Starting a small business is exciting, but it also comes with risks. From lawsuits to property damage, even one unexpected incident can threaten everything you’ve built. That’s why having the right business insurance for small business is crucial.
This article will walk you through the basics of business insurance, the essential policies every business owner should consider, and how to choose coverage that fits your needs and budget.
Why Small Businesses Need Insurance
Small businesses often operate on tight margins, which makes them more vulnerable to financial losses. The right insurance can help you:
- Replace stolen or damaged equipment
- Cover medical bills if someone is injured at your business
- Defend against legal claims
- Resume operations quickly after a disaster
Types of Business Insurance to Consider
Here are the most common types of coverage for small businesses:
1. General Liability Insurance
Protects against bodily injury, property damage, and advertising-related claims.
2. Professional Liability (Errors & Omissions)
Ideal for service-based businesses. Covers legal claims related to mistakes or poor advice.
3. Business Owner’s Policy (BOP)
Bundles general liability and property insurance, often at a lower rate.
4. Workers’ Compensation
Required if you have employees. Covers workplace injuries and lost wages.
5. Commercial Auto Insurance
Covers vehicles used for business operations.
6. Cyber Liability Insurance
Protects against data breaches, ransomware, and other digital threats.
Choosing the Right Coverage
To choose the best business insurance for small business, consider the following:
- Business type and industry (e.g., restaurant vs. software firm)
- Location risks (crime rates, natural disasters)
- Number of employees
- Client requirements (some contracts require specific coverage)
Need help choosing? Start by reading our Car Insurance Deductible Guide.
What It Might Cost
Business insurance costs vary based on your:
- Industry
- Claims history
- Number of employees
- Revenue and assets
A basic general liability policy may cost around $50/month. A BOP might range from $75–$120/month. Always get multiple quotes before purchasing.
Ways to Save on Business Insurance
- Bundle policies with one insurer
- Raise your deductible for lower premiums
- Improve safety protocols and reduce risks
- Reevaluate your policy every year as your business grows
Mistakes to Avoid
- Skipping required coverages (like workers’ comp)
- Choosing price over protection
- Not updating your coverage as your business changes
Conclusion
No matter your business type, having the right business insurance for small business is essential. It protects your company’s future, helps you recover from setbacks, and builds trust with customers. Take the time to assess your needs and invest in policies that offer true peace of mind.