Virginia was ranked B-, or B minus, in the small business friendliness survey conducted annually by Thumbtack in 2021. The survey ranks the 50 states on the scale from A to F, based on the 7 dimensions of small business friendliness. Virginia’s best dimension was ease of starting a business and its worst dimension was training and networking programs .
Regardless where they are located, small businesses have a high failure rate, especially in the first year, almost 20%. Small businesses failure can be caused by several factors. Don’t let a lawsuit bankrupt your small business. Make sure you have proper business insurance to protect your business in Virginia from lawsuits.
- 7 best business insurance companies in Virginia
- Business insurance coverages in Virginia
- Which business insurance coverage do I really need in Virginia?
- Is business insurance required in Virginia?
- How much does business insurance cost in Virginia?
- How to find cheap business insurance in Virginia?
- How to buy business insurance online in Virginia?
7 best business insurance companies in Virginia
Small business insurance is a very fragmented market with hundreds of providers, which can make it confusing for you to find the best one for you. We have research more than 30 providers in Virginia and here are our recommendations of the top 6 for your consideration:
– CoverWallet: Best for comparing several quotes of general liability, workers comp, and professional insurance online
– Simply Business: Best for finding low-cost coverage (general liability, workers comp, professional liability, and commercial auto insurance)
– InsurePro: Best for flexible, on-demand, pay-per-day coverage of general liability, commercial auto, and workers comp insurance
– NEXT: Best for contractors general liability insurance
– biBERK: Best for low-cost workers comp and commercial auto insurance
– Progessive: Best Overall for commercial auto and commercial truck insurance
– THREE: Best for one simple and comprehensive policy for small business at reasonable rates
– Commercialinsurance.net: Best if you prefer working with knowledgeable agents to find all types of small business insurance coverage
|Simply Business||– Get quotes from multiple insurance companies
– Optimize to find low-cost coverage by working with several insurance companies who can offer affordable rates
|You have to file claims with the carriers directly, not through Simply Business|
|InsurePro||– Specialize in finding on-demand and short-term coverage
– Affordable rates
|– May not offer every type of policy
– Can’t make claims through InsurePro
|CoverWallet||– Easy to get several quotes from one form
– Wide range of policies available
– Manage all your policies in your “wallet”
|– You will only get quotes from partner companies
– Only third party quotes (CW is a broker, not an insurance company)
|NEXT||– Specialize in contractor insurance
– Manage policies online
– Get quick quotes
– Handles all its own claims
|Mostly provides general liability insurance: they may not have everything you need|
|biBERK||– Completely digital experience: get a quote, buy a policy, manage your policy and file claims online
– Save 20% on premiums
|Low coverage limits|
|Progressive||– One of only companies that will consistently provide online quotes for commercial vehicles – Bundle with other policies – Many discounts available||Only provides commercial truck/vehicle coverage directly: other business coverage is by third party|
|THREE||– A single policy provides different types of coverage
– Simple 3-page policy document with no insurance jargons or fine print
– Affordable rates
|– Limited online access
– Only available in 23 states
Business insurance coverages in Virginia
Small business owners need to get business insurance to protect their business’s assets. The question is, what kind of insurance do you really need, and how much?
Below is the comprehensive list of small business insurance coverages that any small business may need. Different small businesses in different industries, different locations, and at different stages may need different coverages. If you are not sure which business insurance coverage your small business may need, consult with a small business insurance agent or broker.
General liability insurance
General liability insurance covers you for:
- Third-party bodily injury
- Third party property damage
- Advertising injury
General liability insurance covers guests such as customers and vendors if they happen to injure themselves while on your property. It covers their medical bills and your legal costs if they should sue you.
Third-party property damage covers you if you or an employee damages a customer’s property. Anyone who goes to clients’ homes, such as plumbers, contractors, real estate agents need to protect themselves. One slip and you could accidentally damage that expensive coffee table your customer recently had shipped over from Greece.
Advertising injury means injuries committed by a business when it advertises its products or services. It included slander, libel, and copyright infringement. These injuries could be committed by you or your employees, or they could be committed by someone else and you are the injured party.
For example, if you own a clothing store and you use one of your customers in an ad, but you did not obtain his/her permission first, they could sue you for violating his/her privacy. This is considered an advertising injury.
Commercial property insurance
Commercial property insurance protects your property and your equipment from losses. It covers losses due to:
- Lightning strikes
- Water damage
It should cover you for losses of business income, should one of the above factors damage your property. Oftentimes, landlords will require you to have commercial property insurance before they will rent or lease a space.
If flood, hurricane, or earthquake is common in your area, you need to add them in your commercial property insurance policy as additional coverages or endorsements. While earthquakes may not be common in Virginia, many areas in the state may experience hurricanes or floods in the winter.
Business Owners Policy (BOP)
A Business Owners Policy can save you money by combining several of the most common types of business coverage under one policy. It almost always combines general liability insurance and commercial property insurance. Usually, they also include at least one other type of coverage, depending on the policy. Some policies include:
- Business interruption insurance
- Cyber liability
- Rented vehicles
- Equipment breakdown
- Employment practices liability insurance
Shop around for the policy that provides the types of coverage you need.
Professional liability insurance
If you provide services or advice in exchange for money, you probably need professional liability insurance (PLI). Sometimes this type of coverage is called malpractice insurance, especially when it refers to medical or legal professionals, and sometimes it’s called errors and omissions insurance, but it’s all the same thing.
PLI covers you if you make a mistake or neglect to do something that causes your customer financial harm. For example, you are a real estate agent and you show houses to a nice young couple. They find one they love and are very excited. Sadly, you missed the deadline to put in their offer and another family bought the house. They could sue you for this mistake.
Workers comp insurance
Workers compensation coverage is required if you have even one employee, even if they are part-time, even if they are members of your own family. Only sole proprietors and LLCs do not have to cover themselves. Other exceptions are:
- Individuals having work done to their home
- Non-profits with no paid employees
- Corporate officers who own more than 25% of the business and have no other employees
Workers comp protects you, the employer, from having to pay medical costs and lost wages for injured employers who cannot work. It also protects the employees from having to pay for their own medical costs, and it helps by paying them for lost wages while they recover. Should the worst happen, workers comp will also pay death benefits to the family of the accident victim.
Workers comp is based on payroll. One way to save some money on workers compensation insurance is to by pay-as-you-go insurance, which is based on the exact amount of your payroll as opposed to sick employees, fired employees, or employees you haven’t gotten around to hiring yet.
Commercial auto insurance
Commercial auto insurance covers you if you are in an accident while using your vehicle for work. Personal auto coverage will not cover you if you use your vehicle for work-related purposes (other than commuting back and forth to your job).
Virginia law requires you to have at least 25/50/20, or $25,000 bodily injury liability, $50,000 per accident and $20,000 in property liability coverage. You also need liability coverage in case you are hit by an uninsured or underinsured motorist. The state law requires you to have at least $25,000 per person and $50,000 per accident uninsured or underinsured coverage.
If you want to cover damages to your own property and your own vehicle, you’ll need collision and comprehensive insurance.
Trucking companies need more insurance to comply with state and federal regulations.
These are the bare minimums. You would probably want more coverage, otherwise just one accident can easily bankrupt you.
Cyber liability insurance
Most businesses these days store at least some customer information online. Cyber liability insurance will protect you in the event of a data breach, malware attack, or ransomware attack. If you store things like credit card information, financial information, or medical records, you need cyber liability insurance. The cost of cybercrime is predicted to $10.5 trillion dollars by 2025. In case you’ve forgotten, that’s only three years away.
Business interruption insurance
If your business had to close due to an emergency, how would you pay your bills? Business interruption insurance provides protection against financial losses if your business needs to close temporarily due to a reason listed on the policy.
That last part is important. If your business interruption insurance does not cover pandemics, as many small business owners found out in 2020, then you will not be covered by business interruption insurance. Covered perils are usually things like:
- Falling objects
If floods or hurricanes or earthquakes are common in your area, you’ll need to add those as an additional expense. Earthquakes are not that common in Virginia but many areas are subject to hurricanes or even floods.
Directors & Officers insurance (D&O)
Directors & Officers insurance is like E&O (errors & omissions, also known as professional liability insurance) but for officers and directors of a company. It protects them from personal losses in the event the company is sued for some decision they made. A D&O policy will pay for legal fees to defend the company against lawsuits, either civil lawsuits or criminal lawsuits (often these are filed simultaneously).
Which business insurance coverage do I really need in Virginia?
There are a lot of different types of business insurance available but not all of them are necessary.
- Most small businesses should get general liability insurance. It protects you from the most common lawsuits filed against small businesses.
- If you use vehicles for business purposes, you’ll need commercial vehicle insurance. It is required by state law.
- If you have employees, you need workers compensation insurance. It is also required by state law.
- If you are in the business of providing services or advice to your customers, it is very likely that you will need professional liability, or E&O insurance, also called malpractice insurance in medical and legal fields.
Is business insurance required in Virginia?
The only insurance coverages that are required in Virginia is workers compensation and commercial vehicle insurance. Everything else is up to you, but like all insurance, you should weigh the risks of a lawsuit against the costs of insurance.
Who needs business insurance in Virginia?
Most small businesses should get at least a general liability policy, workers comp (if you have employees), and commercial auto insurance (if you drive a vehicle for business purposes).
Below are some popular small businesses that buy insurance in Virginia:
How much does business insurance cost in Virginia?
The average business in Virginia pays about $56 a month, or $672 per year, for a $1MM general liability insurance policy. If you have more policies, you’ll pay more. The best thing to do is get quotes from at least three different companies, so you won’t pay more than you have to.
Below are the average costs in Virginia for different small business insurance coverages:
|Virginia business insurance coverages||Average costs|
|General liability||$56 per month|
|Business Owners Policy (BOP)||$129 per month|
|Workers comp insurance||$1.5 per $100 payroll|
|Commercial auto insurance||$113 per month|
|Professional liability insurance||$64 per month|
|Cyber liability insurance||$128 per month|
|Commercial property insurance||$112 per month|
Please keep in mind that these are just the average rates that hundreds of thousands small businesses pay in Virginia. Your rates will be different. Be sure to shop around with a few companies and compare several quotes to find the cheapest one for your business.
What factors affect business insurance costs in Virginia?
There are a lot of things that affect how much business insurance costs. Just a few include:
- Number of employees
- Years of experience
- Industry (higher risk industries pay more)
- Claims history
- Coverage limits
It’s like buying auto insurance, in a way: insurance companies weigh the odds of how likely it is you’ll file a claim and then set your rates accordingly.
How to find cheap business insurance in Virginia?
As mentioned above, the easiest way to save money on insurance is to shop around. There are so many factors that go into insurance rates, and some companies might weigh some factors more than others. For example, if you only have a year’s experience in your field, some companies might see that as more positive (no claims!) and others might see it as a negative (This kid has no idea what he’s doing and will make mistakes).
You can also bundle policies. Business Owners Policies bundle several policies together, so you save money. Even if you only buy one type of business insurance, you can usually bundle it with your homeowners insurance or your auto insurance to get a discount.
Choose a higher deductible–make sure you have the funds to cover the deductible if you need to, but this can reduce your monthly payments.
Develop a safety plan. Stress the importance of working safer and smarter, not harder. Post the safety plan where everyone can see it.
How to buy business insurance online in Virginia?
Figure out what business insurance you really need. Then, get some quotes.
Most companies will give you an online quote for at least general liability insurance. Take the time to gather quotes–it doesn’t take much time and it could save you hundreds of dollars.
You can save time by using an online insurance broker. They will present you with at least a few quotes and you’ll only have to fill out one form. Companies such as CoverWallet, Simply Business, and Commercialinsurance.net are good places to start.
Once you have your quotes, buy your policy. For many companies, you can do this online as well. Others require you to call to purchase insurance. Either way, it’s not that much time and it could save you money.