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Why do I need business insurance?

Every business can benefit from having commercial insurance, and some policies are required by law.


Whether you're freelancing to make some extra cash, bootstrapping your small business, or expanding your company with new employees, you can benefit from business insurance.

It's easier than ever to be a business owner, and you might technically be considered one even you only have a small side hustle in addition to a full-time job with an employer. Working for yourself means a lot more freedom, but it also exposes you to certain risks unique to business owners.

The good news: small business insurance can protect you from those risks.

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Why business insurance is important

Insurance can save you from financial catastrophe if something goes wrong, but even when things go right, business insurance can power your growth. Specifically, the right policies can help you:

Sign commercial leases

A lot can go wrong when you own a building. That's why landlords typically want their tenants to carry general liability and property insurance. In fact, most landlords require proof of insurance before they'll rent you a commercial space. Learn more: Why your commercial lease requires insurance.

Win more clients

The bigger a client, the more likely they are to have you sign a contract. That contract will often require you to carry errors and omissions insurance (also called professional liability insurance in some industries). This business insurance is important because it can cover professional mistakes made by you or an employee that negatively impact your clients. Maintaining active insurance means you're one step closer to signing your next client.

Comply with state laws

Businesses that have employees are required to carry workers' compensation insurance in almost every state. Regardless of the laws where you live, it's smart to invest in coverage that can pay the bills if your employees are injured on the job. If you have a business vehicle, state laws also require commercial auto insurance.

Handle costly legal bills

Owners of small businesses are often targets for lawsuits. If a visitor has a slip-and-fall accident on your property or you sell a product that hurts someone, you could get sued. The appropriate insurance, such as general liability insurance with product liability coverage, offers lawsuit protection so legal bills don't drain your bank account or force your business to close.

Recover from damage to business property

Just as your homeowner's insurance can pay for repairs and replacements if your home is damaged, commercial property insurance can pay to repair and replace your business equipment and property after windstorms. This policy can also provide coverage for losses related to fire, vandalism, and theft. Most Insureon customers can save money by purchasing property coverage in a bundle called a business owner's policy.

Secure your income

If a fire or other covered property insurance event forces your business to close, business interruption insurance can replace your lost income. This little-known gem is usually part of a business owner's policy and can be the difference between recovery and closure after unexpected events.

Cover data breach damage

Data breaches and cyberattacks have the potential to affect every business. Cyber liability insurance can soften the blow if your business is hit. It helps cover ransom payments to hackers, customer notification costs, and other recovery efforts.

Cover your business driving

Whether you haul tools between worksites or rent cars when you're traveling to meet clients, commercial auto insurance (or hired and non-owned auto insurance) can cover damage and liability just as your personal auto insurance does. If you have a vehicle titled to your business, commercial auto is likely the policy for you. If you or your employees drive personal vehicles for work purposes, hired and non-owned is usually the appropriate choice.

Receive tax deductions

The IRS considers commercial insurance policies that benefit your company a cost of doing business. That means you can deduct the cost of your commercial insurance policies at tax time, provided they serve a business purpose.

Compare quotes from trusted carriers with Insureon

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

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