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What is commercial insurance?
Commercial insurance, also known as business insurance, financially protects your business from common risks such as client lawsuits, customer or employee injuries, property theft and damage, as well as other unexpected events.
There are two main types of commercial insurance. Commercial property insurance helps pay for business property damage or loss, and business liability insurance helps cover the cost of lawsuits brought against your business. Other insurance policies and coverage options are available to address industry-specific risks.
Commercial insurance is a great safeguard for protecting your personal finances as well as your business investment. It will protect you from several types of risk, including:
- Property theft or damage
- Employee injuries
- Business income losses
- Natural disasters
Small business insurance can't prevent every possible problem that may arise, but the right coverage can protect you against most of the common risks and liabilities that small businesses face.
What are the most common types of commercial insurance?
These are some of the most common policies for small businesses.
General liability insurance
General liability insurance covers common third-party risks such as customer injuries, customer property damage, and advertising injuries. It’s often required for leases and contracts.
BEST FOR
- Clients accidents and injuries
- Damage to customer property
- Advertising injury lawsuits
Errors and omissions insurance (E&O)
This policy is also called professional liability insurance. It covers legal expenses if a client sues your business over unsatisfactory results, errors, or delayed work.
BEST FOR
- Work errors and oversights
- Accusations of negligence
- Missed deadlines
Business owner’s policy
A BOP bundles commercial property insurance and general liability insurance in one plan. It’s often the most cost-effective type of business insurance for small businesses.
BEST FOR
- Customer bodily injuries
- Damaged business property
- Business interruption incidents
Cyber insurance
Cyber insurance protects your small business against the financial impact of data breaches and cyberattacks. It's sometimes called cyber liability insurance or cybersecurity insurance.
BEST FOR
- Data breach lawsuits
- Client notification expenses
- Fraud monitoring costs
Commercial auto insurance
Commercial auto insurance covers your company-owned commercial vehicles in the event of accidents or injuries, as well as theft, vandalism, and other damages.
BEST FOR
- Car accidents
- Vandalism and theft
- Weather damage
Workers’ compensation insurance
Workers’ compensation insurance is required in almost every state for businesses that have employees. It can cover medical costs for work-related injuries.
BEST FOR
- Employee medical expenses
- Disability benefits
- Lawsuits from work injuries
Looking for different coverage? See more policies.
Find the right insurance coverage for your business
View video transcript.
As a small business owner, you know it’s important to work with first-rate carriers when it comes to choosing the best small business insurance. With Insureon, you'll get free quotes from top-rated insurers. And our expert agents can answer any questions you have.
While every small business is different, many companies share similar risks. Insureon offers the best business insurance coverage at affordable costs.
Most small businesses require general liability insurance for common business risks, such as bodily injury and customer property damage.
For businesses looking to save money, a business owner's policy, or BOP, bundles general liability coverage and commercial property insurance into one policy.
Unhappy clients? Professional liability insurance, also known as errors and omissions, helps cover your legal expenses in event of a lawsuit.
Required in most states, workers’ compensation insurance assists with work-related injury costs and lost wages.
Do you handle customer data and information? Cyber liability insurance covers financial losses resulting from data breaches and cyberattacks.
If your business owns vehicles, then you probably need commercial auto insurance. It’ll cover legal bills, medical expenses, and property damage to company-owned vehicles.
With so many companies offering nationwide coverage, there's no shortage of insurance options. Insureon can help match you with the right A-rated insurance providers. Insureon is your number one marketplace for small business insurance.
What kinds of businesses need commercial insurance?
Any small business owner could benefit from commercial insurance, including independent contractors and freelancers. Accidents, lawsuits, and injuries can happen in any workplace, which is why it's important to secure protection even when insurance isn't required by law.
While all small businesses would benefit from having insurance, a company's insurance needs will vary based on the type of business.
For example, small businesses that deal with expensive equipment or sensitive medical information may want to consider additional coverages, such as contractor's tools and equipment insurance or medical malpractice coverage.
How much does commercial insurance cost?
The cost of commercial insurance is typically quite affordable, particularly for low-risk industries. These are the average monthly costs for the top insurance policies:
General liability insurance: $42 per month
Professional liability / E&O: $61 per month
Workers' comp: $45 per month
Policy costs are calculated based on a few different factors, including:
- Number of employees
- Industry risk
- Coverage limits
- Annual revenue
- Claims history
What types of commercial insurance are required in my state?
Each state has different requirements for the types of insurance required for small businesses. Common types of required insurance include workers' compensation insurance and commercial auto insurance.
Certain industries, such as real estate and construction, may have additional insurance requirements based on where they operate. To get an idea of your state's unique insurance requirements, enter your state below.
Find business insurance requirements in your state
Select your state to learn about insurance requirements for your small business.
How do I get commercial insurance for my business?
Contact an insurance company or an insurance agent, such as one of Insureon's licensed agents. The agent can discuss insurance options based on your business needs and provide quotes for policy premiums. You can speak with your agent about the costs of insurance, as well as any questions you have about the different types of policies available.
If you already know what kind of insurance you need, you can fill out Insureon's free online application to get quotes from top-rated insurers. You can buy coverage online and get a certificate of insurance usually within 24 hours.
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FAQs about commercial insurance
Review answers to frequently asked questions about commercial insurance.
How do I decide on which commercial insurance coverage I need?
Your insurance agent can help you determine the right coverage and how much insurance your business needs based on your business type, the amount of business personal property you have, and other factors. You'll need to ensure your coverage meets any requirements set by state laws, your clients, or your industry.
Read more about what types of insurance you might need.
What is the difference between commercial and personal insurance?
The difference between personal and commercial insurance can get confusing, especially when certain commercial policies cover things like bodily harm and injury. So, what's the difference? Commercial insurance covers accidents, mishaps, and other incidents that occur while working, using company property, and on the job site. Personal insurance covers everything else.
If your business property, employee, or client experiences an accident, injury, problem, or event during business operations, it will be covered by commercial insurance. Many types of insurance cover different aspects of running a business, such as commercial automotive insurance, commercial property insurance, and even cyber insurance.
Personal insurance covers non-work related accidents, illnesses, and injuries, such as a cold or flu or a broken arm from a fall at home. There are non-medical types of personal insurance as well, including personal auto, life, and property coverage insurance.
What happens if I need to file a claim?
Contact your insurance agency. They will investigate your claim, assess the damage, and inform you of the next steps. If your claim is approved, it will be subject to any out-of-pocket deductible and coverage limits included in your policy.
If someone sues you for financial damages covered by your insurance, your insurance provider will likely connect you with an attorney to represent you in court or settle a claim.
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