What is business insurance?
Business insurance is a group of policies that protect a company from financial losses. Some cover property you own. Some cover claims made against you. Others cover your employees, vehicles or income if you're forced to close temporarily. Most small businesses need a mix and the right mix depends on what you do, where you work and who you work with.
Personal policies usually exclude business activity. Your homeowners policy may not cover business equipment at home and your personal auto policy may not cover a vehicle used mainly for work. That's why it's important to talk through how your business actually operates.
Types of small business insurance
Types of small business insurance| Coverage | What it pays for |
|---|
| General liability | Claims that your business injured someone or damaged their property, plus advertising injury like accidental libel |
|---|
| Business owner's policy (BOP) | General liability and commercial property in one policy, often with business interruption |
|---|
| Commercial property | Your building if you own it, plus equipment, inventory, furniture and tools |
|---|
| Business interruption | Lost income and ongoing expenses like rent and payroll if a covered loss forces you to close for a while |
|---|
| Workers' compensation | Medical bills and part of lost wages for employees injured or made sick by their work |
|---|
| Commercial auto | Vehicles your business owns or uses for work, like delivery vans and service trucks |
|---|
| Professional liability (E&O) | Claims that your advice, service or mistakes caused a client a financial loss |
|---|
| Cyber liability | Costs after a data breach or cyberattack, like notifying customers, restoring data and legal fees |
|---|
| Commercial umbrella | Extra liability limits above your general liability, commercial auto and employer's liability policies |
|---|
General liability insurance
Covers claims that your business caused bodily injury or property damage to someone else, such as a customer tripping in your store or an employee damaging a client's property. It can also cover advertising injury, like accidental copyright or libel claims. Many leases and client contracts require it.
Business owner's policy (BOP)
A BOP bundles general liability and commercial property insurance and often business interruption coverage, into one policy. It's usually designed for small and midsize businesses with lower risk, like offices, retail stores and some contractors and often costs less than buying each coverage separately.
Commercial property insurance
Covers your building if you own it, plus equipment, inventory, furniture and tools, against risks like fire, theft, vandalism and storms. Flood and earthquake usually require separate coverage.
Business interruption insurance
Also called business income coverage. Helps replace lost income and pay ongoing expenses like rent and payroll if a covered loss forces you to close temporarily.
Workers' compensation insurance
Pays medical bills and part of lost wages for employees injured or made sick by their work. It also generally protects you from being sued by the employee for that injury. Most states require it once you have employees, though rules vary by state and business type.
Commercial auto insurance
Covers vehicles your business owns or uses for work, like delivery vans, service trucks or company cars. If employees drive their own cars for business errands, hired and non-owned auto coverage can help fill the gap.
Professional liability insurance
Also called errors and omissions (E&O). Covers claims that your advice, service or mistakes caused a client financial loss. Important for consultants, accountants, IT firms, real estate professionals, designers and other service businesses.
Cyber liability insurance
Helps pay costs after a data breach or cyberattack, like notifying customers, restoring data, legal fees and in some cases ransom payments. If you store customer data or take card payments, it's worth a look.
Commercial umbrella insurance
Adds extra liability limits above your general liability, commercial auto and employer's liability policies.
Other coverages to ask about
Inland marine for tools and equipment that move between job sites, contractor's bonds, liquor liability for businesses that serve alcohol and employment practices liability for claims like wrongful termination or harassment.
Which business insurance do you need?
Which business insurance do you need?| Business type | Coverage to consider first |
|---|
| Retail store or restaurant | BOP, workers' comp, liquor liability if you serve alcohol |
|---|
| Contractor or trades | General liability, inland marine, commercial auto, workers' comp |
|---|
| Consultant or freelancer | Professional liability, general liability, cyber |
|---|
| Office-based business | BOP, cyber, workers' comp |
|---|
| Business with delivery vehicles | Commercial auto, general liability, workers' comp |
|---|
This is a starting point. Your contracts, lease, state rules and lender may require more. We'll review those requirements with you.
Do I need business insurance if I work from home?
Often, yes. A homeowners policy usually offers limited coverage for business equipment and no liability for business activities. Clients visiting your home, inventory stored in your garage or a laptop with client data can all create risks your home policy doesn't cover. A home business endorsement or a small BOP may help.
What affects the cost of business insurance?
- Your industry and the risks of your work
- Annual revenue and payroll
- Number of employees and their job duties
- Location and value of your property
- Claims history
- Number and type of vehicles
- Coverage limits and deductibles
Certificates of insurance
Clients, landlords and general contractors often ask for a certificate of insurance before you start work. It's a one-page summary showing your coverage and limits and sometimes listing them as an additional insured. Once your policy is in place, you can request certificates from us.
How to compare small business insurance quotes
- Match coverage limits and deductibles across quotes.
- Check that each quote meets your lease and client contract requirements.
- Look at exclusions tied to your specific work.
- Ask how payroll and revenue audits work for workers' comp and liability.
- Compare payment options, since some policies can be paid monthly.
How ChaCha helps small businesses
We ask how your business actually runs, review your contracts and lease requirements and compare small business insurance quotes from the companies we work with. After your policy starts, we can help with certificates, adding vehicles or locations and annual reviews as you grow.
ChaCha Insurance is an independent insurance agency. Quotes are free and asking for one doesn't start or change any policy.
