Small Business Insurance

What Is Small Business Insurance?

Small business insurance is a set of policies that help protect a small business from financial loss caused by accidents, lawsuits, property damage, and other covered risks.

What Does Liability Insurance for Small Businesses Usually Include?

Small business liability insurance typically includes a variety of coverages designed to shield against the most common risks your business faces.

While different business types have varying coverage needs, the following are some of the most common coverage types small business owners carry. You may also be legally required to carry certain coverages depending on the nature of your business and the laws in your state.

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Coverage Type	What It Covers	Example
General liability	Third-party bodily injury, property damage, personal and advertising injury	A customer slips in your store and gets hurt
Professional liability (aka errors and omissions, or E&O)	Claims that your advice or services caused a financial loss	Client says your consulting advice caused a dip in revenue
Product liability	Bodily harm or property damage caused by products you sell or manufacture	Defective packaging on one of your products injures a customer
Commercial property	Your building, equipment, inventory, and other business property	A fire damages your office and destroys business equipment
Business income/interruption	Some lost income when a covered event shuts you down	A fire forces you to close your shop temporarily
Workers compensation	Employee work-related injuries and illnesses	One of your employees is hurt while lifting boxes and needs medical care and rehabilitation
Cyber liability/data breach protection	Certain costs from hacks, data breaches, or ransomware	A hacker steals customer payment details from your systems
Inland marine/tools and equipment	Damage or theft of your mobile business gear	A client accidentally spills coffee on your business laptop

What Businesses Use This Coverage?

Small businesses that need this type of coverage include:

Alcohol-serving businesses
Artists and crafters
Beauty and bodywork professionals
Cannabis businesses
Cleaning businesses
Consultants
Educators and mentors
Entertainers
Event organizers
Fitness and sports professionals
Food businesses and restaurants
Health professionals
Landscaping businesses
Pet care professionals
Photographers and videographers
Product businesses
Vendors

Insurance Canopy covers businesses in each of these categories. Search by industry to see if your business qualifies.

How Does Insurance Protect Your Small Business?

Small business liability insurance acts like a financial safety net when things go wrong. It helps cover the expenses you face after a covered incident, so you aren’t forced to pay entirely out of pocket.

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Incident	Usually Covered by Small Business Insurance?	Usually Not Covered/Needs Different Coverage
Injuries to customers or visitors	Often yes, under general liability	Employee injuries (workers compensation needed instead)
Damage to business property from a covered incident (e.g., fire)	Often yes, under commercial property	Wear and tear, maintenance issues, and intentional damage
Mistakes in professional advice or services	Often yes, under professional liability (E&O)	Deliberate fraud or criminal acts
Some lost income after a covered shutdown	Sometimes, under business interruption coverage	Loss of income from general economic downturns
Work-related employee injuries	Usually, under workers compensation	Independent contractors, depending on state rules

Not sure if small business insurance is necessary for your business? Here are some signs you can’t go without it:

You work with clients, customers, or the public in person or on-site
You sign contracts with venues, landlords, or clients that require proof of insurance.
You sell products, whether online, at markets, or in-store
You rent or own space for your business or store equipment, tools, or inventory at a fixed location
You bring your business gear with you to different locations
You have (or plan to have) employees
You handle customer data, payments, or sensitive information
Losing one big client payment or dealing with one big accident would seriously hurt your cash flow

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