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Small Business Insurance: What Coverage Do You Need?

As a business owner, you face countless risks every single day. This includes things like slips and falls in the workplace that result in injuries, fires and other emergencies, theft, vandalism, lawsuits and mistakes made while conducting business. 

The most important thing business owners can do to get control over these risks is to get business insurance coverage, which can protect you against all these things and much more. 

Getting a business insurance policy helps protect the company you’ve worked so hard to build. Small business insurance helps cover the property and income of an organization and safeguards it against liability claims.

In this article, we’ll cover the top five business insurers in the United States and explain what makes them the best at what they do. We will also provide information about business insurance so you’ll have the knowledge you need to get the right coverage at the best possible price. 

What is business insurance for?

Business insurance can help you gain control over your company’s risks, which are considerable. It provides you with financial protection against losses that occur while conducting business. When you have business insurance coverage, your insurer helps pay the costs of covered losses up to the limits of your policy. Without coverage, you might have to pay out of pocket.

Why do I need business insurance?

The purpose of the insurance is to help protect your company from common risks most businesses face, along with industry specific ones. It can protect the financial assets of your company, it’s physical property, employees and intellectual property from:

  • Lawsuits
  • Property damage
  • Theft
  • Vandalism
  • Loss of income
  • Employee injuries and illnesses
  • And more.

What kind of business insurance do I need?

The most common types of business insurance coverage include:

The simplest way to secure all these types of coverage is through a business owners policy (BOP), which typically bundles together business property and liability coverage. A BOP makes it easy to add on additional types of coverage beyond these.

The types and amount of coverage you need depend on a number of factors including: 

  • Your industry 
  • The size of your business
  • It’s location or locations
  • The number of employees
  • Work experience
  • And more.

At a minimum, you probably want to have liability and property coverage through a BOP. And if you have employees, you’ll probably need workers’ compensation insurance. When you apply for coverage online, it’s likely that the insurer will offer up the additional coverages you need. An experienced business insurance agent or company rep will be able to recommend coverages to you, as well.

What does business liability insurance cover?

Liability coverage protects your company against claims related to:

  • Bodily injury
  • Property damage
  • Advertising errors
  • Errors or omissions made while conducting business.

The first three are covered by a general liability insurance policy and the last one is cover by a professional liability insurance policy.

Without liability coverage, you may be responsible for paying a wide range of legal costs out of pocket. This can get very expensive because you could be forced to pay attorney fees, settlement payouts, discovery expenses and other court related costs.

What do business property policies cover?

  • Imagine that your business burns down because of a fire.
  • Or the roof on it is severely damaged during a windstorm.
  • Maybe your warehouse is cleared out during a burglary.

Would you be able to pay to recover from these unexpected events out of pocket?

The answer for most small companies is NO. That’s why so many go out of business when they experience a business property loss.

Commercial property insurance helps to pay for property losses that result from:

  • Fires
  • Storms
  • Theft
  • Vandalism
  • And any events covered by the policy.

Commercial property insurance typically does not cover damage from hurricanes, floods or earthquakes. You’ll need to get additional coverage for damage resulting from these extreme events.

This coverage helps you pay for damage to the physical location of your business, tools, assets and documents. It may also help cover lost income if your business is unable to operate while repairs are made.

How can I prevent business losses? 

Many business insurers offer programs that can help you reduce business related risks. This includes doing things like eliminating workplace hazards, encouraging safe driving habits and promoting sound work practices. By doing these things, you could be able to save on your business insurance costs. Check with your business insurer to find out whether they offer workplace safety programs.

What is workers’ compensation coverage and do small businesses need it?

If your business has employees, your state likely requires you to carry workers’ compensation coverage.  This insurance provides benefits to your employees to help them recover from work-related injuries or illnesses. Some examples of these include:

  • A clerk at your store is stocking shelves, slips off a ladder and breaks her leg. This makes her unable to do her job.
  • An administrative assistant at your business has been working on a computer while sitting on an ergonomically poor chair and comes down with carpal tunnel syndrome. She is no longer able to do her job because she’s in pain.
  • A carpenter at your cabinet factory has been breathing in saw dust and chemical odors for years and comes down with lung disease. His doctor will not allow him to return to work.

Workers’ comp also pays funeral expenses and death benefits to immediate family members should an employee pass away because of a job related incident.

What coverages should businesses with employees get?

As covered in the section above, most states require businesses with employees to carry workers’ compensation insurance. In some states, you may also need to provide disability coverage.

You may also want to consider getting employment practices liability insurance. It helps protect your business if a current or former employee makes an employment-related claim. For example, if you are sued for wrongful termination or discrimination, employment practices liability insurance can help cover your legal costs.

Also, if you or your employees drive their own or company owned vehicles for work, it’s a smart idea to get commercial auto insurance. That’s because personal auto insurance does not cover accidents that take place while conducting business. If you have a work-related incident, you would have to pay for any damage or injuries that happen to you and your vehicle and anyone else impacted by the accident.

Is there an easy way to get business insurance coverage?

A business owner’s policy (BOP) combines general liability and commercial property insurance. Combining these coverages in a single policy makes it easy to manage your business insurance. Plus, a BOP makes it simple to add other types of coverage to the policy. A BOP is one of the simplest and most efficient ways to secure business insurance coverage.

How much does small business insurance cost?

On average, small businesses pay $2,828 a year or $236 a month for business insurance. Premium prices can vary dramatically because they’re based on so many factors including:

  • The age and value of your business property
  • The contents of your property
  • Your business type
  • The limits and coverage options you choose
  • Whether or not you select full or partial replacement cost
  • And more.

What’s important is that you get quotes from multiple providers so you can compare coverages and costs to get the best and most cost effective coverage for your business. Working with a digital broker like CoverWallet is a more convenient way to get several quotes:

>>MORE: How Much does Business Insurance Cost?

How can I find cheap business insurance?

Here are some tips to help you find the coverage you need at a fair price:

  • Shop around for the best value. Get quotes from a few companies or compare the multiple quotes generated by a service like CoverWallet. 
  • Never stop shopping around. Make sure you get new quotes before you renew your policy.
  • Take advantage of discounts. If they’re not offered to you when getting a quote, ask about them, whether you’re buying online or through an agent.

Taking these steps will help ensure you’re not paying too much for your small business insurance.

Top 5 small business insurance companies

Here are our choices for the best business insurers in the United States:

  • CoverWallet: Best for businesses that want to compare quotes quickly
  • Hiscox: Best for small businesses with unique insurance needs
  • The Hartford: Best for businesses looking for a solid and ethical insurer
  • Liberty Mutual: Best for growing companies
  • Next: Best online experience

CoverWallet: Best for businesses that want to compare quotes quickly

CoverWallet is a cutting-edge insurance provider. The firm has developed its own state-of-the-art platform, based on its own algorithms, to ensure it is able to connect small businesses with all the business insurance they need, at the most reasonable price. The platform makes it quick and easy to get quotes from several providers at once, making it possible to compare quotes from highly reputable insurers all on a single screen.

The firm’s experts have used their extensive experience to make sure you only have to input the information needed to generate quick and accurate quotes. The entire process should take ten minutes or less.

You can feel confident knowing that CoverWallet is a part of Aon, an established company that provides advice to businesses on things like risk, health and retirement.

Once you get your quote, CoverWallet makes it easy to purchase business insurance online or through an agent. When you get your policy through CoverWallet, it’s simple to manage your coverage online, including downloading a certificate of insurance, filing a claim, renewing your insurance and more. 

Here is an example of a business policy overview for a small advertising agency from CoverWallet.

Hiscox: Best for small businesses with unique insurance needs

Hiscox offers a complete array of business coverages and is a leading insurer that specializes in small business insurance. 

Hiscox makes it easy to purchase all types of business insurance online. You can also speak with experienced business insurance experts who can help you customize your coverage to meet your unique company needs. Hiscox also offers top tier service, provides fast quotes, instant coverage and quick claims processing.

If you choose Hiscox for your business coverage, you can rest assured knowing you’re entrusting your organization to a firm that’s been in operation since 1901. More than 400,000 companies choose Hiscox for their coverage.

The Hartford: Best for businesses looking for a solid and ethical insurer

The Hartford is one of the oldest companies of any kind in the United States. It’s been offering insurance solutions for more than 200 years and has helped one million plus businesses with their insurance needs. The company takes pride in the fact that the Ethisphere Institute named The Hartford a World’s Most Ethical Company twelve times. The Hartford’s longevity and focus on ethical business practices makes it a company that you can feel good about doing business with.

The Hartford’s dedicated and highly experienced small business team is available to help company owners explore their insurance options. If you decide to purchase insurance from The Hartford, you can rest assured knowing you’re entrusting your business to a strong, stable, knowledgeable and ethical provider.

Here is an example of a small business insurance quote from The Hartford for an advertising agency.

Liberty Mutual: Best for growing companies

Small businesses change over time, and their insurance needs evolve. Liberty Mutual is uniquely able to meet their changing coverage requirements. Liberty offers one of the most comprehensive ranges of business coverage of any insurer. They are able to customize policies to meet the needs of virtually any business. In addition to this, their experts are always looking ahead to identify new business hazards and find efficient ways to cover them.

In addition to its flexibility, Liberty Mutual is a Fortune 100 company and one of the largest insurance firms in the United States and across the globe. You can feel confident knowing that Liberty Mutual will have the funds to cover any claim you make.

You can’t buy business coverage direct from Liberty Mutual, but there are thousands of agents affiliated with the company across the United States who can provide you with the insurance you need.

Next: Best online experience

Next is changing how businesses purchase insurance.

Their operation is focused on delivering the ultimate online insurance experience. Because of this, you’re able to purchase a policy, file a claim or get a certificate of insurance any place, any time, 365 days a year. Even though Next is an online insurer, you can get expert help over the phone when you need it. The firm is also known for being able to make most claims decisions within 48 hours.

Even though Next is a relatively new and innovative company, you can rest assured knowing it has an excellent rating from A.M. Best, an insurance company rating agency. All the company’s policies are backed by MunichRe, an established insurance firm and reinsurer. More than 10,000 business owners have turned to Next for their insurance needs. The firm has earned a solid 4.7 customer rating. 

One caveat about Next: It offers insurance coverage for a limited number of industries.

Here is an example of a small business insurance quote for a small advertising agency from Next:

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