Some commercial insurance policies benefit every business. Others provide protections against risks that only affect certain businesses.
General liability is recommended for all businesses
Every small business needs general liability insurance. This policy provides protection against common customer or client incidents, including bodily injuries, property damage, and advertising injuries. An accident involving a customer can lead to huge legal bills, making this an important policy for any business.
Your business risks determine which other policies you need
Small businesses with valuable property should consider commercial property insurance, which covers your physical assets against loss or damage. If you own a small business in a low-risk industry, you may be able to cut premium costs by combining this policy with general liability insurance in a business owner’s policy.
These policies address your bare-bones exposures. However, you may need additional coverage depending on your industry, location, and operations. For example, most state laws require you to carry workers’ compensation insurance if you have employees. Similarly, all business-owned vehicles must have commercial auto insurance.
Types of liability insurance for small businesses
General liability insurance
Who's blaming you? Customers, delivery people, and other non-employees
For what? Injuries or property damage
What’s covered? Lawyer’s fees, court costs, settlements, judgments
Professional liability insurance
Who's blaming you? Customers and clients
For what? Work mistakes that caused injuries or financial losses
What’s covered? Lawyer’s fees, court costs, settlements, judgments
Workers' compensation insurance
Who's blaming you? Current employees
For what? On-the-job injuries or illnesses
What’s covered? Medical bills, missed wages, death benefits
Cyber liability insurance
Who's blaming you? Customers and clients
For what? Exposing personal information in a data breach
What’s covered? Credit monitoring, notification costs, legal expenses, cyber extortion
Commercial auto insurance
Who's blaming you? Drivers, property owners, or other third parties
For what? Injuries or property damage caused by a business vehicle
What’s covered? Lawyer’s fees, court costs, settlements, judgments
Employment practices liability insurance
Who's blaming you? Current, former, and potential employees
For what? Harassment, discrimination, other violations of employee rights
What’s covered? Lawyer’s fees, court costs, settlements, judgments
Directors and officers insurance
Who's blaming you? Employees, regulators, third parties
For what? Your board or executives misusing funds, failing to meet regulations, or failing to fulfill official duties
What’s covered? Lawyer’s fees, court costs, settlements, judgments
Liquor liability insurance
Who's blaming you? Customers, property owners, or other third parties
For what? Injuries or property damage caused by an intoxicated customer
What's covered? Lawyer’s fees, court costs, settlements, judgments
Insurance recommendations by industry
Your insurance needs depend on the specific characteristics of your small business. Because similar businesses share the same risks, it's helpful to explore insurance recommendations by industry. Select your profession from the list below for details about what kinds of insurance your company might need.
Don't see your profession? Find insurance for other professions.
Find business insurance requirements in your state
Compare and contrast different policies
For an in-depth look at how various small business insurance policies differ, review these comparisons:
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