What Insurance Do I Need for a Small Business?

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11 Types of Insurance Needed for Small Businesses

what insurance do you need for a small business? What insurance do you need for a small business? We hear this question often, but there’s not a simple answer. That’s because the types of business insurance coverage that you need for your small business depends on what your company does and the state you’re in. In fact, state laws require some small business insurance policies and it’s up to you to make sure you have the right coverage.
Without the right types of small business insurance, you may have to pay out of pocket for claims. Many small businesses don’t have the resources or capital to cover claims, which means they may not survive. That’s why small business insurance is an important investment for protecting your company.
The 11 most common types of insurance that small businesses need are:

1. General Liability Insurance

General liability insurance helps protect your business from claims that it caused bodily injury or property damage to someone else. For example, if a customer slips in your store, this coverage can help pay for their medical expenses.
Many small business owners also get a general liability insurance policy that includes product liability insurance. This can help protect their company from claims of bodily injury or property damage that their products cause.

2. Professional Liability Insurance

professional liability insurance helps cover claims related to mistakes in the professional services that your business provides. Let’s say your accounting firm makes a mistake on a customer’s financial statement and they have to pay a penalty. If they sue your business, professional liability insurance can help cover your legal costs. Investing in this coverage can help you save money in claims costs. This coverage is also known as errors and omissions insurance or E&O insurance.

3. Business Income Coverage

Business income coverage, also known as business interruption insurance, can help replace lost income if you can’t operate because of covered property damage. This includes damage from fires, storms or theft. 

4. Commercial Property Insurance

Commercial property insurance helps protect your owned or rented building and equipment used to operate. So, if someone breaks into your building and steals your business computers, commercial property insurance can help cover the replacement costs.

5. Workers’ Compensation Insurance

Workers’ compensation insurance provides benefits to employees if they get a work-related injury or illness. For example, if an employee gets carpal tunnel syndrome from years of typing and poor ergonomics, this insurance can help pay for their treatment costs. Most states require businesses to have this coverage if they have employees. 

6. Commercial Auto Insurance

Commercial auto insurance helps cover property damage and bodily injury claims if you or an employee gets into an accident while driving a company-owned vehicle for business. So, if your employee swerves off the road while making a delivery and hits a mailbox, this insurance can help pay for the damages.

7. Data Breach Insurance

Data breach insurance helps your business respond to a breach if personally identifiable information gets lost or stolen. It can help cover your costs to:
  • Notify impacted customers or clients
  • Run a public relations campaign to improve your business’ reputation
  • Offer credit monitoring services
Some insurance companies may call this coverage cyber liability insurance.

8. Commercial Umbrella Insurance

Commercial umbrella insurance extends the limits of certain liability policies that your business has. So, if a claims cost exceeds your policy’s limits, commercial umbrella insurance can help cover the difference.

9. Employment Practices Liability Insurance

Employment practices liability insurance, also known as employers’ liability insurance, helps protect your business from employment-related claims. This includes claims of:
  • Discrimination
  • Sexual harassment
  • Wrongful termination

10. Business Owner’s Policy (BOP)

Business Owner’s Policy (BOP) is one of the most popular types of insurance. It combines:
  • General liability insurance
  • Commercial property insurance
  • Business income insurance

11. Hazard Insurance

Small business hazard insurance is another name for commercial property insurance. It helps protect the owned or rented business property, like your building and equipment.

Do I Need Liability Insurance for My Small Business?

insurance needed for small business The quick answer is yes. Most businesses need small business liability insurance. But there are several different types of liability coverage to choose from. The most common are general liability and professional liability.
Getting the right business insurance coverage isn’t any different than protecting your home with homeowners insurance – they’re both some of the most important investments you’ll ever make.
To learn more about the business insurance coverage you should have, get a quote today. 
We make it easy for you to customize your small business insurance policy to get the coverage you need.

What Insurance Do I Need To Start My Own Business?

When you’re starting your own business, some types of coverage you should make sure to have are:
  • General liability insurance
  • Professional liability insurance
  • Workers’ compensation insurance
The actual types of insurance and whether you need additional coverage depends on what your company does and the state laws where you are.

Do All Small Businesses Have Insurance?

If you’re still wondering, “Do I need insurance for my small business?” The answer is yes. Most small businesses need some type of coverage for protection from various risks, like:
  • Bodily injury
  • Property damage
  • Car accidents
  • Lawsuits
Without coverage, you’ll have to pay out of pocket for claims reported against your business. Having to pay these costs out of pocket can cause severe financial losses that can shut down your business. We have been helping small businesses like yours for over 200 years, making sure you get the kind of coverage you need. Let us help make sure you’re protected. Get a small business insurance quote today.
The Hartford shall not be liable for any damages in connection with the use of any information provided on this page. Please consult with your insurance agent/broker or insurance company to determine specific coverage needs as this information is intended to be educational in nature.
The information contained on this page should not be construed as specific legal, HR, financial, or insurance advice and is not a guarantee of coverage. In the event of a loss or claim, coverage determinations will be subject to the policy language, and any potential claim payment will be determined following a claim investigation.
Certain coverages vary by state and may not be available to all businesses. All Hartford coverages and services described on this page may be offered by one or more of the property and casualty insurance company subsidiaries of The Hartford Financial Services Group, Inc. In TX, this insurance is written by Sentinel Insurance Company, Ltd., Hartford Casualty Insurance Company, Hartford Lloyd’s Insurance Company, Property and Casualty Insurance Company of Hartford, Hartford Underwriters Insurance Company, Twin City Fire Insurance Company, Hartford Accident and Indemnity Company and Hartford Fire Insurance Company. In Arizona, New Hampshire, Washington and California, the insurance is underwritten by Hartford Accident and Indemnity Company, Hartford Casualty Insurance Company, Hartford Fire Insurance Company, Hartford Insurance Company of Illinois, Hartford Insurance Company of the Midwest, Hartford Lloyd’s Insurance Company, Hartford Underwriters Insurance Company, Maxum Casualty Insurance Company, Maxum Indemnity Company, Navigators Insurance Company, Navigators Specialty Insurance Company, Pacific Insurance Company, Property and Casualty Insurance Company of Hartford, Sentinel Insurance Company, Ltd., Trumbull Insurance Company and Twin City Fire Insurance Company. The Hartford® is The Hartford Financial Services Group, Inc. and its subsidiaries, including Hartford Fire Insurance Company.
The Hartford® is The Hartford Financial Services Group, Inc. and its property and casualty subsidiaries, including Hartford Fire Insurance Company. Its headquarters is in Hartford, CT.
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