Types of Business Insurance (2024)

The Right Types of Insurance for Businesses

There are many types of insurance options out there that business owners can get. Insurance helps protect your company from different risks that can come up during normal operations. Choosing what business insurance(sometimes called commercial insurance) you need can seem overwhelming, but we’re here to help.

Many business owners start with a Business Owner’s Policy(BOP) for their small business insurance needs. It combines three essential coverages:

• General liability insurance
• Commercial property insurance
• Business income insurance

We made our BOP customizable, so you can add other business insurance coverages to get more protection. For example, if your business provides a professional service to customers, you may want to get a professional liability insurance policy. It can help protect your business from claims that it made a mistake in the professional services given.

We know every business is different. That’s why we’re here to help you get the right types of business insurance.

8 Types of Insurance Policies for Small Businesses to Consider

You may have to get different types of insurance depending on the industry you’re in. That’s because every business faces unique challenges and risks.

While there are many types of insurance that you can get, read about eight policies that many small businesses can get to help protect them from a variety of risks.

1. General Liability Insurance (GLI)

• Bodily injury to someone else
• Property damage to another person’s belongings
• Personal injury, like libel or slander

2. Commercial Property Insurance

Commercial property insurancehelps protect your owned or rented building and equipment that you use to run your business.

Be aware that this insurance doesn’t cover damage from earthquakes or floods. You’ll likely have to get a separate policy, like commercial flood insurance, to help protect your business from these kinds of claims.

3. Business Income Insurance

If you can’t run your business because of covered property damage, business income insurancecan help replace your lost income. So, you can use this coverage to help pay for ongoing expenses, like rent, utility bills or payroll. This type of insurance is also known as business interruption insurance.

4. Professional Liability Insurance

Professional liability insurancehelps cover lawsuits claiming that you made a mistake in the services you provided. This type of insurance is also known as errors and omissions (E&O) insurance.

5. Workers’ Compensation Insurance

Workers’ compensation insurancegives your employees benefits if they get hurt or sick from their job. These benefits can help:

• Pay for their medical bills
• Replace most of their lost wages if they miss work to recover
• Cover funeral costs if they lose their life due to a work-related injury or illness
• Pay for ongoing care, like physical therapy

Most states require businesses with employees to carry workers’ compensation insurance. You can face fines, penalties and criminal charges if you don’t comply with your state’s law.

6. Data Breach Insurance

Data breach insurancehelps your business respond to a data breach if personally identifiable information gets lost or stolen. Some insurers may call this coverage cyber insurance.

Data breach insurance can help pay your costs to:

• Notify impacted individuals
• Offer identity theft monitoring services
• Create a public relations campaign

7. Commercial Umbrella Insurance

Commercial umbrella insuranceextends the coverage limits for some of your liability policies. So, if a claim exceeds the limits on your policy, your umbrella insurance can help cover the difference.

8. Commercial Auto Insurance

Commercial auto insurancehelps protect you and your employees on the road if you drive company-owned vehicles for business. It can help cover property damage and bodily injury claims from an accident your business causes. This is important because a personal car insurance policy won’t help cover third-party claims in an accident you cause with a business-owned vehicle.

What Different Types of Insurance Are Small Business Insurance Requirements?

Depending on your type of business and where you are, the law may require you to carry certain types of insurance. For example, most states require employers to have workers’ compensation insurance. Some states have laws for business insurance by industry. For example, accountantsmay have to get professional liability insurance.

It’s important to make sure you’re familiar with your state business insurancelaws. You can work with an insurance agentto make sure you’re complying with regulations. They can help you customize an insurance policy that fits your needs and budget.

Get Recommendations on the Types of Business Insurance You May Need

Regardless of the size of your business and any industry trends, business insurance coverage is important. It can give startups a good foundation when they open their doors for the first time. And it’s important for experienced business owners too, because depending on your business and your types of insurance, policy needs may change over time.

We’re an insurance company backed by more than 200 years of experience and we’ve helped more than 1 million small business owners. Our specialists want to do the same for you. We can work with you to get the types of business insurance your company needs. Get a business insurance quote today and learn how we can help you.