Top Business Insurance Coverage: What You Need to Know [2024]

If you own a business, you need proper insurance. Business insurance protects you and your business from risks and financial losses that come with certain events, like lawsuits, loss of income, injuries, and property damage. The best business insurance for your company will cover as many potential losses as possible and reimburse your business either fully or partially. 

You will encounter several options as you search for proper insurance for your business. For example, some insurance companies offer several types of business insurance — like commercial and small business insurance and general liability insurance — while other insurance companies specialize in one or two coverage types.

To find cheap business insurance, compare business insurance quotes from several insurance companies once you determine the types of business insurance coverage you need for your business. Comparing quotes for business insurance can help you avoid paying too much for your company’s insurance in monthly or annual rates.

What are the different types of business insurance?

Business insurance doesn’t have to be tricky, but it may seem daunting when you first attempt to determine which type of coverage you need for your company. There are a few options to choose from when considering business insurance, including:

• Commercial insurance
• Small business insurance
• Liability insurance
• Property insurance
• Workers’ compensation insurance

You may need multiple types of coverage depending on the nature of your business. 

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What is commercial insurance? 

Commercial insurance is a type of coverage you can get to protect your business. Commercial insurance protects your business from bodily injury claims, cyber attacks, data breaches, and property damage claims. Learn more about the importance of cyber insurance for businesses here.

There are several types of commercial insurance that business owners may need. For example, general liability insurance and workers’ compensation insurance fall under commercial insurance coverage since they’re useful for business owners and companies. (For more information, read our “Advantage Workers Compensation Insurance Company: Customer Ratings & Reviews“).

Business owners need to choose the types of commercial insurance coverage that best suit their needs. Some of the most common commercial insurance coverages include:

• Commercial auto insurance
• Commercial property insurance
• Commercial general liability insurance
• Workers’ compensation insurance
• Cyber insurance
• Business income insurance
• Business owner’s policy

Depending on the size and nature of your business, you may need several coverages to ensure you have proper protection from potential risks.

Read more: Top Commercial Auto Insurance Coverage: What You Need to Know 

How is small business insurance different from commercial insurance?

Small business insurance often mimics a business owner’s policy, including general liability insurance, business income insurance, and commercial property coverage.

The purpose of insurance for small businesses is to protect the business from the financial responsibility associated with certain claims or losses. For example, small business insurance can help cover personal injury or property damage claims.

Small business insurance often covers incidents including:

• A customer slipping and falling on the business property.
• An employee causing damage to someone’s personal property.
• An employee getting injured while performing work-related tasks.

Small business owners must ensure their coverage helps with workers’ compensation claims. Otherwise, business owners may have to pay for medical expenses and lost wages out of pocket.

Small business insurance is commercial insurance, but the limits of a small business insurance policy may be much less than for a larger company. If you aren’t sure what types or amounts of insurance you need for your small business, you can research online and speak with an insurance professional to learn more. 

What is liability insurance?

A general liability policy for a company is extremely important. Liability insurance coverage helps your business when certain insurance claims occur. General liability insurance often covers:

• Bodily injury 
• Property damage
• Personal injury

If someone were to file an auto insurance claim against your business for one of the three reasons listed above, your insurance policy will help pay for repairs or medical bills. General liability insurance also pays for the costs associated with lawsuits for the above reasons.

In general, a liability policy for your company will help if:

• Someone files a property damage claim against your business.
• Someone files a claim against your premises liability insurance. 
• You have to go to court to settle certain disputes or claims.
• You need administrative assistance to handle certain disputes or claims.

Read more: What does premises liability insurance cover?

General liability doesn’t cover the following:

• Commercial car accidents
• Workers’ compensation claims
• Employee illnesses
• Damage to your business property

If you own a business, liability coverage is extremely important. You can find coverage and compare quotes for business liability insurance to ensure you’re properly covered if anything happens. 

What’s property insurance? 

Property insurance offers coverage for property protection coverage for a business. In general, property insurance may include helps protect commercial property from the following:

• Fire damage
• Theft
• Vandalism
• Wind damage
• Flooding
• Earthquake damage

Essentially, a property insurance policy helps to protect a company’s physical assets. Like a home insurance policy, property insurance covers the costs of the damage from a covered event. Without property insurance, business owners may have to pay for repairs and replacements out of pocket. 

What is workers’ compensation coverage? 

Workers’ compensation insurance provides financial compensation and medical care for employees who get injured or sick because of their jobs.

Business owners pay for workers’ compensation insurance to cover the cost associated with an employee’s work-related injuries or illness. Requirements for workers’ compensation coverage vary from one state to another. So, the limits of your workers’ compensation policy will depend on where you live. 

In addition to paying for medical care and lost wages associated with an employee’s work injury or illness, workers’ compensation protects business owners from civil suits associated with injuries or illnesses on a job site. Since business owners must carry workers’ compensation coverage, business owners who don’t will face serious penalties.

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How much does business insurance cost?

The cost of coverage for your business depends on several factors. For example, if you live in a state requiring more coverage for workers’ compensation, your costs will be higher than those living in a state with lower coverage levels.

General liability insurance costs around $65 each month for a small business, while workers’ compensation costs around $115 a month. The cost of business insurance also varies depending on your business size. For example, if you own a larger company, you’ll pay more for insurance than a small business.

As you search for business insurance, comparing quotes from several companies is important. Comparing quotes can help you determine which insurance company offers the coverage you need for your business at a price that works with your budget.

How can I choose the right business insurance?

To choose a business insurance provider, you must consider several factors.

First, assess your legal responsibilities as a business owner. For example, what insurance are you required to have based on your business’s nature and state rules and regulations? Are there additional liabilities associated with your business you must consider?

If you don’t know your state’s requirements for liability coverage, consult a professional to ensure you carry proper coverage.

Next, consider any additional risks or liabilities associated with your business. Doing so can help you figure out exactly what types and how much coverage you need.

As you carefully examine the nature and function of your company — including human resource and facility management — you can better determine any risks associated with your business you may not have otherwise considered. 

You may need to consider your plan of succession. For example, what will happen if the business owner passes away or can no longer provide their typical assistance or expertise? Many business owners can include succession planning in their business insurance to mitigate the loss associated with it. 

Once you know the coverages you need, you can choose an insurance company to help you care for and protect your business.

The best way to choose business insurance for your company is to find and compare coverages and quotes from several insurance companies in your area. Comparing quotes and coverage ensures you get the coverage you need for your peace of mind without paying too much in monthly or annual premiums. 

How can I compare business insurance options?

Comparing business insurance coverage options is easy. You simply need to determine what different companies offer in terms of coverage and whether those coverages meet your business needs. As you compare coverage options, you must also compare the cost of coverage with different insurance companies.

It may sound overly simple, but many business owners pay too much for coverage because they don’t take the time to compare quotes and find an affordable policy. 

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Business Insurance Coverage: The Bottom Line

You may feel overwhelmed by the possibilities as you shop for business insurance. Still, business insurance is not too complicated once you get started.

Your business needs liability and workers’ compensation coverage. Each state mandates the levels of coverage you need, so you can check with a state representative or expert to determine how much coverage you need for your business. In addition, you may need additional coverage for things like commercial auto insurance, so it’s important to assess how your business functions to avoid an insurance gap.

You can shop online to find and compare quotes for business insurance as you determine the types and amounts of business insurance you need. Comparing quotes for coverage will help you find the coverage you need at a price that works with your budget. 

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