S Corporation (S Corp) Business Insurance

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Why do S corps need business insurance?

Due to the high cost of injuries and lawsuits, an accident could financially devastate your small S corp. Business insurance provides you with peace of mind by covering unexpected medical bills, attorney's fees, and property repairs. State laws, clients, and lenders may require coverage.

What types of coverage do S corps need?

These insurance policies cover common risks faced by S corporations.

General liability insurance icon

General liability insurance

General liability insurance covers the cost of third-party accidents, such as a client who trips and suffers a bodily injury at your S corp's office. It may be required for a commercial lease.

  • Slip-and-fall accidents
  • Accidents that damage client property
  • Libel and other advertising injuries
Professional liability insurance icon

Professional liability insurance

This policy covers legal costs when an S corp that offers professional services makes a mistake that harms a client. It's sometimes referred to as errors and omissions insurance (E&O).

  • Mistakes that cause a client to lose money
  • Missed deadlines
  • Accusations of negligence
Cyber insurance icon

Cyber insurance

Cyber insurance helps S corps recover from data breaches and cyberattacks. It's strongly recommended for businesses that handle credit cards or other personal information.

  • Data breach notification costs
  • Data breach investigations
  • PR costs for reputational harm
Workers’ compensation insurance icon

Workers’ compensation insurance

Workers’ comp shields S corps from work-related medical bills that health insurance might deny. Most states require this coverage as soon as a small business hires its first employee.

  • Medical expenses from employee injuries
  • Disability benefits
  • Lawsuits from employee injuries
Business owner’s policy icon

Business owner's policy

A BOP bundles general liability coverage and commercial property coverage at a discount. It protects S corps against the most common lawsuits and business property damage.

  • Personal injury lawsuits
  • Stolen or damaged business property
  • Business interruption incidents
Errors and omissions insurance icon

Errors and omissions insurance

E&O insurance protects S corps from legal fees related to mistakes, oversights, and missed deadlines. It's sometimes referred to as professional liability insurance.

  • Errors that cause a client to lose money
  • Accusations of negligence
  • Missed deadlines
Commercial property insurance icon

Commercial property insurance

This policy covers repair or replacement costs if property belonging to your S corp is stolen, lost, or damaged. Bundle it with general liability coverage in a BOP for a discount.

  • Fires
  • Storm damage
  • Theft
Commercial auto insurance icon

Commercial auto insurance

A commercial auto policy covers costs when an S corp's business vehicle is involved in an accident. Each state has its own requirements for auto liability insurance.

  • Auto accident injuries
  • Property damage caused by your vehicle
  • Vehicle theft and vandalism
Employment practices liability insurance icon

Employment practices liability insurance

Employment practices liability insurance (EPLI) covers lawsuits filed by employees who say they experienced discrimination, harassment, wrongful termination, or another violation of employee rights.

  • Workplace harassment
  • Discrimination claims
  • Mismanagement of benefits
Looking for different coverage? See more policies.

How much does business insurance cost for S corps?

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S corps and other small businesses often qualify for discounts on business insurance. Factors that affect insurance premiums include your profession, number of employees, and the policy's limits and deductible.

Here are the average costs for top policies sold by Insureon:

General liability insurance: $42 per month
Professional liability: $61 per month
Workers' comp: $45 per month

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Common questions about S corp business insurance

Does an S corp require insurance?

State laws and client contracts may require certain types of coverage for an S corp. Here are a few cases where insurance is crucial for S corps, LLCs, sole proprietors, independent contractors, franchises, and other types of small businesses.

You may need insurance coverage for a contract, loan, or lease. Clients, lenders, and landlords may require you to carry insurance to protect themselves against potential losses. In some cases, they may ask you to list them as an additional insured on your policy.

You may need insurance to comply with the law. Depending on the laws in your state, you may need coverage for a business-owned vehicle, to obtain a license in your field, or to protect against work-related injuries.

You gain client trust by being insured. Even when it's not required, carrying insurance is a sign of professionalism and financial stability. It helps attract clients and can give your S corps an edge over the competition.

Insurance protects your business from catastrophic losses. 43% percent of small businesses have faced or been threatened with a lawsuit, but they often lack the resources that larger companies draw upon to survive a legal battle. Insurance helps your S corp withstand unexpected costs from customer injuries, fires, and other incidents that might otherwise prove devastating.

How do I get a certificate of insurance?

With Insureon, you can get usually get a certificate of insurance on the same day that you apply for quotes. It’s a simple three-step process:

  1. Fill out our easy online application.
  2. Compare free quotes from top-rated insurance providers.
  3. Buy a policy and download a certificate of insurance.

A certificate of insurance will outline the details of your business liability insurance, such as policy limits, deductibles, and any endorsements. It serves as proof of insurance for clients, landlords, lenders, and anyone else who asks whether your business is insured.

Does my profession affect what type of insurance I need?

Yes, the type of work you do can affect which business insurance policies you need.

For example, state laws sometimes require workers' comp coverage for construction contractors even if they work alone, due to the high risk of injury. In some states, real estate agents and brokers are required to carry errors and omissions insurance. Plumbers and landscapers may need a general liability policy to obtain a license.

Manufacturers, retailers, and others involved with products should consider carrying product liability insurance. Often included in general liability insurance, this policy covers liability claims related to harm caused by a product.

Cleaning businesses may need a janitorial bond before a client will allow cleaners onto their property.

It may take a little research to find out which type of business insurance coverage you need, or simply ask a licensed insurance agent.

How can I save money on business insurance for an S corp?

Insurance is usually affordable for small, low-risk S corporations. There are a few ways to find cheaper insurance:

Bundle policies. Many small business owners buy general liability coverage and commercial property insurance together in a business owner's policy, which costs less than purchasing each policy separately. Cybersecurity businesses and other tech companies can often buy a bundle called tech E&O, which includes cyber insurance and errors and omissions insurance.

Shop around. Compare options from different insurance companies to make sure you're not paying too much for insurance. With Insureon, you can get quotes from top-rated providers today with our free online application.

Choose a high deductible. You can customize your insurance policy to save money, such as by choosing a higher deductible or lower policy limits.

Avoid claims. Finally, take steps to reduce your business's risks. Prompt cleanup of spills, the elimination of clutter, and bright lighting can help customers and employees avoid accidents, which helps keep your premiums low.

What other types of insurance do S corps need?

The policies your business needs depend on your specific risks, such as whether you drive for work or provide IT services to clients.

Other coverage options to consider include:

Business interruption insurance: Also called business income insurance, this policy covers loss of business income and operating expenses if your business is forced to close temporarily due to a fire or extreme weather. It can often be added to a business owner's policy.

Hired and non-owned auto insurance: An HNOA policy provides liability protection for an S corp where employees drive their personal vehicles, leased vehicles, or rented vehicles.

Directors and officers insurance: This coverage protects an S corp's board members and officers from lawsuits claiming their decisions resulted in a financial loss.

Commercial umbrella insurance: Umbrella insurance covers legal expenses when the limit is reached on another liability policy, such as general liability or commercial auto insurance. S corporations may need this coverage to meet client requirements for higher liability limits.

Fidelity bonds: Your clients might ask you to carry a fidelity bond, which would reimburse them in the event of employee theft or fraud.

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