Questions to ask before purchasing business insurance in 2026

Perhaps it’s a client’s damaged property, an employee’s workplace injury, or a cyberattack that shuts your business operations down for a few days. Business risks are everywhere—and you can’t always see them coming.

Purchasing small-business insurance is a strategic investment in your company that protects your long-term financial health and helps your business bounce back from lawsuits and expensive claims.

But it’s important to find the right types of coverage for your small business. If you’re wondering what to look for when getting business insurance, or what the best questions are to ask about insurance, look no further. This guide will help you understand the right questions to ask your business insurance agent or broker, so you can make an informed decision and purchase the right business insurance.

The types of business insurance your business actually needs depend on your company’s operations, location, and exposure to risk, among other factors.

Some of the most popular business insurance policies include:

General liability insurance is typically the first policy small business owners purchase. It protects your business from common third-party claims like:

• Bodily injury
• Property damage
• Product liability
• Advertising injury, including copyright infringement

For example, construction contractors often work on dangerous jobsites, filled with tools, equipment, and other potential hazards. If a customer trips and falls over a handyman’s ladder or a roofer breaks a homeowner’s window, general liability insurance would cover any legal defense costs, medical bills, and repair expenses stemming from the incidents.

Professional liability insurance, also known as errors and omissions (E&O) insurance, is designed to protect businesses that provide expertise or advice, such as consultants and accountants, against claims over:

• Mistakes and oversights
• Incomplete services
• Negligence accusations
• Missed deadlines
• Breach of contract

For instance, if a client blames a management consultant for missing revenue projections or accuses a market research analyst of tabulation errors, E&O insurance will cover their legal expenses, including settlements or judgments.

IT consultants often face additional risks, such as recommending software or overseeing clients’ cybersecurity. Technology errors and omissions (tech E&O) insurance bundles standard E&O with third-party cyber insurance to protect against these industry-specific risks, including:

• Failure to deliver promised IT services
• Data breach lawsuits
• Intellectual property and media liability

Most states legally require you to purchase workers’ compensation coverage when you hire your first employee. This policy covers costs related to workplace injuries and illnesses, including an injured worker’s:

• Immediate medical care, such as emergency room expenses
• Ongoing medical care, including physical rehabilitation
• Disability benefits while the employee is recovering

Workers’ comp policies usually also include employer’s liability insurance, which protects your business if an employee sues over a work injury or illness.

For example, if an excavation company employee gets hurt on the job, workers’ comp would pay for their ER visit and cover the company’s legal defense if the employee sues.

Most states require you to carry commercial auto coverage if your business owns vehicles. This policy covers property damage, medical expenses, and legal bills if a business is involved in an accident.

If you or your employees use any personal, leased, or rented vehicles for work, you need hired and non-owned auto insurance (HNOA), since most personal policies won't cover work-related activities.

Cyber liability insurance protects your business from the high costs caused by data breaches and cyberattacks. There are two types of cyber coverage: first-party coverage and third-party coverage.

First-party cyber insurance handles costs related to a cyberattack that directly impacts your business, such as:

• Data breach response efforts, including customer notification costs
• Ransomware payments to meet cyber extortion demands
• Crisis management support

Third-party cyber insurance covers legal costs when a client sues your business for failing to prevent a data breach or cyberattack at their company. These costs can include attorney's fees, settlements, or judgments.

Commercial property insurance helps your business recover from theft, fires, storms, and other incidents that damage or destroy business property. It covers your building and its contents, including:

• Inventory
• Furniture and fixtures
• Tools, equipment, and electronics
• Broken windows and structural damage
• Exterior signs and fencing

For example, if a thief breaks into a tech company's office, commercial property insurance will cover the cost of replacing their stolen PCs, laptops, and monitors.

A business owner’s policy (BOP) bundles general liability insurance and commercial property insurance to protect your small business against common liability risks, such as slip-and-fall lawsuits, and stolen or damaged business property. and stolen or damaged business property.

A BOP is typically cheaper than purchasing each policy individually and is highly recommended if your business has a physical location, interacts with the public, or owns physical assets like inventory, equipment, or furniture. This typically includes:

• Retail stores
• Restaurants and cafes
• Wholesalers and distributors
• Hair salons and day spas

If your business is forced to temporarily close due to a fire or other catastrophic event, business interruption insurance covers your financial losses so you can stay afloat while you recover. These costs can include:

• Lost income
• Rent or lease payments
• Relocation costs
• Employee wages

Let's say a pipe bursts at a clothing manufacturing plant, destroying walls, carpeting, furnishings, and equipment. Business interruption insurance would help the factory cover payroll, loan payments, and other expenses during the three months while the plant is closed for repairs.

Tools and equipment insurance, also called inland marine insurance, pays for the repair or replacement of tools and equipment that are lost, stolen, or damaged in transit or at a jobsite.

Tools and equipment coverage is highly recommended for businesses that haul equipment or tools to different worksites, including:

• General contractors and other construction trades
• Landscaping companies
• Photographers and videographers

Running a small business out of your home or having remote employees working from home exposes your business to new risks that likely won’t be covered by your homeowner’s insurance or renter’s insurance policy, such as:

Workers' compensation insurance is required by almost every state when you have employees, including remote workers. Even if you're not legally required to carry a policy, it's highly recommended, since having remote workers limits your control over the safety of their workspace.

If a remote employee gets hurt while they’re doing work-related activities, workers’ comp can help pay for:

• Medical bills
• Lost wages
• Disability benefits

For example, if a remote employee develops carpal tunnel after long hours of typing at an improperly set up home workstation, workers' comp will cover medical treatment and rehabilitation costs.

Working remotely increases your risk for cyberattacks and data breaches—especially when your employees use their personal computers or an unsecured Wi-Fi connection to work.

Establishing strong cybersecurity policies, providing remote employees with company devices, and training workers on how to spot phishing attempts are all solid ways to reduce cyber threats.

In addition, cyber insurance can help protect your business against the substantial financial losses caused by a cyber event, including:

• Credit monitoring and other data breach response measures
• Recovering compromised data, including ransom payments for cyber extortion
• Cybersecurity specialist services to restore affected systems
• Hiring public relations services to manage any bad publicity

Having business personal property (BPP) insurance is crucial to protect company-owned equipment located off-site. A BPP policy covers lost, damaged, or stolen business property you provide to your remote employees, such as:

• Office supplies and furniture
• Computers, monitors, and other devices
• Heavy equipment and machinery
• Business inventory

If your remote employees drive personal, leased, or rented vehicles to visit clients, pick up supplies, or handle other work-related tasks, you'll need hired and non-owned auto insurance.

Commercial auto insurance doesn't cover leased or personal vehicles used for business purposes. And most personal insurance policies won't cover work-related use in your own car.

Before you buy anything, it’s important to understand what an insurance policy actually covers. If a customer slips and falls on your shop floor, equipment is stolen from a jobsite, or a client accuses you of negligence, you want to make sure your policy will handle claim-related costs.

Here are some key questions to ask your insurance agent:

• What events trigger coverage?
• What documentation is required?
• Are legal defense costs included?
• Are subcontractors covered?
• Are customer lawsuits covered?
• Are data breaches covered?

On top of knowing what protections are included in a policy, you also should know what’s excluded. Not knowing your exclusions can be a pricey mistake, especially if your claim is unexpectedly denied and you’re stuck with the bill.

Some of the most common exclusions include:

Most standard commercial property and business owner’s policies exclude damage caused by floods and earthquakes. These natural disasters are considered catastrophic risks due to the large amount of damage they can cause.

Businesses located in high-risk areas can purchase earthquake coverage as a specialty policy or as a specialized endorsement added to a commercial policy. You can also purchase parametric insurance to protect your business against named perils, like wildfires, earthquakes, and storms.

Insurance policies are designed to cover accidental or unexpected losses, not purposeful ones. If a business owner or employee intentionally causes harm or files a fraudulent claim, the insurer will most likely deny it.

This applies to deliberate acts that result in:

• Business or third-party property damage
• Bodily injury of an external party or employee
• Stolen or lost property

A prior acts exclusion means a policy won’t cover claims for incidents, wrongful acts, or negligence that occurred before a policy’s retroactive date. This type of exclusion can be found on claims-made policies, such as professional liability insurance and directors and officers (D&O) insurance.

Prior acts insurance, also called nose coverage, extends your new claims-made insurance policy backward, covering you back to your policy’s retroactive date.

A standard general liability policy typically excludes claims over professional advice or services rendered. Businesses that provide expertise or recommendations need to purchase errors and omissions (E&O) insurance, also called professional liability insurance, to fill this coverage gap.

Most standard general liability and commercial property policies exclude dishonest acts committed by employees, including:

• Stealing company inventory or equipment
• Taking money from the cash register
• Embezzling company funds and forging checks
• Stealing client property

Employee dishonesty insurance protects your business and your clients against theft and other financial losses caused by your employees.

Fidelity bonds protect your clients from employee theft, directly reimbursing them for the amount that was stolen. Tech businesses and independent contractors often need fidelity bonds to comply with client contracts.

Most general liability policies won’t cover ransomware, data breaches, and other cyber threats. Purchasing cyber liability insurance will provide your business with financial protection against the extensive costs a cyberattack can cause.

Many factors can help you determine how much coverage you really need. Here's what to look out for as you compare insurance policies to find the best fit for your small business:

Your policy limit is the maximum amount your insurer will pay for a covered claim. Once this threshold is reached, you’re responsible for paying the remaining costs out of pocket.

There are two types of policy limits:

• Per-occurrence limit is the total amount your policy will pay on a single claim
• Aggregate limit is the total amount your policy will pay during a policy period

It’s important to select coverage limits that can cover the costs of a potential lawsuit, without buying more than needed. You can determine the right limits by assessing factors such as:

• Industry risk
• Business size
• Business location
• Contractual requirements

One of the most popular small business coverage options is a general liability policy with $1 million per-occurrence / $2 million aggregate limits. However, if your business is in a high-risk field like construction, manufacturing, or healthcare, you probably need a policy with higher limits.

You can also extend your coverage with an umbrella policy, which provides an extra layer of protection across several liability policies. Once your standard policy is maxed out, it covers the remaining balance of the total claim.

To determine your business insurance premiums, these are the key factors that insurers will evaluate:

• Industry
• Payroll
• Revenue
• Claims history
• Vehicles
• Location

Today, there are a handful of additional factors underwriters will consider when pricing your policies:

• Cybersecurity controls
• Climate and weather exposure
• High-risk states
• Remote workforce risks
• AI and data-handling exposure

Whether you're filing a claim or need proof of insurance to win a contract, having an insurer that puts your convenience first is key. Here are some things to consider:

When disaster strikes, it's important to know how smoothly your insurance company will handle the claims process. You should evaluate key details like:

• How easy it is to initiate a claim
• How quickly they typically resolve and pay out claims
• How they handle, investigate, and settle claims
• How they communicate claims decisions

Before committing to a carrier, you'll want to know how they're going to make life easier for you, namely:

• Can you get quick policy quotes online?
• What sort of digital policy management tools do they provide?
• Do they provide digital certificates of insurance (COIs)?

Insureon's application process is quick, painless, and completely online. You can compare quotes online from multiple top-rated insurance providers, talk with a licensed agent, and get same-day COIs for most policies.

As your business evolves, your risks will change. It’s important to review your coverage annually to ensure you have the right coverage in place. Your insurance needs will change if your business:

• Hires employees or subcontractors
• Buys expensive equipment and tools
• Starts signing larger contracts
• Relocates or adds new locations
• Gets new locations
• Buys cars, vans, trucks, or other business vehicles
• Has significant revenue growth
• Expands service or product offerings
• Starts storing customer data

Digital insurance platforms and insurance agents both provide major benefits for your small business.

Buying business insurance online offers:

• Faster quotes
• Multiple carriers
• Easier pricing comparisons
• Digital COIs

Working with a licensed insurance agent can help you:

• Identify exclusions
• Review contracts
• Choose policy limits
• Understand endorsements

Most small businesses find the most success using both. Insureon offers the convenience of a digital platform and the expertise of licensed insurance agents, putting all of your policy management needs in one place.

Get free, customized insurance quotes online with one easy online application. Insureon helps small businesses secure affordable insurance coverage from top-rated U.S. insurance carriers.

You can also speak with a licensed insurance agent to determine the right coverage limits for your company. Once you find the right policies for your small business, you can begin coverage in less than 24 hours and get a certificate of insurance (COI) for your small business.