Small Business Insurance

What is Small Business Insurance, and What Does It Cover? 

An insurance policy for small businesses protects the business’s assets, properties, and income. Insurers Information Institute reports that business owners’ policies (BOPs) are the most common policy for small businesses. Insurance for small businesses offers vital financial protection from various risks, giving business owners peace of mind.

Business owner’s policies (BOPs) include commercial property insurance and commercial liability insurance as part of a package of coverages. It is also possible to have business interruption insurance, which replaces income after a covered loss. Business owners may also need professional liability, commercial auto, or worker’s compensation insurance, which can be purchased separately or added to customize their business plans.

What Does Small Business Insurance Cover?

The types of insurance coverage available to small businesses are outlined below.

  • A general liability insurance policy covers legal expenses, including attorney fees and judgments against your business. Insurance policies for public liability include coverage for damage to reputation, such as libel or slander, and copyright infringement.
  • Liability insurance is used to pay others, not to cover your business. In other words, it’s a type of liability insurance for companies.
  • The items covered by commercial property insurance are computers, workstations, desks, chairs, business records, inventory, and supplies. In addition to protecting the office and building of a business, commercial property insurance can also cover the contents of the office.

A commercial property insurance policy is also called a business property insurance policy.

  • When an employee is injured or sick because of their job, workers’ compensation insurance protects them in several ways. Compensation for lost wages, medical care, and physical therapy are all included in this package. Those who die from work-related illnesses or injuries may be eligible for death benefits.

What Are Some Types of Business Insurance?

There is a wide range of insurance policies available to businesses. Various coverage options are available, from general liability to kidnapping and ransom insurance. Insurers offer a variety of types of coverage, including: Read More

Workers’ compensation insurance provides coverage when an employee is injured. The policy will cover medical bills, disability, and lost income in this scenario. A small business with at least one employee is required to carry this coverage, according to the Small Business Administration (SBA).

  • Among the things that general liability insurance covers are:
  1. Customers or clients who suffer injuries as a result of a company’s negligence
  2. Property damage
  3. Libel and slander

This policy may also cover other types of risks, so read your policy to know what precisely this will provide coverage for.

  • Professional liability insurance provides financial protection for your firm. It is also known as errors and omissions insurance (E&O). Negligence and non-compliance with service standards are examples of professional negligence.
  • Commercial auto insurance, also known as the business auto policy (BAP), provides coverage for the vehicles that your business uses. This policy does not cover your private car if you use it for business purposes, so check your policy for clarification.
  • Commercial property insurance is sometimes referred to as business property insurance. A business insurance policy covers the structure and contents of the building where your business is located. This can include everything from your inventory to your furniture to your documents.
  • The equipment breakdown insurance you need is specific to the equipment you use in your business. Depending on the industry, the computer could be in a law office, or the stove could be in a restaurant. In either case, it covers repairing or replacing the broken equipment.

6 popular small business insurance providers

Small business insurance providers offer varying services and pricing, which makes it challenging to choose an insurance provider. Selecting a company that best meets your needs generally requires weighing your needs, finances, and risks. You can make an informed decision by requesting price quotes from the providers you are considering.

The following is an alphabetical list of six popular small business insurance providers you may want to consider.

1. Liberty Mutual

Regarding property and casualty coverage, Liberty Mutual ranks sixth in the world. Although they’re mostly known for property and auto insurance, they also offer:

  • Compensation for workers’ injuries
  • Commercial vehicles and fleets
  • Liability for the environment
  • A breakdown of equipment is required
  • In excess and surplus
  • Liability for medical care
  • Maritime Inland
  • Managerial responsibilities
  • The mergers and acquisitions of companies
  • The ocean marine environment
  • Liability insurance
  • Small business owner’s insurance

2. Nationwide

Founded by the Farm Bureau Mutual Automobile Insurance Company in 1926, Nationwide has been in business for almost a century. Based on those beginnings, it expanded to cover much more than farmers and cars.

3. Progressive

The Progressive Commercial Insurance company is best known for its commercial auto coverage but also offers small-business insurance options. There are several options for coverage:

  • Insurance coverage for general liability
  • Compensatory insurance for workers
  • Vehicles used for commercial purposes
  • Property insurance for commercial properties
  • Liability for professional services
  • Insuring against cyber threats
  • Insurance coverage for employment practices
  • The policy of business owners

Furthermore, Progressive offers specific insurance coverage like liquor liability, rideshare, inland marine, excess lines, and employee pet insurance benefits.

4. State Farm

State Farm insures and owns small businesses independently, unlike other insurance companies. Regardless of your business’s growth cycle, it offers insurance tailored to your industry. There are several options for coverage:

  • Compensation for workers
  • Automobiles used by businesses
  • Policy for business owners
  • A contractor’s policy is available
  • Indemnity insurance
  • Bonds of fidelity and surety

5. The Hartford

The Hartford insurance company is one of the oldest small business insurers in the country, with over 210 years of underwriting experience. Since it was founded as a fire insurance company, it now offers a wide range of customized trim business insurance options, such as:

  • Compensatory insurance for workers
  • Insurance coverage for commercial vehicles
  • Income generated by the business
  • Indemnity insurance for professional liability
  • Risks associated with cyberspace
  • The policy of the business owner
  • An industry-specific insurance policy

6. Travellers

Commercial property insurance is one of Travelers’ specialities. Aside from the United States, Travelers also offers coverage in the U.K. and Canada, making it a good choice for international businesses.

Small Business Insurance: How Much Does It Cost?

Our research shows that small business insurance’s lowest annual premium is around $300 for a business owner’s policy. However, the premiums for small business insurance will differ based on the scope and the limits you choose, what your business sells and how much it earns, where you are located, and if you rent or own your business space.

The Best Small Business Insurance Companies We Chose

Several online brokers and 19 national and regional insurance companies were compared based on 53 unique criteria to determine the best small business insurance companies. The requirements determine whether customers will be satisfied with the purchase process, their experience as policyholders, and how easily they can obtain small business insurance policies.

Policy-specific features, such as claim limits, cost, and coverage exclusions, were also considered, as well as state availability, financial stability, customer satisfaction, and availability of online quotes and applications. In our list of top companies, we looked for comprehensive coverage, a streamlined quote and application process, robust features, and strong ratings for financial stability and customer satisfaction. As well as examining the types of coverage companies offer, we looked at their specializations.

It took J.D. Power and Associates three years to analyze complaints for the National Association of Insurance Commissioners (NAIC). The customer experience was evaluated with Power Rankings; the financial stability was assessed with AM Best ratings. Here is a detailed breakdown of how the criteria contributed to the star ratings.

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