Business Insurance in California

What are the requirements for small business insurance in California?

California small businesses with employees are required by state law to have workers’ compensation coverage. Any company-owned cars or trucks must have commercial auto insurance. Additional coverage is at the discretion of the business owner. Because California allows someone injured at a business up to two years to file a lawsuit, business owners may be susceptible to legal action long after an incident occurs. For protection against lawsuits, consider commercial liability insurance, such as general liability insurance or professional liability insurance (also known as errors and omissions insurance).

It’s also important to consider commercial property insurance for fire protection and other property risks. Costs for each commercial insurance policy will vary depending on exposure to risk, location, and other factors.

California does not have strict dram shop laws, but if an employee serves an obviously intoxicated minor, your bar can be held liable for resulting damages. Liquor liability insurance provides useful protection for bars, restaurants, and other establishments that sell alcohol.

Insureon is licensed in California, and our agents can help you find the appropriate coverage from top U.S. carriers based on your business operations and location. Start an application for free insurance quotes today.

Learn more about coverage for your profession

Insureon specializes in small business insurance for numerous California professions, whether you’re an IT consultant or run a home-based accounting business.

Don’t see your industry in the list below? Share a few details via Insureon’s online business insurance application to find options for your business. Using industry-leading technology and licensed insurance specialists, Insureon has helped more than 200,000 small businesses get coverage from top U.S. insurance carriers.

Some examples of the professions Insureon covers:

Accountants General contractors Nurses Tax preparer
Architects Hair and beauty Personal trainers Find more professions
Cleaning businesses IT consultants Photo/video  
Dentists Lawyers Real estate  


California small business insurance policies

In a state as large and diverse as California, business insurance needs and costs are unique for each industry and region. Common policies for small business owners include:

General liability insurance

This policy can cover third-party bodily injuries, third-party property damage, and advertising injuries. For example, it can help pay for legal expenses in California courts when:

  • A visitor is injured after slipping on a spilled drink at your restaurant.
  • You accidentally drop a client’s laptop while completing repairs at your home business.
  • A competitor sues your business over a critical review your employee left online.

Commercial property insurance

Commercial property insurance protects commercial real estate and equipment owned by your business. It can cover expenses to repair or replace your property when:

  • An electrical fire destroys your inventory.
  • A windstorm knocks a tree branch through the roof of your office.
  • A thief steals your office equipment.

Professional liability insurance (errors and omissions insurance)

E&O insurance offers lawsuit protection for those who make a living off their expertise. It can help pay for legal expenses when:

  • A client claims you made a design mistake that reduced company profit.
  • Your web development business misses a deadline that puts a project behind schedule.
  • You breach a contract.

Cyber liability insurance

California law requires businesses to notify any California resident whose unencrypted personal information was accessed by an unauthorized person. Cyber liability insurance can help your business manage the cost of data breach recovery by paying for:

  • Data breach notification costs when a cyberattack hacks your point of sales systems and steals customers’ credit card information.
  • Forensic investigation into the cause of a breach.
  • Credit monitoring for customers affected by a breach.
  • Legal expenses if your customers sue you for not preventing the breach.

Business owner’s policy (BOP)

A business owner’s policy helps businesses save money on insurance by bundling general liability and commercial property insurance. Businesses may qualify for a BOP if:

  • A business is considered low risk.
  • Fewer than 100 employees work at the business.

Commercial auto insurance

Businesses are required to have commercial auto insurance for all business-owned vehicles. When you’re involved in an accident, this policy can help pay for:

  • Repairs to the other driver’s car and medical expenses.
  • Legal expenses if you’re sued over the accident.
  • Repairs to your vehicle if it’s damaged by theft, windstorms, or vandalism.

California workers’ compensation insurance

California law requires businesses to carry workers’ comp to cover employee work injuries. For example, this policy can help pay for medical expenses and lost wages when an employee:

  • Slips and falls on a wet floor at your business.
  • Suffers a burn while working at your restaurant.
  • Develops repetitive motion injuries from office furniture that is not ergonomically correct.

California business insurance licensure information

In California, insurance agents, agencies, and brokers are licensed by the California Department of Insurance. Insureon is licensed in California as BIN Insurance Holdings LLC (NPN 15752926; license 0G11129) for property and casualty insurance and for surplus lines. Verify our licensure with the California Department of Insurance License Number Search.