Business insurance can provide financial assistance for expenses related to property damage, liability claims, lawsuits, employee injuries and other potential risks that come with running a business. Some of the most common types of small business insurance include general liability insurance, property insurance, professional liability insurance, workers’ compensation insurance and business interruption insurance.
While it’s advised for all businesses to have general liability coverage, the decision to invest in additional business insurance coverage will vary based on various factors such as the number of employees, location and industry. Find the right coverage for you by taking a look at our top picks for the best small business insurance companies.
Our Top Picks for the Best Small Business Insurance CompaniesWhy we chose State Farm: For three consecutive years, State Farm has maintained a position within the top three spots for customer satisfaction in J.D. Power’s 2022 U.S. Small Commercial Insurance Study.
State Farm earned 856 out of 1,000 points in customer satisfaction ratings, followed closely by other industry veterans like Chubb and Nationwide. For this ranking, J.D Power surveyed 2,254 small businesses with 50 or fewer employees and examined their satisfaction across five categories, including billing and payment, claims, provider interaction, policy offerings and cost.
State Farm offers business insurance designed for independent contractors, restaurants, professional services, and retailers, with paperless billing and autopay options. Commercial insurance products include BOP bundles, surety and fidelity bonds and farm and ranch insurance.
The company’s extra liability coverage includes professional liability, errors and omissions liability, employment practices liability insurance (EPLI), Not-for-Profit liability insurance with EPLI, and Condo and Homeowners Association Directors and Officers Liability with EPLI.
Other coverage offered:
For a complete list of the types of businesses and organizations State Farm insures, check out its handy business insurance directory.
HIGHLIGHTSA.M. BEST RATINGA++J.D. POWER RATING1st position (856/1000)NAIC COMPLAINT INDEXHigh
ProsWhy we chose Travelers: We chose Travelers as the best insurer for workers’ compensation on account of its excellent billing solutions and reputation as the leading underwriter of these policies.
Travelers workers’ compensation coverage adapts to your business needs. The company’s risk control consultants — the person in charge of inspecting and assessing your insurance needs — can do in-person or virtual visits. The company also offers a flexible billing option through TravPay, a pay-as-you-go service that syncs your workers’ compensation premium payments with your payroll processing.
As of 2022, Travelers also holds the largest market share for workers’ compensation policies, as well as the top two positions for commercial auto insurance. This is a strong indicator of its popularity as a commercial insurer.
In addition to workers’ compensation coverage, small business owners have access to the following insurance products:
HIGHLIGHTSA.M. BEST RATINGA++J.D. POWER RATINGAbove average (847/1,000)NAIC COMPLAINT INDEXLow
ProsWhy we chose Nationwide: Nationwide stands out for its flexible general liability coverage, which can be added to its other business insurance products.
Nationwide offers a wide array of products for small business owners, including business liability, commercial property, commercial auto insurance policies and workers’ compensation insurance.
Business owners can supplement Nationwide’s general liability insurance with additional coverage, including:
Other liability endorsements include product and completed operations liability, directors and officers liability, liquor liability and personal and advertising injury coverage.
HIGHLIGHTSA.M. BEST RATINGA+J.D. POWER RATINGAbove average (854/1,000)NAIC COMPLAINT INDEXHigh
ProsWhy we chose Progressive: Progressive’s business auto insurance — available in all 50 states — covers almost every type of commercial vehicle. Additionally, policyholders benefit from an unlimited travel radius (in most states) and may adjust coverage as needed, free of charge.
Progressive stands out for its coverage of commercial vehicles. The company’s policy usually covers liability, physical damages, medical payments, uninsured motorist, hired auto and non-owned coverage. Eligible vehicles include commercial trucks, business cars, emergency vehicles, military vehicles, and a variety of SUVs, vans, trucks, buses, tractors and trailers.
Progressive also offers business owners coverage for general liability, professional liability, workers’ compensation, BOP, health insurance and cyber insurance.
HIGHLIGHTSA.M. BEST RATINGA+J.D. POWER RATINGN/ANAIC COMPLAINT INDEXHigh
ProsWhy we chose CyberPolicy: Comparing insurance quotes is easier when you don’t have to jump back and forth between different websites. CyberPolicy’s network of insurance carriers includes established insurance providers, some of which are also part of our top picks.
CyberPolicy is a small business insurance policy marketplace that partners with some of the most prominent industry players — Chubb, Hiscox, Liberty Mutual, Nationwide and BiBERK — to provide a convenient, one-stop shopping experience. The company offers free quotes, and once you purchase a policy, coverage starts within as little as 24 hours.
Other coverages offered:
CyberPolicy’s customer service includes a licensed insurance advisor available via chat to help you decide on the best commercial insurance options for your business.
HIGHLIGHTSA.M. BEST RATING N/AJ.D. POWER RATINGN/ANAIC COMPLAINT INDEX N/A
ProsWhy we chose Thimble: Thimble’s business insurance is an ideal solution for entrepreneurs seeking an affordable, customizable and mobile-friendly policy.
Thimble offers cost-effective monthly and as-needed general and professional liability insurance coverage for small businesses and self-employed individuals, such as freelancers, personal trainers, pet sitters, event planners, photographers, landscapers, beauty professionals and all others in between.
Micro businesses — operations with fewer than 10 employees — can benefit from Thimble’s adaptable terms such as the opportunity to purchase a policy for whatever duration is required, and the ability to extend, modify or cancel your policy straight from the Thimble app.
Other coverages offered:
HIGHLIGHTSA.M. BEST RATING Underwriters Markel Insurance Company and National Specialty Insurance Company are rated AJ.D. POWER RATING N/ANAIC COMPLAINT INDEX N/A
ProsWhy we chose Liberty Mutual: Liberty Mutual’s commercial umbrella policy offers complete liability protection for companies, with base umbrella coverage of up to $25 million, which can be increased to $100 million depending on the amount of coverage needed.
Liberty Mutual’s umbrella insurance provides additional liability coverage beyond the limits of existing policies, including auto, watercraft and homeowners insurance. The company’s umbrella insurance also includes crisis management support services that can provide up to $250,000 in consulting expenses to help steer media coverage and public relations.
Regarding customer service, Liberty’s specialized underwriters are trained to understand complex risks across a variety of industries, and their dedicated complex liability claims unit is experienced in navigating catastrophic losses.
HIGHLIGHTSA.M. BEST RATING A J.D. POWER RATING Below average (834/1,000) NAIC COMPLAINT INDEXHigh
Other Companies We ConsideredThe following companies did not make it to our top list but are still worth considering.
NEXT ProsNEXT Insurance uses AI and machine learning to optimize the insurance application process and to match consumers with the most affordable premiums. The company currently offers 15 business insurance products (availability varies by state).
Why NEXT Insurance didn’t make the cut: NEXT Insurance didn’t make it into our top picks because it caters to business owners who prefer a tech-driven insurance service. And as your business grows, NEXT’s insurance products might not offer adequate coverage. That said, it’s a solid option for startups that only need the basics.
Simply Business ProsSimply Business is an online broker that provides quick online quotes from multiple insurers. The site is a good choice for those who would like to quickly compare quotes side-by-side or are still uncertain about the kind of coverage they should be getting.
Why Simply Business didn’t make the cut: Simply Business didn’t make it to our top list because its service is very similar to our marketplace top pick, where you can compare several of our best business insurance providers.
The Hartford ProsThe Hartford stands out for its comprehensive Business Owner’s Policy (BOP), a three-in-one policy that combines general business liability insurance, business property insurance and business income insurance. The BOP also includes protection from loss of income caused by fires, destructive winds, burglaries, bodily injury or property and personal and advertising injury.
Why The Hartford didn’t make the cut: The Hartford offers a host of business insurance products that can be tailored to each client’s needs. However, the company received the lowest customer satisfaction ranking in J.D Power’s most recent study.
Chubb ProsChubb has been in the business insurance industry for almost 140 years. The company enjoys excellent financial strength ratings, and its products are very well-received by most of its policyholders. Chubb has products for a vast number of industries, making it ideal if you’re looking for very specific types of coverage instead of just general business insurance.
Why Chubb didn’t make the cut: Rates for Chubb business insurance aren’t accessible online. In addition, Chubb’s business insurance rates are reportedly some of the most expensive in the industry.
Hiscox ProsHiscox offers various policy options best suited for self-employed or small businesses with few employees. The company’s BOP policy is currently limited to businesses that employ 10 people or less such as consultants, recruiters, PR specialists, graphic designers, photographs and others.
Why Hiscox didn’t make the cut: Hiscox’s business insurance products cater to a very specific commercial sector: professional services with less than 10 employees. In addition, its insurance products aren’t available in Alaska, Delaware, Florida, Kansas, Washington and West Virginia.
Geico ProsGeico’s business insurance products include commercial auto, rideshare, general liability, professional liability, a business owner’s policy, and workers’ compensation. Its experience with auto insurance makes it a good choice for commercial auto coverage and rideshare coverage. However, these two products are some of their most expensive and lack online claim filing.
Why Geico didn’t make the cut: We excluded Geico from our top picks because all of its business insurance products (except commercial auto insurance) are underwritten and administered by another provider, Hiscox.
CNA ProsAnother well-established carrier, CNA has been around since 1897 when they began offering coverage to railroad industry employees. The company features a wide variety of insurance types for businesses of several sizes and excels in offering fidelity and commercial crime business solutions and inland & ocean marine insurance.
Why CNA didn’t make the cut: CNA is a reputable insurance carrier, but users who’d like to learn more about its insurance products online might find the website a bit lackluster and challenging to navigate.
Business Insurance GuideBusiness insurance offers financial protection against losses due to events that may happen during the regular course of business, such as certain natural disasters, fires, accidents, lawsuits, and death. Going without business insurance comes with high risks. A claim lodged against your uninsured business could eventually lead to a legal seizure of assets, leaving you unable to pay your employees or suppliers.
It is essential to incorporate business insurance into your initial business plan, as the risks associated with going without it, even for an LLC, are considerable. A claim lodged against your uninsured business could eventually lead to a legal seizure of assets, leaving you unable to pay your employees or suppliers.
How Does Business Insurance Work?Business insurance works similarly to other types of insurance. In exchange for agreeing to share their business’s risks, clients pay a monthly premium to an insurance carrier. The business can then file a claim with the insurance company in case of a financial loss, for example, if a fire or flood destroys a portion of the business premises.
Once a claim is processed and the damages are assessed, the insurance company disburses the appropriate amount of compensation for the loss. How exactly a claim is processed will depend on the scale of the claim and the type of policy.
Types of Small Business InsuranceBusiness insurance companies offer a wide variety of products, which broadly fit into one of two categories: property insurance and casualty insurance. Some of these products are sold as individual policy types, whereas others can be added to existing policies as add-ons. Some are even required for all businesses by federal or state law.
It’s important to note that the insurance products listed below represent only a portion of the many types of coverage offered by insurance carriers. Other specialized types of coverage are available to meet the unique needs of specific industries, such as agriculture, aerospace, real estate and wineries.
General liability insuranceThis policy — essential for all types of businesses — covers claims or lawsuits against a business due to bodily injury, property damage, medical expenses, death, slander or libel. The coverage extends to the cost of legal fees, settlements and judgments in a covered claim.
Average monthly premium: ~$50
Commercial property insuranceCommercial property insurance covers loss of or damage to the possessions of a business, e.g., tools, equipment, inventory, furniture, valuable documents or outdoor landscaping. It’s best for businesses with significant property and physical assets.
Average monthly premium: ~$85
Cyber liability insuranceCyber liability insurance covers expenses related to data breaches, cyberattacks, and other cyber events (e.g., direct financial losses, customer loss, and legal costs.) This coverage is fundamental for businesses that are top targets for cyberattacks, such as online retailers, online service companies, fintech companies and insurance services.
Average monthly premium: ~$90
Business owners’ policy (BOP)A Business Owners’ policy is a type of insurance policy designed for small and medium-sized businesses. It combines several types of coverage into a single policy, including property insurance, liability insurance and business interruption insurance.
A BOP typically covers property damage to a businesses’ physical assets, such as building, equipment and inventory, as well as liability for injuries or damages caused by the business or its employees. It may also include coverage for loss of income or extra expenses incurred due to a covered loss, such as a fire or other natural disaster.
Average monthly premium: ~$100
Workers’ CompensationIf an employee is injured at work, workers’ compensation insurance covers expenses related to medical care, lost wages due to recovery time, disability benefits and funeral expenses. This policy is generally mandated and regulated by the state.
Workers’ compensation coverage is not to be confused with disability insurance, a benefit of business health insurance that covers the employee’s healthcare expenses outside the workplace.
Average monthly premium: ~$40 (per employee).
Commercial Auto InsuranceCommercial auto insurance typically covers liability for bodily injury and property damage caused by an accident involving a business-owned vehicle, as well as damage to the vehicle itself. The coverage can also extend to the non-owned vehicles used by employees for business purposes, such as rental cars.
Average monthly premium: ~$85.
Professional Liability Insurance (sometimes called Errors and Omissions (E&O) Insurance)Professional liability insurance, also known as Errors and omissions (E&O insurance), is a type of insurance that provides coverage for professionals who provide advice or services to clients. This policy can cover lawyers, accountants, consultants, real estate agents and other professionals from claims made by clients alleging that they have suffered financial losses as a result of the professionals’ negligence, errors or omissions in their work.
Average monthly premium: ~$60
Common business insurance ridersInsurance riders, or endorsements, modify the basic business insurance policies in order to add benefits that meet the specific needs of the company. The most common riders include:
The best business insurance policies provide coverage for a wide range of risks, but certain losses and events are typically excluded from coverage.
Intentional and criminal actsAfter receiving a claim, the insurance company will investigate and may deny the claim if it finds signs of intentional damage to property, fraud or theft by the insured, an employee or a key person. For example, the insurance provider will deny a claim if the claimed damages were caused by an employee who stole or embezzled money. The same applies for criminal activity.
Lack of maintenance or mitigationBusiness insurance providers won’t cover damages or regular wear and tear if the underlying cause is lack of maintenance. For example, insurance won’t cover a roof with extensive water damage if it determines that the owner failed to do the necessary repairs on time.
Catastrophic damageCommercial property insurance doesn’t cover damage from floods, earthquakes, wars or acts of terrorism because such events can affect many policyholders at once and lead to disastrous losses for insurance providers. In the case of flood or earthquake damage, you might need a separate insurance rider.
If your business is in need of financial help, check our selection of the best small business loans and startup business lines of credit. Businesses that suffer damages in a declared disaster can also apply for an SBA-backed disaster assistance loan to cover repairs, replacement of property, operating expenses and economic injury.
How much is small business insurance?Small business insurance costs depend on the coverage you need. The average small business insurance costs approximately $46-$125 monthly or $552-$1,500 per year. The final cost will depend on the industry, how many employees you have, the coverage needs of the business and your claims history, if applicable.
How to get small business insuranceAs with buying personal insurance, spending a little time planning your business coverage upfront can pay off handsomely. These steps can save you time and money when comparing small business insurance costs and policies online.
Take stock of business assetsMake a list of what the business owns, including property, equipment, and inventory. Then, determine the value of those assets to ensure you will buy sufficient coverage to repair or replace them if the worst happens.
Figure out how much coverage you needList all the functions and activities of your business, then assess the coverage you think is needed for each, based on its respective risk.
Seek professional help, in part to research insurance companiesThe coverage assessment we describe above is best completed with the help of an insurance professional. Seek an independent agent or marketplace specializing in business insurance and who represents a variety of insurers.
Compare quotesThe policies you compare should have the same, or similar, exclusions, deductibles, and coverage limits. An agent or marketplace site you’re working with will be able to provide business insurance quotes from the companies they represent. Consider supplementing those with quotes from companies you reach out to yourself — including some of those on our list.
Look for policy bundling discountsMany insurance companies offer discounted prices when you purchase multiple policies. In addition to the financial advantages, bundling coverage can reduce the time and hassle required to pay premiums, contact customer service, or make claims.
Review your business insurance regularlyReviewing your business insurance coverage gives you a chance to assess how you’ve used your coverage in the past and if you need to increase or lower it. You may be able to drop coverage limits or increase deductibles, saving money on premiums.
Along with annual reviews, try to re-evaluate your business’ coverage level and policy type whenever business needs or circumstances change.
What documents do you need to get a business insurance policy?The information and documents you need to take out a business insurance policy will vary based on the type policy or policies you want to purchase. Generally, you want to have the following on-hand:
As a small business starting out, business networking can open up new opportunities, enhance your visibility and help you connect with the right employees and colleagues. To help you enter the world of networking with confidence and achieve success, our article on Tips for Successful Business Networking offers practical advice and guidance.
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Best Small Business Insurance FAQHow much is small business liability insurance?Small businesses generally pay around $42 per month for general liability insurance. The final quote for your business depends on the risks associated with your enterprise and the level of coverage.
What insurance is needed for a small business? It is recommended that small companies have at least a Business Owner's Policy (BOP), including property coverage and protection against liability, peril and business interruption.A BOP is necessary even if your business is registered as an LLC. An LLC protects your assets from being attached to your business, but if you don't have a general liability policy and an accident happens, your business is liable for the costs associated with the accident.
What is small business insurance?Small business insurance protects business owners against a range of risks. A comprehensive policy usually covers property damage, liability claims and employee injuries.Business owners can purchase a business insurance policy with several types of protection, or buy each coverage individually if they're just looking for a specific policy, such as general liability or property insurance. Talk to an insurance agent or broker to figure out what level of coverage is best for you.
What is the cheapest small business insurance?From the companies we researched, Thimble offers the cheapest small business insurance starting at approximately $42 per month.
How We Chose the Best Business Insurance CompaniesIn choosing the best small business insurance providers, we prioritized four key our selection process:
To review customer satisfaction, we referenced J.D Power’s 2022 U.S. Small Commercial Insurance Study as well as the complaint index registered with the National Association of Insurance Commissioners (NAIC).
Summary of Money’s Best Small Business Insurance© Copyright 2023 Money Group, LLC. All Rights Reserved.
This article originally appeared on Money.com and may contain affiliate links for which Money receives compensation. Opinions expressed in this article are the author's alone, not those of a third-party entity, and have not been reviewed, approved, or otherwise endorsed. Offers may be subject to change without notice. For more information, read Money’s full disclaimer.
