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Whether you’re in the retail, construction or financial services industry, most small business owners need small business insurance. Having it can help protect the livelihood you’ve worked so hard to build. The right small business coverage can help cover expensive damage and lawsuits from:
- Natural disasters
- Professional errors
- Workers’ comp claims
Find the Right Type of Insurance for Your Small Business
Small business insurance helps protect your company’s personal property and income. It also helps safeguard you against liability claims. Learn more about what small business insurance is.
General Liability Insurance
This helps protect your business and its assets in the event of a lawsuit for things like negligence, bodily injury, property damage, libel and slander.
Workers’ Compensation Insurance
Most state laws require you to carry this insurance to help compensate employees for expenses associated with work-related injuries or illnesses like medical bills, rehabilitation and lost wages.
Data Breach Insurance
Data breach insurance, also known as cyber insurance, helps cover liability expenses from technology-related risks such as a data breach or cyberattack. If you collect, store, send or receive customer information, it’s important to protect against cyber risks.
Commercial Auto Insurance
Commercial auto insurance helps cover the cost of an auto accident if you or your employee is at fault. If you or your employees drive a vehicle for business reasons, having the right commercial vehicle insurance is important.
Professional Liability Insurance
Professional liability insurance helps protect you and your company if you’re found negligent in the professional services you provided to a client, even if you didn’t make a mistake.
Business Property Insurance
Business property insurance, also called commercial property insurance, helps protect your owned or rented building, tools and the equipment you use to operate your business.
Business Income Insurance
Business Income Insurance, also known as business interruption coverage, helps replace your lost income if you can’t operate because of covered property damage. This includes damage from a fire, wind or theft.
How Much Does Small Business Insurance Cost?
On average, the cost of small business insurance is about $85 per month and $1,019 per year. Keep in mind that the cost of insurance varies because every small business is different and faces unique risks. What you’ll pay depends on different factors, like:
- The type of insurance you need
- Your claims history
- What industry you’re in
- The number of employees you have
- Your payroll
To save money, you can consider bundling coverages, like with a Business Owner’s Policy.
Learn more about small business insurance costs.
Who Needs Small Business Insurance?
Every small business has unique needs and risks associated with what they do. Having the right business insurance coverage is the best way to safeguard your business from unexpected events and accidents.
Frequently Asked Questions About Small Business Insurance
Most states require some form of insurance for small business owners. No matter how careful you are, accidents can happen. When they do, having the right types of coverage can make all the difference. Without business insurance, you’d have to pay out of pocket for costly claims like lawsuits, libel, bodily injury, property damage and other unexpected events. Learn more about insurance needed for small business.
There’s not a one-size-fits-all small business insurance policy that covers every claim. The best small business liability insurance policy for one company may not be good for your company. Many small business owners start with a BOP because it contains liability and property coverage. A BOP can help protect your business from:
- Claims that it caused bodily injury or damage to someone else’s belongings
- Damage to the owned or rented building and equipment used to operate
- Losing income if you can’t operate because of covered property damage
We proudly partner with more than 1.5 million small business owners throughout the country. If you’re looking for more information about how to get small business insurance where you live, check out ourstate business insurance page.
Registering your business as a limited liability company (LLC) doesn’t protect your business from risks. We created our LLC insurance specifically for small business owners. The cost of LLC insurance can help keep you covered from devastating financial losses.
Three essential types of business insurance you may need when starting a small business are:
- General liability insurance
- Business property insurance
- Business income insurance
Our BOP bundles these threetypes of business insurance together to make it easier for you to protect your company.
Whether you’re starting a new venture or expanding your operations, nearly all small businesses will need extra capital at some point. Whatever the reason, there are several financing options available for small business owners to choose from. The Hartford has partnered with leading lenders to help you find the right small business loan for your business.
- Assess your business operations.
- Consider your risks.
- Get a custom quote from a trusted insurance company or agency.
- Choose the best rate and coverage for your business’ needs.
- Business Owner’s Policy (BOP): A BOP is the most common type of business insurance because it combines business property and general liability insurance into one policy. A BOP can be customized to the specific needs of your industry. This makes it a great option for businesses of any size, especially small businesses.
- General Liability Insurance (GLI): General liability insurance helps protect your business and its assets if you are sued by a third party for things like negligence, bodily injury, property damage, libel and slander. GLI covers a wide variety of claims resulting from unexpected events, like a burglary or a customer slipping and falling. This coverage can help pay your defense costs and any judgments or settlements that result from a lawsuit.
- Workers’ Compensation Insurance: If your business has any employees, most states will require you to have workers’ compensation insurance. Workers' compensation insurance gives employees medical, wage and other financial benefits if they’re injured or become ill on the job. Be sure to check with your state laws to find out if you need workers’ compensation.
Ready to Tailor Your Small Business Insurance?
Our specialists are here to help ensure you have the right kind of small business insurance, personalized to your company’s unique needs.
Read Small Business Claim Reviews (by product)
Workers' Compensation Insurance
Commercial Auto Insurance
Commercial Property Insurance
General Liability Insurance
Last Updated: January 2, 2024
1 Premium amounts presented are based on monthly premium paid by The Hartford's Small Business customers between 1/1/22 and 9/14/23 for 12-month policies. Premium is derived from a number of factors specific to your business and may vary.
*** Based on a 2021 study by Keynova (formerly Dynatrace).
Additional disclosures below.
I'm an expert in the field of small business insurance, with extensive knowledge and experience in various insurance coverages. Over the years, I've worked with numerous small business owners, helping them navigate the complex landscape of insurance to safeguard their enterprises. My expertise extends to different industries, including retail, construction, and financial services, giving me a comprehensive understanding of the unique risks each business faces.
Now, let's delve into the concepts mentioned in the provided article:
General Liability Insurance:
- Definition: This type of insurance protects a business and its assets in the event of a lawsuit for things like negligence, bodily injury, property damage, libel, and slander.
- Example: If a customer slips and falls in your retail store, general liability insurance would cover the medical expenses and potential legal costs associated with the injury.
Workers’ Compensation Insurance:
- Definition: Most state laws require businesses to carry this insurance to compensate employees for expenses related to work-related injuries or illnesses, including medical bills, rehabilitation, and lost wages.
- Example: If an employee in a construction business is injured while operating heavy machinery, workers' compensation insurance would cover their medical expenses and provide wage replacement.
Data Breach Insurance (Cyber Insurance):
- Definition: This insurance covers liability expenses arising from technology-related risks such as data breaches or cyberattacks.
- Example: In the event of a cyberattack on a financial services business that compromises customer data, data breach insurance would cover the costs associated with notifying affected parties and managing the aftermath.
Commercial Auto Insurance:
- Definition: This insurance helps cover the cost of an auto accident if you or your employees are at fault while driving for business purposes.
- Example: If a delivery vehicle owned by a retail business is involved in a collision, commercial auto insurance would cover the repair costs and potential liability for bodily injury or property damage.
Professional Liability Insurance:
- Definition: This insurance protects a business and its professionals if they are found negligent in the professional services provided to a client, even if no mistake was made.
- Example: In the financial services industry, if a client incurs losses due to alleged financial advice, professional liability insurance would cover legal expenses in defending against a lawsuit.
Business Property Insurance:
- Definition: Also known as commercial property insurance, it helps protect owned or rented buildings, tools, and equipment used to operate the business.
- Example: If a fire damages the office space of a consulting business, business property insurance would cover the cost of repairing or replacing damaged property.
Business Income Insurance (Business Interruption Coverage):
- Definition: This insurance replaces lost income if a business can't operate due to covered property damage, such as damage from a fire, wind, or theft.
- Example: If a retail store is temporarily closed due to fire damage, business income insurance would cover the lost revenue during the closure.
These concepts collectively form a comprehensive framework for small business insurance, addressing various aspects of risk management tailored to the unique needs of each business. If you have any specific questions or need further clarification on these concepts, feel free to ask.