California is one of the best places to do business, especially startups. According to the Small Business Administration (SBA), there are about has 4.2 million small businesses in the state. Those small businesses account for about 99.8% of all companies in the state, employing up to 7.3 million people.
California’s thriving economy makes it an ideal spot for startups and small businesses. However, it is also one of the states where businesses face the highest risk of getting sued. Therefore, as a business owner in California, you need to think ahead and find the right business insurance coverage. Such coverages will protect you against lawsuits and accidents that could send you out of business.
Unfortunately, finding the right insurance company in California is not so easy as there are so many options to choose from. To help you, this article will provide you with a list of 7 of the best companies that provide the best business insurance coverages. We also have a guide that will help answer all your questions regarding business insurance.
- The 7 best business insurance companies in California
- What is business insurance?
- Why do small businesses need insurance coverage in California?
- What insurance coverage do small businesses in California need?
- What business insurance coverage is required in California?
- How much does business insurance cost in California?
- How to find business insurance coverage in California?
- How to find the cheap business insurance in California?
The 7 best business insurance companies in California
Hundreds of companies offer business insurance in California. As a small business, choosing the right company for the right coverage might not be as easy as it should be. We research and recommend the top 7 companies for your consideration:
- CoverWallet: Best for comparing several online quotes
- Hiscox: Best for professional liability insurance
- Liberty Mutual: Best for general liability insurance
- Geico: Best for commercial auto insurance
- Employers: Best for workers comp insurance
- Nationwide: Best for Business Owners Policy or BOP
- Chubb: Best Overall
CoverWallet: best for comparing several online quotes
CoverWallet is an online platform wher you can buy business insurance. The company is not an insurance provider; instead, it connects business owners with their needed policies provided by reputable business insurance companies. The company takes pride in making the purchase of business insurance as simple as possible for business owners.
CoverWallet’s online platform is straightforward for all users. It is intended for business owners and is excellent for comparison shopping. CoverWallet is ideal for busy business owners or startups who need a quick way to compare the best business insurance options for their company.
Hiscox: Best for professional liability insurance
Hiscox began in 1901; the company has since provided a comprehensive commercial insurance product line. For professionals in California, Hiscox delivers the best professional liability insurance that meets your needs. In addition, the company writes all of GEICO’s business insurance policies.
Hiscox provides standard liability coverage limits of up to $2 million, with higher limits available underwriting approval. The company offers coverage for a wide range of industries and policy types. Salons, fitness instructors, consultants, therapists, janitors, real estate agents, acupuncturists, accountants or CPA, and financial advisors are among the 180+ sectors that can benefit from their customized solutions.
Liberty Mutual: Best for general liability insurance
Liberty Mutual is one of the largest providers of insurance in the US. They have been in operation since 1912, and they serve all businesses in California. With such long experience, the company offers its clients the best general liability insurance. They also provide commercial auto insurance, umbrella insurance, and other coverages for businesses in California.
Liberty mutual has a B+ rating from the BBB to attest to its credibility. It also has many good reviews from its users all over the internet.
Geico: Best for commercial auto insurance
Geico is an abbreviation for Government Employees Insurance Company. The acronym highlights that the company’s initial target audience was government and military personnel. Today, anyone can become a customer, but this was not always the case.
Geico is your best bet for commercial auto insurance in California. At the moment, they are one of the largest auto insurance companies in the US. Since its inception in 1936, GEICO has insured over 28 million vehicles under more than 17 million auto policies. So, if you are looking for experience, they have it all.
The Better Business Bureau (BBB) rates them A+ to testify to their excellent high-quality service.
Employers: Best for workers comp insurance
Workers comp insurance is required by the state laws in California. Employers is one of the top providers of workers comp insurance. They have been in the industry for 100+ years. They focus 100% on small businesses and offer coverage to a wide range of industries.
When you get quotes online from different digital brokers and marketplaces, it is likely for you to see quotes from Employers since they offer a robust digital quoting application to many companies. However, you might need to talk to an Employers agent if you want to get quotes directly from them.
Nationwide: Best for Business Owners Policy or BOP
Nationwide is a Fortune 100 company with its headquarters in Columbus, Ohio. Nationwide today is one of the largest and most diverse insurance and financial services organizations in the United States. Their Business Owners Policy or BOP is perhaps the best and most robust that you will find in California. Their coverage options include traditional general liability, commercial property insurance, and business income interruption insurance. The great thing about business owners policy (or BOP) insurance from Nationwide is that it is easy for your to add other relevant endorsements to the BOP policy such as commercial umbrella coverage, equipment failures coverage, and employment practices liability coverage to cover employment-related lawsuits.
In addition, they also offer modern insurance options like cybersecurity protection. The company has an a+ rating with the Better Business Bureau (BBB). They also have an A+ rating for their superior financial stability from AM Best.
Learn more at the best BOP insurance companies.
Chubb: Best Overall
Chubb is a global insurance company that writes over $40 billion in individual and commercial policies every year. Of all the policies in their portfolio, its most robust offering is its business insurance coverage. Chubb’s Custom General Liability policy is well-suited for small businesses and multinational corporations. This policy covers almost everything, from bodily injury and property damage to litigation and vendors. As a result, Chubb receives our recommendation for the best overall for Business Insurance in California. Chubb, by the way, has an A++ rating from the AM Best for its financial strength.
What is business insurance?
Business insurance is an insurance policy that protects your company from potential losses that may occur during the ordinary course of doing business. Usually, the policy comes with several other types; this includes coverage for property damage, legal liability, and employee-related risks.
These coverages, also known as commercial lines insurance, keeps the economy running smoothly. It does this by protecting businesses from potential losses that they cannot afford to cover independently. That way, the company can continue to operate even when it seems too risky to do so.
Why do small businesses need insurance coverage in California?
Facts and data show that California is an excellent place to do business in the United States. However, issues related to stringent government regulations, laws, and restrictions affect businesses across the state. More so, California ranks fifth in the country in terms of states where business owners are most likely to be sued by their employees. The high rates of employee lawsuits are primarily due to the strict employment practices regulations enforced by the state government.
One out of every five of these lawsuits in California sees the defendant get defense and settlement payments. As a result, small businesses in California bill an average of $125,000 in claims while paying approximately $35,000 in deductibles.
Small business owners face greater personal financial exposure in a loss because of their size and resources. Large and established businesses might have what it takes to fight these lawsuits. But small companies generally do not have the resources to fight or pay for these claims. Therefore, small business owners must carefully consider and evaluate their business insurance needs.
If a business owner does not believe they can assess business risk and need coverage, they should consult with a reputable, experienced, licensed insurance broker. You can find a list of licensed agents in your state by contacting your state’s insurance department or the National Association of Insurance Commissioners.
What insurance coverage do small businesses in California need?
While each small business is different, insurance companies recommend that small businesses in California carry at least $500,000–$1,000,000 in commercial liability insurance to cover bodily injury, personal injury, advertising injury, and legal defense and judgment.
What business insurance is required in California?
As a business owner in California, the state does not mandate that you carry most coverages by law. However, under the law, you must have worker’s compensation if you have part-time or full-time employees. The policy will cover for their injuries or illnesses while at work. You can decide to do that using the state’s insurance fund, or you could use your private insurance carrier.
Additionally, if your business owns or rents a vehicle for business purposes, the state also mandates that you carry commercial auto insurance. We’ll cover the limits for commercial auto insurance later in this guide.
While the state of California does not require businesses to carry additional coverages such as general liability, some of your clients might require these coverages. Their requirements are frequently specified in contracts that specify the types and limits of coverage you must have before you can begin working for them.
General liability insurance for small businesses in California
General liability insurance protects against common business risks such as customer injury, property damage, and advertising injury. It shields your small business from the high costs of lawsuits and assists you in obtaining leases and contracts.
As a small business owner in California, you should consider getting this coverage if:
- If you work in an office that you rent or own
- If you work in close contact with your clients
This policy is vital for small business owners to buy it before starting operations. Also, some clients might request this coverage before they do business with you.
In California, the following are some examples of instances where general liability insurance can be helpful for your business:
- While on the job, you inadvertently damage a customer’s property.
- A customer slips and falls and is injured in your establishment.
- Your company is sued for slanderous remarks you made about a competitor during an interview.
General liability insurance will keep you protected in any above scenarios and keep your business financially stable.
Learn more at the best general liability insurance companies in California.
BOP insurance for small businesses in California
A business owner’s policy (BOP) combines property and liability coverage into a single package. Depending on the company, BOP is usually sold at a lower premium than the total cost of the individual coverages. This makes it a popular choice for many business owners in California and across the US.
This policy is ideal for small business owners who own or rent the building in California, where they operate. You can read this article for more information about BOP insurance for small businesses in California.
Professional liability insurance for small businesses in California
Also called Errors and Omissions (E&O) insurance, professional liability insurance is crucial for any business insurance portfolio. This coverage is primarily for professionals like doctors and lawyers, where their mistakes in their jobs can cause lots of damage. The insurance helps protect the professionals from such financial losses or damages when they happen. This coverage covers all expenses incurred due to a lawsuit, including unfavorable judgments like general liability insurance. The distinction between general liability and E&O insurance is that general liability protects you if someone is physically injured. In contrast, professional liability protects you if your client claims damages due to the services you provide.
Different professional liability insurance for different professionals have several nuances that are specific to the profession. Use our guide specific to the profession to find and get the best professional liability insurance coverage for you. Professional liability insurance is also called malpractice insurance or errors and omissions in some professions:
The coverage details are a bit different and nuanced in different industries and specialties. Use our guides specific to each industry and specialty to find the coverage that you need:
- Lawyers – Top 5 Providers of Legal Malpractice Insurance & How Much It Costs
- Accountants & CPAs – Professional Liability Insurance (E&O) for Accountants and CPAs
- Tax preparers – The Best E&O Insurance for Tax Preparers
- Doctors – The 5 Best Providers of Medical Malpractice Insurance
- Consultants – Professional Liability Insurance (E&O) for Consultants
- Real estate agents – Top 5 Providers of Real Estate E&O Insurance & Costs
- Insurance agents – E&O Insurance for Insurance Agents: Cost and Top 5 Providers
- Engineers – Top 5 Providers of Professional Liability Insurance for Architects and Engineers
- Marketing and advertising services
- Psychologists – Top 4 Providers of Malpractice Insurance for Psychologists and Counselors
- Nurses – The Best 4 Providers of Nursing Malpractice Insurance
- Nurse practitioners: The Best Malpractice Insurance for Nurse Practitioners
- Dentists – Top 5 Providers of Dental Malpractice Insurance
- Dental hygienists – The Best Malpractice Insurance for Dental Hygienists
- Physician’s assistants – The Best Malpractice Insurance for Physician’s Assistants
- Physical Therapists – The 6 Best Malpractice Insurance Providers for Physical Therapists
- Chiropractors – 4 Best Choices for Cheap Chiropractic Malpractice Insurance
- Pharmacists – The Best Malpractice Insurance for Pharmacists and Costs
- Social workers – The Best Malpractice Insurance for Social Workers
Workers comp insurance for small businesses in California
Workers’ compensation insurance or workers’ comp insurance is a type of coverage that assists in paying medical expenses for injured or ill employees on the job. As a business owner in California, the laws mandate that you purchase workers’ compensation insurance when hiring your first employee. There are, however, a few exceptions. For instance, if you work as an independent contractor or sole proprietor, you are not required by law to have a workers’ compensation policy.
To understand California workers’ comp laws and learn more at the best workers comp insurance companies in California.
Commercial auto insurance for small businesses in California
Commercial auto insurance is a coverage that protects vehicles used for business purposes. It works the same way personal auto insurance will work, only that it covers commercial vehicles that private insurance policies do not cover. That is, if your business owns, rents, or leases vehicles for business; you need this insurance. Even if you have personal auto insurance, it won’t cover your commercial vehicles.
In California, the state laws mandate that you carry commercial auto insurance if your business has vehicles. For companies in California, this means that you must insure each vehicle with the following minimums:
- Property damage liability of $5,000 per incident;
- Bodily injury and death liability of $15,000 per person
- $30,000 bodily injury or death liability to multiple people
To learn more about commercial auto insurance in California and the best commercial auto insurance companies in California.
Other business insurance coverages that small businesses in California might need
- Commercial property, which covers losses in your workplace resulting from things like weather damage, fire, theft, or vandalism.
- Business income interruption, which will help replace a portion of your business income if your company is unable to operate because of covered reasons.
- Product liability, which covers you if a product you manufacture or sell is faulty and doesn’t perform as intended and you’re sued because of it. Learn more at the best product liability insurance companies.
- Cyber insurance, which helps pay expenses related to the theft or loss of critical customer, employee, or business information. Learn more at the best cyber insurance companies and the best data breach insurance companies.
- Directors and officers, or D&O insurance, which will help pay legal expenses and damages if a director or officer at your company is sued because of a business-related decision. Learn more at the best D&O insurance companies.
How much does business insurance cost in California?
The cost of business insurance in California is about $179 per month or $2,132 per annum on average. Usually, a range of factors affects this cost; they include:
- The industry type: contractors, for instance, will pay more compared with cleaners because their work comes with more risks. Professionals also pay more since their work exposes them to more financial troubles.
- The coverage requirements: the more the coverage, the higher the price
- The size of the business: the more the employees and projected income, the more you will pay for insurance.
- The business location: For instance, a company in Los Angeles or San Fransisco will pay more for a premium than a business in Victorville.
Learn more at the business insurance costs for different coverages.
How to find business insurance coverage in California?
There are several options for you to choose from for business insurance. You can get your coverage from business insurance digital brokers or the insurance companies themselves.
Getting a quote from the digital broker is usually more straightforward as the company does most of the work and recommends the best option for you. Besides, these companies typically generate their suggestions in a few minutes, so that will save you a lot of time. But then, the company can only recommend policies offered by their partners.
If you want more recommendations, you can do things yourself by checking quotes from various companies. This might be time-consuming, but you won’t miss anything except you want to. Learn more about where to get and compare business insurance quotes online.
How to find the cheap business insurance in California?
As a business owner, your main aim should be to cut costs as much as possible. The following are some methods to get discounts for your business insurance.
- You are paying your premium in full. Most insurance companies provide discounts if you pay a year’s worth of insurance premiums in advance. The deal comes as a reward since you won’t be missing any payment later on.
- You are bundling up multiple policies. When you combine various types of insurance, most major insurance companies will give you a discount. For instance, if you already have a policy for home, auto, or another type of insurance, you should consider getting your business insurance from the same company. That way, you might get a discount from the company regarding the business insurance.
- You are maintaining continuous insurance coverage. If you’ve had your current business insurance policy for at least a year, you may be able to save money on your new policy.
Top 10 industries for small businesses in California & business insurance coverage they would need:
|Top 10 industries for small businesses in California||Small business examples||Business insurance coverages these small businesses would need|
|Professional, Scientific, and Technical Services||– A small IT Consulting firm; |
– A computer & cell phones repair shop
|-Commercial property insurance|
-Professional liability insurance
|Healthcare and social assistance||– A dentist office or doctor office; |
– An in-home care service
|-Cyber liability insurance|
-Employment practices liability insurance
-General liability insurance
-Professional liability insurance
-Medical malpractice insurance
|Construction||– A small construction contractor||-General liability insurance|
-Builders’ risk insurance
-Professional liability insurance
-Pollution liability insurance
-Commercial auto insurance
-Inland marine insurance
-Contractor license insurance
-Workers’ compensation insurance
|Retail Trade||– A small neighborhood grocery or liquor store||– General liability|
– Business owners’ policy
– Workers’ compensation
|Accommodation & food services||– A small hotel|
– A cafeteria
|– General liability insurance |
– Business interruption insurance
– Liquor liability insurance
– Property insurance
– Food contamination insurance
|Real estate and rental or leasing||– A real estate brokerage |
– A small apartment building
|– Cyber insurance|
– Employment Practices Liability insurance
– Professional liability insurance
|Finance and insurance||– A small tax preparing service firm |
– A small financial or investment advisor firm
|– General liability insurance |
– Professional liability insurance
– Cyber liability insurance
– Umbrella coverage