Small Business Insurance Definition

The "Legal-Ease" Glossary
Small Business Insurance

Insurance protection designed specifically for the risks of freelancers, independent contractors, and owners of small businesses.

While most kinds of small business insurance are not legal requirements of running a business, many business owners find that they need certain policies in order to operate. For example, landlords frequently require that small-business tenants carry a certain amount of Property Insurance and General Liability Insurance.

In addition, clients of small businesses may require that the business have an active General Liability or Professional Liability policy. In many cases, clients will not sign contracts with businesses that lack basic liability protection.

There are two main types of small business insurance: property and liability. The former protects the physical space in which the business operates as well as the equipment, gear, and inventory that the business owns or rents. The latter protects the business against instances where it might have liability (legal responsibility) for an event, as when a customer slips and is injured on the business property.