Maryland is a great place to start a small business. It’s located within spitting distance of our nation’s capital, Washington D.C. and many high-profile leaders and lawmakers live in Maryland. Maryland also offers an educated and skilled workforce and an excellent education system.
Maryland has many advantages when it comes to launching a small business, but starting a small business is still a risky endeavor. There are so many details to keep track of, and it all comes down to you, the small business owner. One thing you don’t want to overlook is small business insurance. The last thing you need is one lawsuit to bankrupt your small business and erase years of hard work.
- 6 best business insurance companies in Maryland
- What kind of business insurance coverages do I need in Maryland?
- Which business insurance coverage are required in Maryland?
- How much does business insurance cost in Maryland?
- How to buy business insurance online in Maryland?
The best business insurance companies in Maryland
There are probably hundreds of companies offering small business insurance these days. How are you supposed to wade through all the details and find a reputable company with good rates? We’ve done the preliminary leg-work for you, so you can move on to other things–like running your business.
- CoverWallet: Best for comparing several online quotes, especially for general liability, workers comp, and professional insurance
- InsurePro: Best for flexible, on-demand, pay-per-day coverage of general liability, commercial auto, and workers comp insurance
- Simply Business: Best for finding low-cost coverage (general liability, workers comp, professional liability, and commercial auto insurance)
- NEXT: Best for contractors general liability insurance
- Progressive: Best Overall for commercial auto and commercial truck insurance
- biBERK: Best for low-cost workers comp and commercial auto insurance
CoverWallet: Best for comparing several quotes online
CoverWallet is a digital broker specializing in small businesses. They work with several insurance companies and build a digital experience to help small businesses obtain insurance easily and fast at affordable rates.
They make it very easy to small businesses to get and compare several quotes in one place easily to find the cheapest one. If you are looking general liability insurance, workers comp insurance, or professional liability insurance and prefer comparing several quotes in one place, CoverWallet is a great option to start with.
|– Offer several quotes online, making it easy to compare several quotes online
– Provide several coverages to small businesses in a wide range of industries
– Good option to find the most affordable rates
|– Have to file a claim directly with the insurance company. Can’t file claims through CoverWallet
– Comparing several quotes online may not be available for less popular coverages such as cyber liability insurance or D&O insurance
InsurePro: Best for flexible, on-demand, and pay-per-day small business coverage
InsurePro is another digital broker focused 100% on serving small businesses. They are offering a more innovative solution, allowing small businesses to buy more flexible coverage: on-demand or pay-per-day coverage. This means that you don’t have buy and pay for the coverage for the entire year or month as in the traditional approach.
|– Flexible, on-demand, pay-per-day coverage at affordable rates
– Great digital experience and digital support with the online chat
– Rates are often much cheaper than traditional policies
|– Limited coverages
– Newer company. May not have as much experience and historical performance
– Have to file claims directly with the insurance companies
Simply Business: Best for finding low-cost coverage
Simply Business is another digital broker focused on small businesses. Simply Business wants to make buying small business coverages simple and easy. They also want to help small businesses find the most affordable rates for the coverages. That’s the reason why they focus on finding insurance companies that can afford competitive rates.
|– Great digital experience
– Easy to find the most affordable coverages available
– Agents are friendly, knowledgable, and not pushy
|– May not offer all coverages that small business may need
– Small businesses can’t file a claim with Simply Business. Have to file a claim directly with the insurance companies
NEXT: Best for contractors general liability insurance
NEXT is one of the most successful insuretechs innovating in the small business industry. They specialize in helping small businesses of all industries to buy general liability insurance online. They started by making it super easy and fast for contractors to buy general liability insurance online.
|– Super simple and fast general liability insurance for all types of contractors, including handymen or roofers
– Affordable rates
– Best-in-class digital experience
|– Only offering general liability insurance coverage. Recently expanded to professional liability, but still quite limited
– Newer company, lack of historical performance, especially in paying claims
Progressive: Best Overall for commercial auto and commercial truck insurance
If you are looking for commercial auto or commercial truck insurance only, you definitely need to give Progressive a try. They are the market leader in this industry, insuring the most commercial vehicles, much more than any other carriers.
|– The biggest carrier for commercial auto and commercial truck insurance
– Offer several discounts
– Great digital experience. The only carrier offer 100% quotes online for all types of commercial vehicles
|– Customer satisfaction rating leaves room for improvements
– Rates may be a bit more expensive than others (may be worth for its reputation)
biBERK: Best for low-cost workers comp and commercial auto insurance
If you are looking for affordable workers comp and commercial auto insurance, the two legally required coverages for any small businesses, biBERK is a great option to start with. They are a subsidiary of the Berkshire Hathaway. They cut costs and are able to offer competitive rates by building a direct-to-consumers product and experience.
|– Great digital experience. Customers can do literally everything online from getting quotes to file a claim
– Affordable rates. They claim to save their customers at least 20% on rates
– One of a few carriers offer commercial auto and commercial truck insurance quotes online
|– The coverage limits of their policies tend to be lower than the standard
– If your business is in a niche industry, you may not be able to get quotes from them
What kind of insurance do I need in Maryland?
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?
You want to get enough insurance to protect yourself, but if you get too much insurance, it’s just a waste of money. We recommend a good general liability insurance policy or business owners policy at the bare minimum. 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 protects you if one of your customers and/or vendors injures themselves while on your property. You don’t have to have a particularly risky setting for this to happen: many a customer has tripped over an extension cord and then sued a business. General liability insurance covers their medical bills and your legal costs if they should sue you.
General liability insurance also covers third-party property damage. Anyone who goes to clients’ homes, such as plumbers, contractors, real estate agents need to protect themselves. It really doesn’t take much to accidentally knock an expensive knick-knack off a table or to damage a wall when moving equipment.
Advertising injury means injuries committed by or against a business when it advertises its products or services. It includes 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. There are several components of advertising injury:
- Copyright infringement
- Violating someone’s right to privacy
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 hazards listed on the policy damage your property. Oftentimes, landlords will require you to have commercial property insurance before they will rent or lease a space. Otherwise, they open themselves up to lawsuits should you accidentally damage their property. For example, if you have a candle-making company and one day you set fire to your space and it damages the neighboring business, the landlord wants you to have the insurance to cover these costs (otherwise he/she will be on the hook for it).
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 Maryland, many areas in the state may experience hurricanes during 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, if you are an accountant and somehow you think an “8” is a “3” which causes you to miscalculate the amount of taxes your client owes, they could sue you for this mistake.
Workers comp insurance
Maryland law requires you to have workers compensation coverage 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
- Nonprofits with no paid employees
- Corporate officers who own more than 25% of the business and have no other employees
- Agricultural employers with fewer than three employees
- Businesses with an annual payroll of less than $15,000
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 buy 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.
Estimated workers comp rates in Maryland are 0.90 per $100 in payroll. Workers compensation insurance categorizes every type of job into a four-digit class code. To guesstimate how much you’ll pay for workers compensation, you multiply:
(Payroll/100) x class code x experience modification rate = premium
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).
Maryland law requires you to have at least 30/60/15, or $30,000 bodily injury liability, $60,000 per accident and $15,000 in property liability coverage. You also need $30,000 per person and $60,000 per accident for liability coverage in case you are hit by an uninsured or underinsured motorist. You’ll also need at least $2,500 in PIP (Personal injury protection) although it can be waived in some circumstances.
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. Cybercrime caused $6 trillion dollars in damages in 2022, and it’s only going to get worse. Another disturbing statistic is that 70% of small businesses are completely unprepared for a cyberattack.
Which small business insurance coverage are required in Maryland?
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.
How much does business insurance cost in Maryland?
The average business in Maryland pays about $43 a month, or $516 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 Maryland for different small business insurance coverages:
|Maryland business insurance coverages
|$43 per month
|Business Owners Policy (BOP)
|$124 per month
|Workers comp insurance
|$1.01 per $100 payroll
|Commercial auto insurance
|$108 per month
|Professional liability insurance
|$52 per month
|Cyber liability insurance
|$103 per month
|Commercial property insurance
|$106 per month
Please keep in mind that these are just the average rates that hundreds of thousands small businesses pay in Maryland. 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.
How much you pay for business insurance depends on things like your industry, how much experience you have within that industry, location, revenue, claims history and other factors. The easiest way to save yourself some money is to shop around. Different companies can vary by hundreds of dollars for the exact same insurance, so be sure you compare at least three or four quotes.
How to buy business insurance online in Maryland?
The good news is that for the most common business insurance coverages such as general liability insurance, workers comp insurance, commercial auto insurance, or even professional liability insurance, several insurance companies and digital insurance brokers offer quotes and purchases online. You have several options to buy these coverages online, which allows you to compare quotes to find the cheapest one. Below are a few online options for each coverage for your considerations:
|Buying online in Maryland with carriers
|Buying online in Maryland with brokers (easy to compare several quotes in one place)
|General liability insurance
|NEXT, biBERK, the Hartford
|CoverWallet, Simply Business, and InsurePro
|Workers comp insurance
|The Hartford, biBERK, and THREE
|CoverWallet, Simply Business, and InsurePro
|Commercial auto insurance
|Progressive, biBERK, and THREE
|CoverWallet, Simply Business, and InsurePro
|Progressive liability insurance
|The Hartford, Hiscox, and biBERK
|CoverWallet and Simply Business
Who needs business insurance coverage in Maryland?
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 Maryland: