What is S corp insurance?

S corp insurance is business insurance tailored for companies structured as S corporations, which benefit from special tax advantages. Organizing your business this way can help protect your personal assets, but you still need coverage for risks that come with your day-to-day operations.

Explore business insurance for S corps by starting an online quote or calling a Progressive Commercial expert.

What is an S corporation?

An S corp is a special tax designation granted by the IRS. Businesses organized this way can pass their income, credits, and deductions directly to shareholders. This structure is typically used by small business owners to provide liability protection for personal assets.

Unlike a C corporation, where shareholders and the company get taxed on the same profits, an S corp avoids that double taxation by sharing profits with owners. It also provides the same personal liability protection as a traditional corporation.

What insurance coverages does an S corp need?

You should consider various types of insurance for your S corporation to protect against financial risks and lawsuits. Essential coverages include:

Business owners policy (BOP)

A business owners policy combines liability and property insurance in one convenient policy. This coverage includes the following:

• Liability insurance for S corporations covers bodily injury and property damage to others, plus advertising injury and product-related claims.
• Commercial property insurance safeguards physical assets of the business, including building structures, equipment, and merchandise, from fire, vandalism, theft, and other covered incidents.

Workers' compensation

Most states require you to carry this coverage if your S corp has employees. Workers' comp supports your team if they're hurt or become ill on the job and protects you from lawsuits.

Businesses in a monopolistic state must secure workers' comp through a state fund. They may also need stop gap coverage for employee lawsuits that might arise from a work-related accident.

Cyber

If you use computers and customer databases, your business needs protection against data breaches, cyber attacks, ransomware, and other threats to your technologies. Cyber insurance helps cover things like data recovery, business interruption, and investigative services.

Commercial auto

Does your company own any vehicles that you or your employees use for work? If so, a commercial auto policy can cover third-party injuries and property damage if your company vehicle is involved in an accident.

Professional liability

Professional liability coverage, also known as errors and omissions (E&O) insurance, protects S corps that provide advice and services. If a client claims you made a mistake or misrepresented something, resulting in a loss to the client, this coverage can help pay for your defense.

Employment practices liability insurance (EPLI)

EPLI covers claims of discrimination, harassment, wrongful termination, or retaliation if an employee tries to sue you. You can add EPLI coverage as an endorsement to a business owners policy.

How do you qualify for S corp status?

To be eligible for S corp status, you must meet specific IRS requirements, including:

• Be based in the United States: The company must be incorporated in the U.S.
• Have no more than 100 shareholders: Shareholders must be individuals, trusts, or estates. Exclusions include corporations, partnerships, and non-resident shareholders.
• Issue only one class of stock: While voting rights can differ, all shares must have equal rights to profits.
• Work in an approved industry: Certain industries, including financial institutions, insurance companies, and international sales corporations do not qualify.

How much does S corp insurance cost?

In 2024, the median monthly cost for a business owners policy for new customers was $67 per month. The cost of business insurance for your company will vary depending on several factors, including:

• Industry and type of work
• Location
• Number of employees
• Time in business
• Amount of coverage
• Claims history

Progressive Commercial can help you find an affordable rate based on your needs.

How to get S corp insurance

Call or get a quote online to customize your business insurance with Progressive Commercial. We'll help you choose your coverages, limits, and deductibles to build a tailored policy that works for you.

If you have any questions our specialized agents can guide you through the process.