Best Small Business Insurance

Compare the best small business insurance side-by-side

What is small business insurance?

Small business insurance is a type of insurance that can help protect your small business and its assets. Whether you’re dealing with a workers’ compensation claim, property damage, or even a lawsuit, a policy can kick in and save you from hefty out-of-pocket expenses and a damaged reputation. The type of small business insurance you need will depend on your industry, location, business model, and a number of other factors. 

What does small business insurance cover?

The insurance company and coverage you choose will dictate what your small business insurance covers. However, it may protect you in these situations:

• Property damage or bodily injury claims from third parties
• Loss of physical assets or damage from natural disasters or lost income from unforeseen events like theft or vandalism
• Workers compensation claims for employees who suffer on-the-job injuries 
• Negligence claims  

What does small business insurance exclude?

Every small business insurance policy and provider has its own list of exclusions. In most cases, however, small business insurance won’t protect you from illegal activities, preventative maintenance, and some catastrophes like earthquakes and floods. 

What is the most basic form of business insurance?

The most basic form of small business insurance is general liability insurance. It can protect your business from financial loss due to business activities that lead to property damage, bodily injury, medical expenses, slander, and lawsuits. Nationwide’s general liability insurance is highly customizable and offers add-ons that can maximize your coverage and give you additional peace of mind.

The different types of small business insurance

There are five common types of small business insurance, including:

• General liability insurance: This comes into play if a third party suffers as a result of your business activity and includes property damage, libel, and slander.
• Product liability insurance: A property liability policy will protect you if a product you produce causes an injury. 
• Commercial property insurance: Similar to a home insurance policy, commercial property insurance safeguards your office, warehouse, or other commercial property and its assets from damage.
• Home-based business insurance: Home-based business insurance is specifically designed for low-risk home-based businesses and covers injury liability as well as equipment breakdown.
• Business owner’s policy (BOP): A BOP pairs general liability insurance with commercial property insurance. 

This chart shows which type of insurance products each company on our list offers.

	General Liability	Product Liability	Professional Liability	Commercial Property	Home Based Business	BOP	Business Income	Commercial Auto	Cyber Liability	Workers Comp
The Hartford	✅	❌	✅	✅	❌	✅	✅	✅	✅	✅
NEXT	✅	✅	✅	✅	❌	✅	❌	✅	✅	✅
Hiscox	✅	❌	✅	❌	✅	✅	❌	✅	✅	✅
Thimble	✅	❌	✅	✅	❌	✅	❌	✅	✅	✅
Nationwide	✅	✅	✅	✅	❌	✅	✅	✅	✅	✅
Travelers	✅	✅	✅	✅	❌	✅	✅	✅	✅	✅
Chubb	✅	❌	✅	✅	❌	✅	✅	✅	✅	✅

How much does small business insurance cost?

There are several factors that will determine what you pay for small business insurance. These include but are not limited to your industry, location, risk level, claims history, number of employees, and coverage limits. While some insurance companies are transparent about their pricing, others require small businesses to contact them for a quote. In general, you can expect to pay anywhere from $11 per month to about $100 per month. 

Here’s a look at pricing for three of the small business insurance providers on our list. 

NEXT	Hiscox	Thimble
$11/month	$30/month	$17/month

Expert advice for reducing insurance premiums and managing risks

According to Evan Tunis, President of Florida Healthcare Insurance in Coral Springs, Florida, here are some ways you can lower small business insurance costs and risks: 

• Conduct a thorough risk assessment: Before making any changes to your insurance policies, it is important to conduct a thorough risk assessment. This involves identifying potential hazards and risks within the business, assessing their likelihood and severity, and implementing measures to control or mitigate them.
• Implement safety protocols: One of the most effective ways to reduce premiums and manage risks is to implement safety protocols in the workplace. This includes providing proper training for employees, maintaining a safe and clean environment, and regularly inspecting equipment and machinery.
• Review insurance policies annually: Insurance needs can change over time as businesses grow and evolve. That’s why it’s essential to review insurance policies annually to ensure they have adequate coverage for potential risks. This can also help identify any gaps or overlaps in coverage that may need to be addressed.
• Consider bundling policies: Many insurance providers offer discounts for bundling multiple policies together, such as a business owner’s policy (BOP) which combines property and liability insurance. Bundling policies can result in cost savings for small business owners while providing comprehensive coverage.
• Implement risk management strategies: In addition to reducing premiums, implementing risk management strategies can also help businesses avoid potential risks and losses. This includes having a crisis management plan in place, developing backup systems, and regularly backing up important data.

Determining your small business insurance needs

Your state laws can help you figure out what type of business insurance you require. In most states, workers’ compensation insurance is mandatory, for example. You should also consider your current and future contracts to hone in on the right coverage. In addition, ask yourself if you can afford to pay out-of-pocket for worst-case scenarios. If the answer is “no” to any scenario, it’s a good idea to find coverage that will protect you from it.

How to choose the right small business insurance provider

Here are some factors Tunis recommends you keep in mind as you shop for a small business insurance company and request insurance quotes.

• Type of business: The type of business you run will greatly influence the type and amount of insurance coverage you need. For example, a construction company will have different risks and insurance needs than a retail store.
  
• Business assets: Business owners should consider their assets when shopping for insurance. This includes physical property such as buildings, equipment, and inventory, as well as intangible assets such as intellectual property and data.
  
• Business location: The location of your business can impact the average cost of insurance. Factors such as crime rates, natural disaster risks, and local laws and regulations can all affect the premiums you pay.
  
• Industry regulations: Certain industries may have specific insurance requirements mandated by law. It is important for business owners to be aware of these regulations and ensure their insurance policies meet all necessary requirements.
  
• Potential risks: Business owners should carefully consider potential risks their business may face, such as liability claims, cyber-attacks, or property damage. This will help determine the types and amounts of coverage needed to adequately protect the business.
  
• Budget: Insurance premiums can be a significant expense for small businesses, so it is important to consider your budget when shopping for insurance. Business owners should weigh the cost of premiums against the potential costs of not having adequate coverage.

Small Business Insurance Frequently Asked Questions (FAQs)

What are the 3 main types of insurance most small businesses need?

The Insurance Information Institute (III) states that most small businesses could benefit from property insurance, general liability insurance, business auto insurance, and workers’ compensation insurance. It’s often a good idea to invest in a BOP, which combines property and general liability coverage. 

What is a Business Owner’s Policy (BOP)?

A Business Owner’s Policy (BOP) brings together two types of business insurance: business property and business liability coverage. It can come in handy during claims from disasters or those that pop up from your operations, like property damage or bodily injury claims.

Do you need business insurance if you’re the only employee?

Even if your state doesn’t require it, business insurance might make sense if you’re a sole proprietor and don’t have any employees or contractors. General liability insurance is certainly worth exploring, at the very least. You can always add on coverage as you grow.

Methodology: How we chose the best small business insurance companies

From a list of 39 well-known small business insurance companies, we narrowed our focus and zeroed in on 17 of the most popular options. We then selected seven of the best ones based on this criteria, which each accounted for 25% of our overall score: 

• Products: We gave bonus points to companies with quick online quotes and instant coverage options. 
• Claims process: 24/7 claims filing, as well as an online and phone claims process, were important to us.
• Customer support: Insurers with round-the-clock support through multiple channels were prioritized. 
• Reputation: We looked at A.M. Best ratings as well as reviews from current and former customers to understand each company’s reputation and customer satisfaction.