What is business insurance?

Business insurance is coverage for financial losses caused by unexpected events. It can protect against a variety of risks, such as liability claims, employee injuries, and potential lawsuits. Common business insurance coverages include general liability, professional liability, and workers' compensation.

Business insurance works by protecting covered losses that occur in your daily operations. The purpose of business insurance is to shield your assets and minimize the amount you'd pay out of pocket. It's important for businesses of all sizes to get insurance tailored to their specific risks.

Speak with one of our business insurance experts or start an online quote to learn which coverages are the best fit for you.

Who needs small business insurance?

Any business owner who wants to protect their assets and mitigate risks should consider small business insurance. Regardless of the size or nature of your business, having appropriate coverage can safeguard against potential liabilities.

Business insurance is typically a good fit for the following industries and business types:

Browse by profession to learn more about what insurance your small business might need.

Is small business insurance required?

Certain laws and contracts might require you to carry business insurance. These requirements can depend on your location, type of work, employees, customers, and more. For example, workers' compensation is mandatory in many states if you have employees. Additionally, some clients, business partners, and landlords might require liability or property coverage before you start work.

Read your contracts carefully and explore business insurance by state to see what coverages are necessary.

What does business insurance cover?

Commercial business insurance can cover employees, customer injuries, property, and more. Coverage options vary based on your policy and business needs. They range from basic to specialized, and you can choose how much coverage you purchase to protect your business.

Some common types of business insurance include:

General liability

General liability insurance is the most common type of business insurance coverage. It protects you from third-party claims of personal injury and property damage. It can also cover medical payments, personal and advertising injury, and damage to premises rented to you.

If you work in a high-risk industry, like roofing or tree trimming, you might need to get general liability insurance though a market called excess and surplus lines insurance (E&S).

Business owners policy (BOP)

A business owners policy packages liability and commercial property coverage into a single policy. Designed to be cost-effective for small and medium enterprises, a BOP can protect your business from accidents, lawsuits, theft, and more.

Workers' compensation

Workers' compensation insurance helps employees who have work-related injuries and illnesses with medical expenses, lost wages, and more. Each state has its own rules surrounding workers' comp, and most require businesses to carry it. If you're located in monopolistic states like Ohio, North Dakota, Washington, and Wyoming, you will need to purchase it from a state agency.

Professional liability

Professional liability insurance can guard against claims of negligence for businesses that provide professional advice and services. It's also called errors and omissions insurance. Lawyers, consultants, designers, and engineers can benefit from this coverage.

Commercial auto

Commercial auto insurance is essential for businesses that rely on vehicles for their operations. It can cover auto accident claims related to liability, property damage, and more. You can also add coverages, such as comprehensive and collision, for more protection.

Cyber insurance

A cyber insurance policy covers businesses that process sensitive information, such as customer addresses and social security numbers. It offers protection in the event of a data breach or cyber attack.

Health insurance

Health insurance provides you, your employees, and their families with quality medical care. Progressive partners with eHealth to connect you with specialized plans for your business.

Employee pet health insurance

Pet health insurance is a voluntary benefit that protects your employees' pets. It helps pay for vet bills associated with illnesses or injuries and gives the option to purchase additional coverage for routine care.

What doesn't business insurance cover?

What's covered and not covered by business insurance will depend on your policy and the coverages you choose. Purchasing the right types of business insurance can prevent you from having gaps in coverage.

In many cases, you'll need more than one insurance product to protect against diverse risks. For example, a contractor might need general liability for customer injury and property damage claims. They could also purchase a commercial auto policy for accidents involving their work truck, which general liability wouldn't normally cover.

Customers can sometimes amend their policy through an endorsement to get additional coverage for events that business insurance usually excludes. The following are common business insurance endorsements:

Liquor liability

Liquor liability insurance is an additional coverage for businesses that work with alcoholic beverages. General liability excludes companies that profit from the service, sales, and distribution of alcohol. Liquor liability is an important gap coverage for these businesses. States with dram shop laws often require it.

Inland marine

Inland marine insurance provides coverage for moveable property that is transported or stored off-site. It can protect tools, equipment, and other materials from theft, vandalism, and damage. Business owners can add it to their general liability policy or a business owners policy.

Employment practices liability insurance (EPLI)

Employment practices liability insurance protects businesses from employment claims, such as discrimination, harassment, and wrongful termination. You can modify your general liability policy or business owners policy to include this coverage.

How is business insurance priced?

The cost of your business insurance policy depends on various factors, such as your profession, number of employees, property, and coverage needs. Your insurer will ask questions about your operations and assets when you get a business insurance quote.

You can expect to pay more if you work in a high-risk industry, have a large staff, or have heightened coverage requirements. A claims history can also affect your premium.

Keep in mind that the amount of coverage and the limits you select can affect your rate. Learn more about how business insurance costs are determined.

How to get business insurance

The first step to getting business insurance is evaluating your coverage needs. Once you decide what you require, gather basic information about your business to prepare for a quote. You'll want to take note of things like your industry, business tenure, and assets. Learn more about the information you need to start a quote.

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