Small business insurance policies: How are they different?

Insurance providers sell many different small business insurance policies, each designed for specific risks.

Some policies, like general liability insurance, cover accidents that can happen in any workplace. That includes slip-and-fall injuries, such as a customer slipping on a recently mopped floor and breaking an ankle.

Other policies are more specific. For example, commercial auto insurance is required for businesses that own vehicles. It provides coverage in the event of an auto accident.

Workers' compensation insurance pays for medical expenses from work injuries. Workers' comp is required in most states when you have employees, and also protects sole proprietors against work injury costs that their health insurance might deny.

If you are unsure which policies you need, Insureon's licensed agents can help you.

Most insurance coverage can be broken down into two main categories: property coverage and liability coverage. Small business owners usually need both types of insurance.

Property insurance, also called business hazard insurance, covers your business's property, such as a building, furniture, inventory, tools, or equipment. It helps you recover from fires, weather damage, theft, and vandalism.

Liability insurance provides financial protection in the event of a lawsuit. There are many different reasons for lawsuits against businesses, which is why there are many different kinds of liability insurance policies.

For example, someone might sue your business over a bodily injury, a mistake that caused them to lose money, or failure to prevent a data breach. These would all require a general liability policy, a professional liability policy, and a cyber liability policy, respectively.

Read more about the differences between property insurance vs. liability insurance.

Insureon's licensed agents recommend a business owner's policy (BOP) for small, low-risk businesses.

A BOP bundles general liability insurance with commercial property insurance at a discount. It protects against third-party legal fees for common accidents and the cost of business property damage or loss.

You can often add other coverage options to a BOP, such as business interruption insurance for financial protection against temporary closure.

For a deeper look at how small business insurance works, explore how these different policies compare:

• General liability vs. workers' compensation insurance
• General liability vs. professional liability insurance
• General liability vs. errors and omissions (E&O) insurance
• Business owner's policy vs. general liability insurance
• Business owner's policy vs. commercial package policy
• Tech E&O vs. cyber liability insurance
• Commercial auto insurance vs. hired and non-owned insurance
• Commercial auto vs. personal auto insurance
• Excess liability vs. umbrella insurance
• Employer's liability vs. workers' compensation insurance
• Disability insurance vs. workers' compensation insurance

While both insurance agents and brokers can help offer small business owners insurance quotes on different policies, there are some notable differences between an agent and a broker.

• Agents represent insurers, while brokers represent the client.
• Agents can complete insurance sales (bind coverage), while brokers cannot.

An insurance agent represents one or more insurance companies and can complete an insurance sale for their client, while insurance brokers represent consumers in their search for coverage and can offer policies from multiple different companies, but will need to work with an agent or carrier to complete the sale.

Insureon is both an agency and an insurance brokerage, with licensed professionals in every state. We can help you find a quote, put together an insurance program that fits your risk management needs and are available for questions after we help you find coverage.

Be aware that policies with the same name can differ in terms of coverage and cost. If a policy's premium seems too good to be true, take a closer look. It may have exclusions that leave you defenseless in certain circumstances, a high deductible, or coverage limits that are too low to cover a financial loss.

Most insurance policies have both a per-occurrence limit and an aggregate limit. The per-occurrence limit is the maximum your insurer will pay out on a single incident, while the aggregate limit is the maximum for the policy period (usually one year).

Higher limits cost more, but provide better coverage. A higher deductible means you pay more before you can collect on a claim, but your premium will be lower.

For limits that are higher than average, you may need to purchase commercial umbrella insurance or excess liability insurance. Umbrella insurance boosts the limits on your underlying general liability, commercial auto, and employer's liability insurance. Excess liability insurance increases the limits on one policy, such as errors and omissions insurance (E&O).

Because insurance policies cover different risks, you may need additional coverage for your industry or profession.

For example, accountants, consultants, and others who provide advice or a professional service may need professional liability insurance, also called errors and omissions insurance, to defend against lawsuits over the quality of their work.

Tech companies should consider technology errors and omissions insurance (tech E&O) for financial protection against E&O claims as well as cyber risks.

Some states also have business insurance requirements for certain professions. For example, real estate agents are usually required to carry E&O coverage, and businesses that sell or serve alcohol likely need liquor liability insurance.

Complete Insureon’s easy online application today to compare small business insurance quotes from trusted U.S. insurance carriers. Once you find the right policy for your small business, you can begin coverage in less than 24 hours.