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Hazard Insurance for Small Business: Cost, Quotes, & Providers

Imagine: Your business burns down or is damaged during a riot or protest. Maybe it’s the victim of a burglary and you lose half your valuable inventory. Would you be able to pay out of pocket to recover from these things and return your business to normal?

The answer for most small business owners is NO.

That’s why they purchase business hazard (also known as business property) insurance to protect against property damage from these types of unexpected events and more.

Finding good business hazard insurance can be challenging, so we’ve done the hard work for you. We identified the top four business hazard insurers for different reasons and answered common questions small business owners have about hazard coverage. Use the information to find the right business hazard insurance and provider for you.

What is business hazard insurance?

Business hazard insurance, more commonly referred to as business property insurance, is a type of small business insurance that protects the buildings that your business operates out of whether you own or rent them. It also covers the equipment you use to run your company.

What does business hazard insurance cover?

Hazard insurance can help cover the costs to repair or replace your:

  • Personal property and that of your employees if it’s damaged because of a covered event, such as a fire or weather-related emergency
  • Tools and equipment whether they’re damaged or stolen
  • Inventory, furniture and computers damaged by a covered event
  • Valuable documents if they’re damaged or stolen
  • Outdoor items on your property such as fences, signage and mailboxes.

If you’re not clear about what’s covered by your business hazard insurance, read your policy, speak with your business insurance agent or a rep at your business insurance company.

Do I need hazard insurance for my business?

Most states don’t require business owners to purchase hazard insurance. Still, it’s a good idea to have it to protect your business property. If you don’t purchase it, you will need to pay for damages and theft out of pocket. Think about it: Could you afford to pay to rebuild your business and replace its contents after a fire? For most small businesses, the answer is NO. Even something like replacing a sign that gets blown down in a wind storm could have a significant impact on cash flow.

What types of events does hazard business insurance protect against?

Hazard insurance typically covers property losses resulting from:

  • Fire
  • Theft
  • Vandalism
  • Explosions
  • Power surges
  • Civil unrest or rioting
  • Lightening
  • Wind
  • Natural disasters, such as blizzards, hail or tornados.

If you can’t open your business because of covered property damage, hazard insurance will also replace a portion of your lost income.

How much does hazard insurance for small businesses cost?

On average, small businesses pay about $60-$90 a month, or $720 – $1,080 a year, for a hazard business insurance policy.

Premium costs can vary dramatically because they’re based on so many factors including:

  • The age and value of the property
  • The contents of your property
  • Your business type
  • The limits and coverage options you choose
  • Whether or not you choose 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 hazard coverage for your business.

How can I find cheap business hazard 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 and compare them to get the best coverage at the lowest cost.
  • Don’t 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 business hazard coverage.

Do I need business hazard insurance if I run my business out of my home?

The answer is probably YES. Homeowners insurance protects your home and it’s contents if anything is harmed by a covered event or stolen. It would not cover any contents that are clearly related to your business. You would need to cover business assets, such as equipment and inventory, with business hazard coverage.

Are there other types of business hazard related coverage I should consider?

If your business is in a state that excludes risks from events like earthquakes, hurricanes or flooding, from standard hazard policies, you may need to get separate coverage.

For example, if you own a beachfront business in Florida, you may need to get separate coverage for hurricane or flood related damage. Similarly, you might need to secure coverage for earthquake damage in certain parts of California.

The reason these things aren’t covered on standard policies is because they’re very likely to happen, so you need to pay significantly more to protect against them.

Some common disaster policies include:

  • Flood insurance, which covers damage to your property that’s caused by different types of flooding, such as from ice or snow melting, flash flooding or storm surges from hurricanes.
  • Earthquake insurance, which covers damage to your property from the effects of an earthquake. 
  • Terrorism insurance, which protects against damage resulting from acts of terror.

A business insurance expert familiar with the perils you face in your area can advise you on the coverages that could make sense for you.

What’s the difference between business property insurance and business hazard insurance?

There is no difference. They are just two ways to refer to the same coverage.

>>MORE: Best Commercial Property Insurance Companies

Top 5 business hazard insurance companies

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

  • CoverWallet: Best for comparing several quotes online
  • Hiscox: Best for small businesses with unique insurance needs
  • The Hartford: Best for businesses looking for a solid and ethical insurer
  • biBerk: Best for low-cost business hazard coverage
  • Liberty Mutual: Best for growing companies

CoverWallet: Best for comparing several quotes online

CoverWallet is a digital business insurance broker. They partner with several business insurance companies. Once you fill out the online application on their website, they are able to pull several quotes from their partner companies so that you can compare them in one place conveniently.

If your main goal is to find cheapest quote, you may want to start with CoverWallet.

They are a subsidiary of Aon, one of the biggest business insurance brokerages. You’d like to know that you have good financial backing. They also earn a good consumer rating (A) from BBB.

Once you buy a policy from CoverWallet, you will have access to their digital dashboard to manage all of your business insurance policies in one place with several great features: downloading the certificate of insurance, renewing a policy, or filing a claim.

Hiscox: Best for small businesses with unique insurance needs

Hiscox offers hazard protection as part of its broader business insurance coverage. You are not able to buy it as a stand alone policy. 

Still, Hiscox makes it easy to purchase business insurance online. You can also speak with helpful and experienced business insurance experts who can help you customize your coverage, including your hazard insurance, to meet your unique business property needs.

If you choose Hiscox for your business coverage, you can rest assured knowing you’re entrusting your business property to a firm that’s been in operation since 1901. It specializes in small business insurance and more than 400,000 smaller companies choose Hiscox for their insurance needs.

Hiscox is known for tailoring unique insurance solutions to the individual requirements of small businesses. The company also offers top tier service, provides fast quotes, instant coverage and quick claims processing.

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, including hazard coverage. 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 business hazard 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 business property (hazard) quote from The Hartford:

biBerk: Best for low-cost business hazard coverage

Similar to Hiscox, you cannot purchase business hazard coverage as a standalone policy from BiBerk.

Still, it’s worth checking them out for your insurance coverage because they’re a low-cost business insurance provider. Despite saving money on your business insurance and hazard coverage, you can rest assured knowing you’re still getting quality protection for your business. biBERK is able to lower insurance costs by almost 20 percent because it insures small businesses directly, without the added costs of having to work through a middleman or insurance broker.

You can rest assured knowing biBerk is a part of Berkshire Hathaway, a company headed by well-known investor Warren Buffett. It’s a firm that has millions of satisfied customers that’s been insuring people and businesses for more than 75 years.

Liberty Mutual: Best for growing companies

Small businesses change over time, and their hazard insurance needs evolve. Liberty Mutual is uniquely able to serve their changing insurance needs. In addition to hazard protection, they offer one of the most comprehensive ranges of business coverages 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 hazard 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.

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