6 Popular Small Business Insurance Companies (2022)

6 Popular Small Business Insurance Companies (2022)

Small business insurance is an old profession: There’s evidence of “bottomry” contracts drawn up by the merchants of Babylon that date as far back as 4000 to 3000 BC. This early form of business insurance allowed shipowners to take out loans to repair their ships, with the agreement that they wouldn’t have to repay the loan if the ship sank or one of the other “perils” listed came to pass. The insurers also charged interest on the loans to cover the high risk. 

While most small businesses today aren’t worried about their merchandise ending up at the bottom of the ocean, small business insurance is more important than ever, thanks to the array of modern risks business owners face. Babylonian merchants didn’t worry about being sued, which can be as devastating to a modern small business as a sinking ship.

What is small business insurance?

Small business insurance can protect small business owners from being financially liable in the case of lawsuits, property damage, injuries, workers’ compensation claims, or any other losses that may arise while in operation. Different small business insurance companies offer different types of insurance—and various small businesses need different policies, depending on what they do, where they’re located, how many employees they have, and a host of other factors.

10 types of small business insurance

The world of small business insurance can seem complex, stuffed with endless, complicated offers. You’ll need to shop around to know what’s best for your company, but in general, you’ll need at least general liability insurance and workers’ compensation insurance. Here are 10 common types of small-business insurance, which—aside from the first two—may or may not apply to your business, depending on what you do:

1. General liability insurance

General liability insurance provides—you guessed it—broad, general coverage. Most policies protect your business against injury and property claims, as well as libel and slander.

2. Workers’ compensation insurance

If one of your employees is injured on the job, you could be left on the hook for their expenses and compensation. But if you have workers’ compensation insurance, that money comes out of your insurer’s pocket instead.

Workers’ comp insurance can cover costs of medical care, lost wages, disability, and even funeral expenses. This form of insurance is mandatory in every state except Texas for businesses with non-owner employees. Four states even require that you purchase a policy from the state, not a private carrier. 

3. Commercial auto insurance

Commercial auto insurance covers your business if an employee gets into an accident while driving a work vehicle, like a food truck, a construction vehicle, or a delivery van. 

4. Commercial property insurance

Commercial property insurance—also called hazard insurance or business property insurance—helps your business replace the commercial property that’s lost or damaged during operations. This can include real estate (like an office building), furniture, tools, inventory, or other tangible assets your company owns.

5. Commercial umbrella insurance

Commercial umbrella insurance is like an add-on to your existing insurance coverage. It’s a good move if you anticipate that your regular insurance limits won’t cover a massive loss or liability.

6. Business income insurance

Business income insurance—sometimes called business interruption insurance—covers lost income if your business suffers property damage caused by fire, storms, or theft.

7. Employment practices liability insurance

Employment practices liability insurance—also called employers’ liability insurance—covers a business in case an employee makes discrimination, sexual harassment, or wrongful termination claims against the owner or leadership.

8. Cyber liability insurance

Data breaches and ransomware (extortion software that locks you out of your device or encrypts your data until you pay a ransom) can cause actual harm to your customers and your business—and these attacks are rising. Liability insurance helps if you have to inform customers about an attack, compensates them in case of a claim, and pays for free credit monitoring for affected customers.

9. Professional liability insurance 

Professional liability insurance—also referred to as errors and omissions insurance—protects your business against claims that your advice or services caused a customer financial harm. For example, a real estate agent who fails to note mold in a basement can be liable for damages.

10. Business owner’s policy (BOP)

A business owner’s policy (BOP) is a small business insurance package deal. The specifics vary based on your company’s needs and your insurance company’s offerings, but BOPs often include general liability insurance, commercial property insurance, business income insurance, and workers’ compensation.

6 popular small business insurance providers

6. Travelers

Choosing a small business insurance provider can be overwhelming because each company offers slightly different services and pricing. You will generally want to consider your needs, finances, and risks before finding a company that best meets your needs. To help you choose, contact the providers you’re considering for pricing quotes.

Below, find six popular small business insurance providers you may consider using, listed in alphabetical order.

1. Liberty Mutual

Liberty Mutual is one of the biggest insurance providers in the world, and the sixth largest for property and casualty insurance. While they’re mainly known for property and car insurance, other coverage options include:

2. Nationwide

Nationwide has been around for almost a hundred years—the company started in 1926 as Farm Bureau Mutual Automobile Insurance Company. It built on those beginnings to cover much more than farmers and cars, including: 

3. Progressive

Progressive Commercial is best known for its commercial auto insurance but offers a full range of small-business insurance services. Coverage options include:

Progressive also offers more specific insurance, including liquor liability coverage, rideshare insurance, inland marine insurance, excuse, surplus lines insurance, employee pet insurance benefits, and employee health insurance.

4. State Farm

Every State Farm agency is independently owned, so it’s not only selling small business insurance, it’s also a small business owner itself. It offers industry-specific insurance for every growth stage of your business. Coverage options include:

5. The Hartford

The Hartford is one of the oldest small business insurers in the United States, with more than 210 years of underwriting. It started as a fire insurance company but today offers a wide range of customizable small business insurance options, including:

6. Travelers

Travelers is known for providing commercial property insurance. In addition to the US, it also offers coverage in the UK and Canada, making Travelers a good option for international companies. Coverage options include:

Small business insurance FAQ

What are the different types of business insurance?

There are many different types of business insurance. Common policies include general liability, workers’ compensation, commercial auto, commercial property, commercial umbrella, business income insurance, and industry-specific insurance coverage policies.

What kinds of insurance are commonly carried by small businesses?

The most common kinds of insurance for small businesses are general liability, workers’ compensation, commercial property, and business income insurance, which can be combined into a business owner’s policy (BOP).

How much does insurance cost for a startup business?

Progressive and Insureon report that the median cost of general liability insurance hovers around $500 per year. But insurance costs vary greatly depending on the size of your business, your line of work, your provider, and the policy type. A freelance graphic designer, for example, will pay much less than a transportation company. Your best bet is to get quotes from a few different providers for comparison.

Do you need insurance to run a business?

While laws vary from state to state, the US federal government requires any company with employees to have workers’ compensation (except Texas for businesses with non-owner employees). Four states (North Dakota, Ohio, Washington, and Wyoming) even require that you purchase a policy from the state, not a private carrier.

This content was originally published here.

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