Amy Danise is the managing editor for the insurance section at Forbes Advisor, which encompasses auto, home, renters, life, pet, travel, health and small business insurance. She is a highly experienced editor, writer and team leader with an extensive background in the insurance sector. With a career spanning more than three decades, she has focused her work on consumer-oriented publications.
Amy Danise is the managing editor for the insurance section at Forbes Advisor, which encompasses auto, home, renters, life, pet, travel, health and small business insurance. She is a highly experienced editor, writer and team leader with an extensive background in the insurance sector. With a career spanning more than three decades, she has focused her work on consumer-oriented publications.
Editorial Note: We earn a commission from partner links on Forbes Advisor. Commissions do not affect our editors’ opinions or evaluations.
We analyzed the official complaint records of 28 insurers and found that Allianz and Clear Blue are the best small business insurance companies.
A good policy will cover your small business for a variety of problems, like workplace injuries, stolen business property, fire, severe weather and lawsuits. But with all of the options available, finding a policy might seem like a daunting task. We can help you identify the best small business insurance companies.
Summary: Best Small Business Insurance
The Best Small Business Insurance Companies
What Are the Different Types of Small Business Insurance?
When buying small business insurance, your coverage decisions depend on your business’s type, size and specific risks. Common types of small business insurance include general liability, commercial property, and workers’ compensation insurance.
How Much Small Business Insurance Coverage Do I Need?
We recommend looking at several factors to determine how much small business insurance you need, such as:
- Your business type. Your industry has certain risks that are associated with it and you’ll need to buy the appropriate coverage types for those risks. For example, if you are an accountant who gives tax advice, you’ll want to buy professional liability insurance.
- The size of your business. As your business grows, you may need to increase coverage such as your liability limits. If you want to add an extra layer of protection, we recommend buying a commercial umbrella insurance policy.
- Your business location. You may need certain types of small business insurance required by law, depending on your city or state.
- Contractual requirements. Your client may require coverage such as general liability insurance, professional liability insurance or a surety bond.
How Much Does Small Business Insurance Cost?
The average cost of small business insurance is $57 per month, according to Insureon. That’s for a business owner’s policy (BOP), which bundles general liability insurance, commercial property insurance and business interruption insurance. It’s generally cheaper to buy a BOP rather than buying each policy separately.
Your small business insurance costs depend on several factors:
- Industry. Industries with a higher risk will typically pay more than industries with a lower risk. For example, a construction company with multiple employees would cost more to insure than a graphics designer who works on their own.
- Size of payroll and annual revenue. The higher your operating costs and expenses, the more you can expect to pay for liability insurance.
- Number of employees. The greater the number of employees, the higher the risk of accidents.
- Location. If your business operates in a high-risk area with higher crime rates, you may pay more for business insurance.
- Building age and size. Older and larger buildings cost more to insure than newer and smaller buildings.
- Coverage amount and types. The higher your coverage limits and the types of business insurance policies you buy impact your costs. For example, if you have a business vehicle, you need to buy commercial auto insurance, which increase your overall business insurance costs.
- Claims history. If you have a history of filing claims for your small business, it could increase your premiums.
The best way to find cheap business insurance is to compare business insurance quotes from several different insurers. You can find business insurance quotes online or by speaking with an independent insurance agent.
Average Monthly Costs of Small Business Insurance
Business Insurance Made Simple
Compare Free Quotes From Top Insurers at Simply Business. Get a Policy in Under 10 Minutes.
Methodology
Ratings 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.
Business Insurance Made Simple
Compare Free Quotes From Top Insurers at Simply Business. Get a Policy in Under 10 Minutes.
Other Small Business Insurance Companies We Rated
Best Small Business Insurance Frequently Asked Questions
How do I know if I need small business insurance?
The vast majority of small businesses would suffer financially if they were sued or experienced a devastating loss, such as losing inventory in a fire. For those businesses, commercial insurance is a must.
Without small business insurance, you’d have to pay for the legal costs of lawsuits and find a way to pay for damage to your business property. General liability insurance and commercial property insurance are good places to start. Commercial auto is important if you have cars, trucks or vans that you use for business.
And workers’ compensation insurance is required in most states.
What does small business insurance not cover?
Certain types of accidents are generally excluded from small business insurance policies, including floods and earthquakes. You can typically buy separate policies to cover these types of problems, such as a commercial flood insurance policy.
Small business insurance also excludes coverage for fraudulent and intentional acts that you commit. For example, if you assault a customer, general liability insurance won’t cover your legal costs.
Do I need business insurance if I have an LLC?
It’s a good idea to get business insurance for your LLC. That’s because business insurance covers your business assets. For example, if someone slips in your store and gets injured, general liability insurance can pay for medical bills as well as legal costs if you get sued because of the accident.
While business insurance is essential for high-risk industries, such as manufacturing and construction, it’s also a good idea if you’re in a lower-risk industry, such as freelancing or bookkeeping. For example, if you get hit with a copyright infringement claim for one of your digital ads, your general liability insurance can cover your legal costs.
What type of insurance is best for a small business?
A good place to start is with a business owners policy (BOP). It bundles three essential coverage types: general liability insurance, commercial property insurance and business interruption insurance. Combined, these three policies cover problems like accidental injuries and property damage, reputational harm, damaged or stolen business property, and income replacement if you can’t open your business due to a problem covered by your policy.
But a BOP alone may not cover all your needs. You may need to buy other types of small business insurance to cover the risks that affect your company. For example, if you have a work vehicle, a BOP won’t pay for repairs if you get into a car accident. You’ll need to add commercial auto insurance. It’s a good idea to speak with your insurance agent to make sure your business insurance policy meets the specific demands of your industry.
Do remote businesses need insurance?
Yes, remote businesses need business insurance to cover risks such as lawsuits, accidents and stolen business property. For example, if you own business property like computers and office furniture, you’ll need commercial property insurance to cover problems like theft and fire.
Your remote business may need other types of small business insurance. For example, if you visit clients, you’ll need commercial auto insurance. Or if you store sensitive data, such as client’s contact information and credit card numbers, you’ll want to consider cyber liability insurance.
Do you need a business owners policy (BOP)?
You need a business owners policy (BOP) if you want coverage for problems like lawsuits, lost business income and damage and theft of your business property. Without a BOP, you’ll have to cover these problems out-of-pocket, which could be financially devastating to your small business.
You can add other coverage types to your BOP. For example, if you drive a vehicle for work purposes, add commercial auto insurance.
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