Your small business vision board: sales growth, staying power, and … getting insured? That last step should be on there! Even though finding the right insurance coverage can feel like taking that first leap of business ownership faith (scary!), it’s vital to your success.
| You... | So You Need... |
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Own a business that interacts with the public |
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Offer professional services |
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Sell Products |
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Have employees |
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Rely on equipment and inventory |
These are the basics. We’ll go over what’s required, what’s smart, and what’s skippable for your business below!
What Are You Trying to Protect With Small Business Insurance?
As you look for small business insurance coverage, the main question to ask yourself is, “What am I trying to protect?”
Your business faces multiple exposures, or things that put you at risk of loss. Different coverages step in like your personal security guards to protect you from those risks.
Protect What You Can’t Afford to Lose:
- Profit
- Business property
- People (employees, clients)
- Your professional reputation
You’re building your business from the ground up — it’s all worth protecting right now!
Insurance for Small Businesses: The Essentials
Shopping for small business insurance is kind of like shopping for a kid. You want coverage that fits now but will also grow with you. Here are the most essential insurance types for self-starters like you.
- Covers third-party injury and property damage
- Required for most leases and vendor contracts
Do you own a business? Yes, you need this coverage. Full stop. It’s the most important insurance for small business owners because it protects you from accidents that happen simply because your business interacts with the public.
Designed to cover:
- Customer slip-and-falls
- Damage to customers’ property
- Fire damage to your rented space
- Non-physical (advertising) injury
A third party is anyone other than you, your employees, or your insurer. They’re typically customers at your business.
Professional Liability Insurance
- Covers claims related to your services
- Also known as “errors and omissions” (E&O)
Do you offer professional services or advice to clients? If so, you need this coverage in case you ever make a mistake (it happens!) or a client claims you didn’t do your job correctly.
Designed to cover:
- Real or perceived mistakes
- Recommendations that backfire
- Failure to deliver services
- Covers product-related claims after the sale
- Required for most vendor contracts
Do you sell products? You need this coverage to protect your business if your products ever cause harm to a customer. Even if you don’t think your products are risky enough, trust us — there are so many ways things can go wrong after they leave your hands.
Designed to cover:
- Allergic reactions to products
- Accidents due to defects or mislabeling
- Manufacturing flaws
Workers Compensation Insurance
- Covers employee injuries at your business
- Required if you have employees in nearly every state
Do you have at least one employee? If so, you’re legally required to offer workers compensation, but the specific rules vary by state. This is protection for your employees in case they get hurt while working for your business.
Designed to cover:
- Medical bills
- Lost wages
- Disability benefits
Covers movable business personal property
Also called “tools and equipment” coverage
Do you rely on tools, supplies, and inventory to stay in business? If so, you need inland marine to protect your business essentials in case they’re stolen or damaged (so you can keep doing what you love!).
Designed to cover:
- Inventory you ship or move from place to place
- Equipment you use to make products or offer services
- Business property used for mobile operations
Learning Break
Your business is unique, so don’t settle for one-size-fits-all coverage! From diving deeper into coverage details or learning how to read an insurance policy, Insurance Canopy’s resource center has you covered. Check it out here.
Additional Coverages That Make Sense for Certain Businesses
Depending on your business type, you might also need some of these additional coverages.
| You... | So You Need... | To Cover... |
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Own or lease a physical space or have expensive equipment |
Damage to your business space or contents from fire, theft, and more |
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Store customer info or accept payments online |
Data breaches in case customer data is stolen |
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Sell or serve alcohol |
Legal costs and damages if someone gets injured after drinking alcohol you provided |
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Own and drive a vehicle for business use |
Commercial Auto Insurance |
Claims involving your business vehicle |
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Use personal or rented vehicles for business |
Hired/Non-Owned Auto Insurance |
Claims involving a vehicle your business doesn’t own |
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Make, manufacture, or distribute products |
Costs to recall a product |
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Hire employees |
Employment Practices Liability Insurance (EPLI) |
Employee lawsuits over claims like discrimination or wrongful termination |
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Offer employee benefits |
Employee Benefits Liability Insurance
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Mistakes made in offering benefits to employees
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Need to prove your work will be completed (often required by contracts) |
Financial guarantees to clients that you’ll complete the work as agreed |
What Business Insurance Do You Need?
Take a thorough look at your business operations — from vendor contracts to client bookings — and note all of the exposures you face. From there, match those gaps with the proper coverages to find your perfect protection plan.
Picture This: Jamie’s Insurance Needs
Jamie owns a small photography business. She works out of a home office, travels to client shoots, and occasionally hires a second photographer for big events. She uploads photos and books clients online.
Here’s the coverage Jamie carries and why.
| Coverage | Why Jamie Needs It |
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General Liability |
Covers her if a client trips over equipment during a session or if she accidentally damages a venue |
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Professional Liability |
Covers her if she’s unable to deliver the promised images or if a client is dissatisfied with her work |
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Workers Compensation |
Required when she brings on a second photographer, even for freelance gigs
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Inland Marine |
Covers her home office equipment, plus her expensive camera gear when she’s traveling between jobs or working off-site
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Cyber Insurance |
She stores client photos and payment data online, which covers her in case of a hack or ransomware attack
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Jamie’s insurance package costs her about $60/month, but it protects thousands in gear, her livelihood, and her legal liability. Without it, a single claim could wipe her out.
Finding Affordable Insurance for Small Business Owners
Whether you’re in the “about to take a chance” or “wow, I’m actually making money doing what I love” stage, you need affordable coverage that shows up when it counts. Insurance Canopy is here by your side at every step.
Small business owners pay an average of $20 a month for general liability insurance with us and customize their policies with add-ons that fit their needs just right. Plus, most of our plans are ready to buy online with just a few clicks!
Find small business insurance coverage easily and enjoy peace of mind to grow your business confidently. Hey, that vision board is looking pretty achievable now. Click below to get covered.
FAQs About Liability Insurance for Small Businesses
Is Business Insurance Required by Law?
Some types of business insurance, like workers compensation and commercial auto, are required by law, depending on your state and whether you have employees. Other coverages, like general liability, are usually required by landlords or clients even if not legally mandated.
What Kind of Insurance Does a Small Business Need?
Most small businesses need general liability insurance, at minimum, but depending on their operations, they may also benefit from coverages like professional, product, or cyber liability.
To get the most comprehensive coverage for your small business, call us at 844.520.6993 — our licensed, non-commissioned agents are ready to help!
How Much Does Business Insurance Cost for a Small Business?
Insurance Canopy’s most popular plans cost between $10 and $99 per month. Your final premium cost depends on your unique business details and any optional coverages you select.
What Is a Business Owner’s Policy (BOP) for Small Businesses?
A business owner’s policy (BOP) combines general liability and commercial property insurance into one easy package. It’s a common business insurance policy structure for small business owners who need coverage for lawsuits and physical loss.
