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Frequently asked questions about business insurance

We’ve compiled the most frequently asked questions to help you compare policies and decide which insurance is right for your small business.

Business insurance requirements and coverage

What is business liability insurance?

Business liability insurance is any commercial insurance that involves a business’s responsibility for losses, injuries, or damages. Types of liability insurance include:

Learn more about business liability insurance.

Why do I need business insurance?

Business insurance, also called commercial insurance, provides crucial protection for any small business. If there’s an accident at your business, you could face a lawsuit. The high cost of litigation, medical bills, and property damage claims is the primary reason businesses need insurance.

The risks you face determine which policies you need. The policy most businesses purchase is general liability insurance, which protects against customer injuries and other common accidents. You may need additional policies if you have employees, own a building, own a business vehicle, or provide expert advice.

Learn more about why a business might need liability insurance.

What does business insurance cover?

No single insurance policy covers everything. In general, there are two broad areas of coverage:

Learn more about what business insurance covers.

Is business insurance required by law?

In certain cases, business insurance is required by law. Most states require businesses with employees to obtain workers’ compensation insurance. Business-owned vehicles must be insured with commercial auto insurance.

State laws may also require some businesses to obtain insurance as part of the licensing process. For example, bars typically need liquor liability insurance as a prerequisite for a liquor license.

What types of business insurance do I need?

There are several situations in which businesses are required to obtain commercial insurance. For example, most states require businesses with employees to purchase workers’ compensation insurance. Business-owned vehicles must be covered by commercial auto insurance.

While it’s not required by law, general liability insurance is often included in the terms of a commercial lease or client contract. Learn more about the types of business insurance.

Business insurance costs

View video transcript.

Get covered cost effectively and give back to business with Insureon. Insurance isn't as expensive as you might think.

The right policies can handle lawsuits or workers comp claims saving you thousands of dollars. From general to cyber liability, your costs are based on your type of business, number of employees and location.

Insureon helps you compare policies with the best rates from A plus carriers and our expert brokers will get you covered the same day.

Start your application now, it's easy. Protection is peace of mind.

How much does business insurance cost?

Business insurance costs vary based on the policies you purchase and your coverage limits. Other factors include your industry, number of employees, revenue, and location. Small, low-risk businesses – especially those that qualify for a business owner’s policy (BOP) – pay less for insurance than larger companies.

Insureon can help you get cheap business insurance that meets the unique needs of your small business through our online application. You can compare quotes from top-rated insurance carriers, select policies, and begin coverage in less than 24 hours.

How can I save money on business insurance?

Getting insurance coverage through Insureon is one of the easiest ways to save money.

With Insureon, you can compare multiple quotes from top U.S. carriers with our online application and then select the policies that you need at the most affordable price. Insurance agents are available to help you walk through your different options and choose the right coverage for your small business. Once you select your policies, you can begin coverage that very same day.

You can also contact insurance companies directly and request rates, but you’ll have to provide your business details each time you apply.

Is business insurance tax deductible?

Business insurance is considered one of the costs of doing business. That means you can deduct insurance premiums that serve a business purpose, such as your premium for general liability insurance or professional liability insurance.

Find out more about when business insurance is tax deductible.

Purchasing business insurance

How can you get a certificate of liability insurance with Insureon?

You can buy a policy online and get a certificate of liability insurance with Insureon in three easy steps:

1. Complete an online application

Complete Insureon’s free online application, which asks for details about your business. It takes only a few minutes to complete. You’ll receive quotes from top-rated U.S. carriers when you finish the application.

2. Compare quotes and choose a policy

Compare your quotes and choose a policy that provides your desired amount of protection and fulfills the requirements of your commercial lease or client contract. At this point, you can chat with a licensed Insureon agent to make sure the policy contains everything you need.

3. Pay for your policy and download a certificate

Pay for your policy or sign up for a payment plan. After the policy is issued, you can download a certificate of insurance. The certificate will include:

  • Insurance provider
  • Policy type
  • Policy limits
  • Any additional insureds (a client or partner may request this)

View a sample ACORD 25 form: certificate of liability insurance [PDF] or learn more about how to get business insurance.

How much does a certificate of liability insurance cost?

A certificate of insurance is free. Much like a receipt, the document is proof that you’ve paid for a policy and you’re insured.

The cost of the policy depends on the type of insurance, your policy limits, and business factors, such as revenue and number of employees. See our small business insurance cost analysis for details about insurance costs.

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General liability vs. workers’ compensation insurance

General liability and workers’ compensation insurance can both cover medical costs when someone is injured at your business.

General liability covers non-employee injuries, such as a client tripping in your office. Workers' comp covers employee injuries, such as a lifting injury or an employee slip-and-fall accident. You may need to purchase workers' compensation to fulfill your state's requirements.

Professional liability vs. general liability insurance

Professional liability and general liability insurance both offer financial protection against lawsuits.

Professional liability insurance covers the cost of a lawsuit if a client sues your business over the quality of your professional services. That includes lawsuits over missed deadlines, errors, and oversights. Consultants, professional service businesses, real estate professionals, and other experts likely need this coverage.

General liability insurance pays for lawsuits related to third-party bodily injuries, property damage, and advertising injuries (libel, slander, and copyright infringement). Most businesses should strongly consider general liability insurance, especially retailers and others who engage with the public.

General liability vs. business owner's policy

Both general liability insurance and a business owner's policy provide basic protection for your business.

General liability insurance covers the cost of common third-party lawsuits, such as a client slip-and-fall injury in your office. A business owner's policy bundles general liability with commercial property insurance, which pays for repair or replacement of business property that is damaged, stolen, or destroyed.

A BOP costs less than purchasing each policy separately. However, only small, low-risk businesses are eligible.

Commercial auto vs. hired and non-owned auto insurance

Commercial auto insurance and hired and non-owned auto insurance (HNOA) both provide financial protection against lawsuits if you or an employee gets into a vehicle accident. Commercial auto insurance can cover vehicle damage and theft, as well.

Commercial auto insurance covers business-owned vehicles, while HNOA covers personal, leased, and rented vehicles driven for business purposes. Most states set minimum requirements for commercial auto insurance coverage. HNOA is recommended, but not required.

See more comparisons.

Insurance agent vs. broker

When comparing policies, it's also important to make sure that you have the right insurance partner to help you find the coverage you need.

Insurance agents and brokers are both licensed professionals who act as intermediaries between insurance buyers and the insurance market, and can offer coverage quotes for different policies.

However, there are two key differences between agents and brokers:

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

Brokers can search for policies from multiple different carriers, while an agent must sell policies from one or more of the insurance providers that they represent.

Other frequently asked policy questions

Updated: March 18, 2024
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