The 2022 Guide to Small Business Liability Insurance
Small business liability insurance can provide coverage for your business during difficult times. Read about the best providers for more information.
Small business liability insurance is a type of insurance that is intended to protect your business from any claims that might come against it. Claims could include personal injury, property damage, and/or defective products.
What Insurance Do You Need for a Small Business?
When you’re buying small business insurance, your coverage decisions will depend on your business’s type and size. Here are common coverage types.
General liability insurance gives a business protection against liability claims such as bodily injury and property damage to others.
Commercial property insurance covers the physical property of your small business, such as fire damage or theft.
Workers compensation insurance offers coverage for when an employee becomes ill or injured because of their job. It’s required in most states, but rules on who has to be covered vary.
Commercial auto insurance covers the vehicles you use for business purposes. A personal auto insurance policy generally doesn’t extend to business use of a vehicle.
Errors & omissions (E&O) will pay for liability costs if a customer or client accuses you of making a mistake in your professional services.
Inland marine insurance protects business property that’s being transported over land.
Cyber liability insurance can pay for recovery costs if your computer system and data gets hacked.
What Does Small Business Insurance Cover?
Here’s a closer look at top coverage types for small businesses.
General liability insurance pays for legal costs such as hiring an attorney and any judgments against you and your business. General liability insurance includes coverage for damage to reputation such as slander or libel and copyright infringement.
Liability insurance pays others, not your own business. It’s also known as business liability insurance.
Commercial property insurance covers a number of business items including computers and workstations, desks and chairs, business records, business inventory and supplies. Commercial property insurance can also cover a business’s office and business building.
Commercial property insurance is also called business property insurance.
Workers compensation insurance offers several benefits to employees who are sick or injured because of their jobs. This includes medical care, physical therapy and compensation for lost wages. Death benefits for an employee’s family are available if an employee passes away from a work-related illness or injury.
Businesses buy workers comp insurance for employees and this insurance is required in most states.
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Do You Need a Business Owners Policy (BOP)?
If you are a small business owner, you may wish to consider a business owners policy (BOP). A BOP includes:
General liability insurance
Commercial property insurance
Business interruption insurance, which helps you recover lost business income if your business is unable to open because of a problem such as a fire
A BOP is less expensive than buying separate insurance policies for this same coverage. So consider whether a BOP is right for you.
Do You Need Commercial Auto Insurance?
A commercial auto insurance policy is the right way to cover vehicles that you use for business, whether it’s a company car or a commercial truck or van.
If you get into an accident while driving the vehicle for business, your personal insurance policy won’t cover the claim.
What Does Small Business Insurance Not Cover?
There are instances where small business insurance doesn’t offer coverage, such as:
Flood damage to your business. You would need to have a separate commercial flood policy for flood coverage
Fraudulent and intentional acts
Wrongful termination, unless you have an employment practices liability policy
Methodology
We ranked business insurance companies based on complaint data for commercial liability and commercial property insurance in 2020. Complaint data is based on complaints upheld by state insurance departments in every state and collected by the National Association of Insurance Commissioners.
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