Business insurance

The main small business coverages, which ones tend to apply to which businesses, and which companies write them.

Companies: 18
Full profiles: 16
Comparisons: 10

The basics

How business insurance works

There is no such thing as a business insurance policy. There is a set of separate coverages, and which ones a business needs depends on what the business actually does, not on how big it is or what industry label it carries.

The reason is that each coverage answers a different question. General liability answers what happens if you hurt someone or damage their property. Professional liability answers what happens if your advice or your work was wrong. Workers compensation answers what happens if an employee is injured on the job. A consultancy with no premises, no employees and no physical product has almost none of the exposures a restaurant has, and the reverse is equally true. That is why a checklist built from industry alone is misleading, and why the useful questions are about activities: do you have employees, do you drive for work, do you handle other people’s property, do you hold customer data, do you give advice people rely on, do you make something people consume.

Some coverages are also compulsory rather than optional. Workers compensation requirements are set by each state, commercial auto is tied to state financial responsibility law, and certain professional licenses and many commercial leases and client contracts require specific coverages at specific limits. Those obligations come from your state, your licensing board and your contracts, not from an insurer.

This line in the database

Companies writing this line: 1816 researched in full
Published comparisons: 10
Tools for this line: 2
Guides that apply: 7

What you are buying

What the coverages do

Each of these is priced and limited separately, so it helps to read them as separate promises rather than as one policy.

General liability: Covers bodily injury and property damage you cause to third parties, plus personal and advertising injury such as libel or copyright issues in your marketing. This is the coverage most leases and client contracts ask for by name.
Commercial property: Covers the building if you own it, and the contents, equipment, inventory and improvements you have made to a space you lease.
Business owner’s policy: General liability and commercial property packaged together, usually with business interruption included. Availability depends on the size and type of the business.
Workers compensation: Pays medical costs and lost wages for employees injured at work, and in exchange generally limits the employer’s liability for those injuries. Requirements, and who counts as an employee, are set by state law.
Professional liability, also called errors and omissions: Covers claims that your professional work or advice caused a financial loss. General liability specifically does not cover this. For medical professions the equivalent is malpractice coverage.
Commercial auto: Covers vehicles owned by the business. A personal auto policy generally excludes business use, so this is not an upgrade, it is the coverage that exists at all.
Cyber liability: Covers the costs that follow a data breach or a ransomware event: notification, legal work, forensics, and liability to the people whose data you held.
Business interruption: Replaces lost income while you cannot operate because of a covered property loss. It follows the property policy, so it responds only to causes that policy covers.

Add-ons

Optional coverages you may be offered

Employment practices liability, for claims of wrongful termination, discrimination or harassment by employees or applicants.
Directors and officers liability, for claims against the people running the company over their management decisions. It matters as soon as there are outside investors or a board.
Commercial umbrella, which sits above the liability limits on your general liability, auto and employers liability coverage.
Inland marine, despite the name, for tools, equipment and property that moves between locations rather than sitting at one address.
Product liability, for harm caused by something you made, sold or distributed. Often part of general liability, but with its own limits and exclusions.
Liquor liability, where alcohol is served or sold, which general liability commonly excludes.
Crime and employee dishonesty, for theft by employees and for funds transfer fraud.
Hired and non-owned auto, for vehicles employees rent or drive for work that the business does not own.

Where cover stops

Common exclusions and limitations

The exclusions are where a policy is actually decided. These are the ones that come up most often on this line.

General liability excludes your own defective work and the cost of redoing it. It covers the damage that work causes to something else.
General liability excludes professional services, which is why errors and omissions coverage exists as a separate line.
Employee injuries are excluded from general liability, because workers compensation is the channel for them.
Damage to property in your care, custody or control is excluded from general liability and needs bailee or inland marine coverage.
Claims-made policies, which is how professional liability and cyber are usually written, cover a claim only if it is both made and reported during the policy period. Letting one lapse without buying tail coverage can leave past work uninsured.
Cyber policies commonly require specific security controls, and can deny a claim if the controls you attested to were not in place.
Contractual liability you took on in an agreement is limited to what the policy defines as an insured contract.
A home-based business is limited or excluded on a homeowners policy, regardless of how small it is.

Pricing inputs

What affects what you pay

01What the business does, in terms of actual operations rather than industry label.
02Revenue, and for workers compensation, payroll by job classification.
03Number of employees, and whether they are employees or contractors.
04Where you operate, and how many locations.
05The limits, deductibles and retentions you choose.
06Your claims history, and for workers compensation, your experience modifier.
07Whether you drive, hold customer data, handle customer property or serve alcohol.
08Subcontractor use and whether they carry their own coverage.
09Documented safety, training and security practices.

The process

How getting a quote generally works

In the order it usually happens. Nothing here is a quote, and this site does not sell one.

1
You complete an application describing operations, revenue, payroll, locations, subcontractors and prior claims.
2
An insurer then decides whether it will write your class of business at all, which is the step that surprises people: appetite varies enormously, and a decline is often about the class rather than about you.
3
Larger or unusual risks go to a broker, who approaches several markets on your behalf.
4
Before you buy, read what your lease and your client contracts actually require, because those requirements set your minimum limits and often name specific coverages and additional insured wording. Buying first and checking later commonly means buying twice.

Glossary

Terminology

The words that appear on a quote or a policy for this line, in plain language.

Occurrence policy: Responds to events that happened during the policy period, whenever the claim arrives. General liability is usually written this way.
Claims-made policy: Responds only to claims made while the policy is in force. Professional liability and cyber are usually written this way.
Retroactive date: On a claims-made policy, the earliest date of work the policy will respond to. Changing insurers can reset it, which silently drops coverage for everything you did before.
Tail coverage: An extended reporting period that lets you report claims after a claims-made policy ends. It is what you buy when you retire, sell or switch carriers.
Certificate of insurance: A one-page proof of coverage for a landlord or client. It is evidence, not a contract, and it does not change what the policy covers.
Additional insured: Someone else, usually a landlord or client, added to your policy so it defends them for claims arising out of your work.
Experience modifier: A multiplier applied to workers compensation premium based on your own claims history relative to others in the same classification.
Aggregate limit: The most the policy pays across the whole policy period, as distinct from the most it pays for any one claim.

Before you buy

Questions worth asking before you buy

Ask these of an agent, or of yourself, before comparing two prices.

What do my lease, my client contracts and my professional license actually require?
Is this occurrence or claims-made, and what is the retroactive date?
Does general liability exclude the professional services I actually sell?
Am I required to carry workers compensation in my state, and does that include owners?
Are my contractors covered, and do I need certificates from them?
Is business interruption included, and what triggers it?
What security controls does the cyber coverage require me to have?
What is the aggregate limit, and what happens if I exhaust it mid-year?
Who is the carrier behind this policy, and what is its financial strength rating?

Who writes it

Companies that write this insurance

Every profile is built from the company's own documentation and from regulators, with the source and the date beside each fact.

All companies

Partial records

We have verified that these companies write this line, but have not finished researching them. Their profiles show only what is sourced.

Side by side

Comparisons for this line

A pair is published only where enough fields are verified for both companies to make the comparison worth reading. No comparison names a winner.

All comparisons

Free tools

Tools for this line

Each one shows its arithmetic and its assumptions. None of them produces a premium, a quote or a savings figure.

Tool

Business insurance needs wizard

Answer nine questions about how your business operates and see which coverage categories to ask about, with the reason each one came up.

Open tool

Tool

Insurance company comparison

Put two companies side by side on the facts we have verified, with the source for each one and an explicit gap where we have not verified something.

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Guides

Guides that apply here

All guides

Guide

How to read an insurance policy without reading all of it

A policy is four kinds of document stapled together. Knowing which part answers which question lets you check the things that decide a claim without reading the whole contract.

Read the guide

Guide

What a deductible actually costs you

A deductible is not a one-time cost. How it resets, how many can apply at once and whether it is a flat amount or a share of a limit all change what you are exposed to.

Read the guide

Guide

Actual cash value versus replacement cost

The same limit pays very differently depending on which valuation method the policy uses, and the method is often chosen for you by default.

Read the guide

Guide

What insurance companies mean by an exclusion

Exclusions are not fine print bolted on to a policy. They are how coverage is defined, and there are only a few reasons any of them exist.

Read the guide

Guide

How to compare two insurance companies fairly

Most comparisons are unfair by accident, because the two things being held up against each other were never the same thing. Here is how to make them comparable first.

Read the guide

Guide

What to do when a claim is denied

A denial is a decision with a stated reason, and the reason determines what you can do about it. Work out which kind you received before you argue with anyone.

Read the guide

Guide

Why the same coverage costs different amounts for different people

Identical coverage carries different prices because insurers are not pricing the coverage. They are pricing the expected cost of the risk behind it, and that is assembled from categories of factor.

Read the guide

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