Q: What kind of business insurance do I need?
A: Every business owner needs General Liability Insurance and Commercial Property Insurance, at the very least. If you own a small business in a low-risk industry, you may be able to cut premium costs by purchasing these fundamental coverages through a Business Owner’s Policy.
General Liability offers you the cornerstone of liability protection, kicking in when your business is sued over third-party bodily injuries, property damages, and advertising injuries. Property Insurance covers your physical assets against loss or damage.
Though these policies address your bare-bones exposures, your industry, location, and operations may necessitate additional coverages. For example, most state laws require you to carry Workers’ Compensation Insurance if you have employees.
Which Kinds of Business Insurance to Buy: Details
As noted above, your insurance needs depend on the specific characteristics of your small business. For starters, not all industries face the same kinds of risks. The hazards a construction contractor may experience are often a far cry from those of a marketing consultant.
So let’s get specific. For details about what kind of business insurance your business needs, choose your industry from the list below. At the top of the page, you’ll find coverage suggestions when you hover on the "Insurance Products" dropdown menu.
Keep in mind that even businesses in the same industry don’t necessarily have the same risks. For example, though both professionals belong to the food services industry, a tavern owner may need Liquor Liability Insurance, but a coffee shop owner may not.
That’s why the best way to get a definitive answer about your coverage needs is to contact an insureon agent at 800.688.1984 or fill out an online application.
Property Insurance vs. Liability Insurance: Do I Need Both?
Yes, it takes both kinds of policies to protect a small business because every company…
- Has physical property it relies on.
- Faces some kind of liability just by virtue of being a commercial entity that interacts with the public.
Let’s explore these policies to give you a clearer picture, starting with Property Insurance. This kind of policy protects the assets your business needs to function, such as its…
- Physical premises.
- Computers and media devices.
When these are lost or damaged because of fire, theft, vandalism, or windstorms, your policy reimburses you so you can replace or repair your property.
By contrast, commercial liability policies only deal with the domain of damages — financial losses associated with lawsuits. Each policy usually addresses a different realm of liability. For example…
- General Liability Insurance covers basic liabilities every business has, such as premises liability. If someone slips, falls, and breaks a bone on your commercial property, this is the policy you’ll need to handle the cost of the lawsuit or medical bills. (To further complicate things, if it’s your employee who suffers the fall, you’ll need to rely on your Workers’ Comp Insurance to cover the claim. You can learn more about the difference between these two policies here: "General Liability Insurance vs. Workers' Compensation Insurance.")
- Professional Liability Insurance (aka Malpractice Insurance or Errors and Omissions Insurance) deals with lawsuits arising from mistakes in your professional work. For example, if you are a tax advisor and you make an oversight on your client’s return, they can sue you for the financial losses they suffered. (Related reading: "General Liability Insurance vs. Professional Liability Insurance.")
- Cyber Liability Insurance covers claims related to data breaches. For example, if an IT consultant recommends software that is easily hacked, the client can sue for the financial losses they suffered because of the breach. If the consultant has third-party Cyber Liability coverage, their policy can cover legal expenses and court-ordered damages.
- Employment Practices Liability Insurance steps in when an employee sues your business for managerial mistakes, which includes sexual harassment and discrimination, wrongful termination, mismanagement of benefits, and more.
To learn more about the differences between liability insurance policies, be sure to check out our page, "Small Business Insurance Policies: How Are They Different?"