff count, and add more coverage as needed.

What Is the Price of Small Business Insurance?

Insureon reports that the average monthly cost of small company insurance is $57. That pertains to a business owner’s policy (BOP), which combines business interruption, commercial property, and general liability insurance into one package.
Purchasing a BOP is typically less expensive than purchasing each policy separately.
Your small company insurance premiums are determined by a number of factors:

  • Sector. Generally speaking, sectors with higher risk will pay more than those with lesser risk. A construction company with several employees, for instance, would be more expensive to insure than an independent graphic designer.
  • The Annual Income and Payroll Size. You should budget more for liability insurance the larger your running costs and expenses are.
  • The Quantity of Workers. The likelihood of an accident increases with personnel count.

Your business insurance premiums may increase if it is located in a high-risk location with a high crime rate.

  • Constructing Size and Age. Insurance for larger, older buildings is more expensive than for smaller, newer structures.
  • Coverage Scope and Kinds. Your prices are impacted by the types of business insurance policies you purchase and the higher your coverage limits. For instance, you must purchase commercial auto insurance if you drive a work vehicle, which raises the total cost of your business insurance.
  • History of Claims. Your premiums may go up if your small business has a history of submitting claims.

Comparing business insurance quotes from many insurers is the easiest approach to obtain affordable company insurance. Online or through a conversation with an independent insurance agent, you can obtain rates for business insurance.

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