If you are a small business owner, then you definitely have plenty of options and providers when it comes to business insurance. Buying insurance might seem like just another task on your to-do list, but having the right coverage from a good company will pay off if you ever have a claim.
Small business insurance offers essential financial protection from a variety of risks, providing business owners with peace of mind. A business owner’s policy (BOP) is a package of business insurance coverages that includes commercial property insurance and commercial liability insurance.
There are many types of commercial insurance options for small businesses, such as business interruption insurance, which provides income replacement after a covered loss, may be included as well. Business owners also need commercial auto insurance, professional liability insurance, and worker’s compensation insurance.
All of these can be purchased separately or added to customize your BOP.
Best Insurance Providers for Small Businesses
The best small business insurance providers offer multiple policies with tailored coverage and robust customer service. These include 24/7 claims availability and instant access to a certificate of insurance (COI).
Managing your policy and getting answers to your questions should be easy with a great insurance company. You should also consider financial stability, policies offered, customer satisfaction, and convenience.
Here is our pick:
The Hartford
Thanks to its financial strength, customer satisfaction, and available policies, The Hartford is a top choice for the best insurance for small businesses. It stands out because it has the convenience of an insurtech company by providing quick, customizable quotes online and the ability to generate an instant COI while also having the wide range of coverage that any type of business would need.
It insures nearly every small business profession—whether you have a barber shop, construction company, auto repair shop, or lawn care business.
Unfortunately, The Hartford does not have a mobile app where business policyholders can manage their policy and claims. Additionally, sometimes, you cannot get a quote online—or if you do get a quote, you may have to call to purchase the policy. Also, same-day coverage is rarely available.
Pros
- In-house claims services
- Customer complaints below the national average
- Over 1 million small businesses insured
Cons
- May need to finish the quoting process with an agent
- Same-day coverage is not always available
- No mobile application for commercial policies
Chubb
Chubb is one of the best small business insurance providers for customer satisfaction because it consistently ranks above the industry average in J.D. Power’s Small Commercial Insurance Study. It also has an unusually low number of complaints with state regulators for a company of its size.
Chubb has been in the business insurance industry for almost 140 years. The company offers a plethora of commercial insurance products and services for businesses of all sizes and across multiple industries. Though it is a major national insurer, the carrier still caters to small business owners and features a separate hub on its website just for small business insurance products.
Small business owners can purchase business owners policies, workers’ compensation insurance, liability coverage, cyber insurance, and umbrella insurance. In addition, if the business has a projected annual revenue of $2 million or less, owners can get an online quote through Chubb’s website without going through an agent.
However, business owners with other insurance needs must get in touch with a local agent to get a quote. This is because Chubb doesn’t offer online quotes for insurance products not listed in its small business hub.
Pros
- Offers a suite of business insurance products for small, mid-size and large enterprises
- Outstanding customer satisfaction ratings
- Few NAIC complaints for a company of its size
Cons
- Online quotes aren’t available for every type of policy
- Businesses with more than $2 million in revenue must work with a local agent
Next Insurance
Next Insurance has a fast quoting system that makes it easy to get instant coverage entirely online without speaking to anyone. Through its app and new COI Analyzer, it can generate a nearly instant and free COI that you can share. Because of its lightning-fast convenience and range of policies offered, it is a great provider of fast coverage.
Its target businesses are ones with fewer than 10 employees and revenue of up to $5 million. It can also offer general and professional liability, inland marine, commercial property, employment practices liability insurance (EPLI), and workers’ compensation.
Pros
- Same-day coverage
- Quick, online quote
- Instant access to policy
Cons
- No 24/7 call center
- Not all construction activities are covered
- Doesn’t directly sell commercial auto insurance
Progressive
Progressive is the best small business insurance provider for commercial auto policies because it covers almost every type of commercial vehicle. Additionally, policyholders benefit from an unlimited travel radius (in most states) and may adjust coverage as needed at any time, free of charge.
This company stands out for its commercial vehicle insurance, which is available for commercial trucks, business cars, emergency vehicles, military vehicles, and a variety of SUVs, vans, trucks, buses, tractors and trailers. This policy generally covers liability, physical damages, medical payments, uninsured motorists, hired auto and non-owned coverage.
Progressive also offers business owner’s policies (BOP), general liability coverage, professional liability coverage, workers’ compensation, health insurance, and cyber insurance.
Pros
- Second-largest business auto insurer in the U.S.
- Discount for bundling multiple business insurance policies
- Policies cover a wide variety of risks and vehicle types
Cons
- No online support via live chat
- Discounts are not available in all states
State Farm
State Farm has consistently ranked within the top three insurers for customer satisfaction over the last three years. It even has a higher NAIC complaint index than Chubb, and was awarded 856 out of 1,000 points for customer satisfaction in J.D. Power’s Small Commercial Insurance Study.
State Farm offers business insurance designed for independent contractors, restaurants, professional services, and retailers, with paperless billing and autopay options. Commercial insurance products include BOP bundles, surety and fidelity bonds, and farm and ranch insurance.
Coverage options include:
- Commercial Auto
- Inland Marine Insurance
- Workers’ Comp
- Group Life Insurance
- Retirement Plans
The company’s extra liability coverage includes professional liability, errors and omissions liability, employment practices liability insurance (EPLI), not-for-profit liability insurance with EPLI, and condo and homeowners association directors and officers liability with EPLI.
Pros
- Insures more than 300 professions
- Highly customizable insurance policies
- Live chat support
Cons
- Not all insurance agents can cross state lines
- Claims are filed over the phone, not online
Nationwide Insurance
Nationwide Insurance boasts exceptional customer satisfaction with zero complaints filed with state departments of DOI. It has developed an extensive suite of policies for the service industry, including a package of management liability policies, which are available as primary or excess through Nationwide’s specialty line.
These include specific coverages for businesses in the service industry, like printing error coverage for advertising firms, a risk-management hotline for law firms, and professional liability customized for funeral home directors. Depending upon the line of business and coverage you are seeking, you may even be able to get a fast quote online.
However, there is still the possibility that it will direct you to schedule a meeting with an agent. Also, you will need to speak with an agent to purchase a policy. There is no clear information regarding account maintenance or how to get a COI for your business.
Pros
- Strong financial rating
- Available 24/7
- Convenient quoting process
Cons
- Need to speak to an agent to finalize and bind a policy
- Unclear process for obtaining a COI
- Limited information on online account services
Allstate
Allstate’s business insurance offerings are fairly standard, but it doesn’t offer as many options as some of the other insurers. These include workers’ compensation, medical malpractice, directors and officers (D&O) liability, and farm and ranch insurance.
While Allstate doesn’t provide its own workers’ comp policy, an agent may be able to help you obtain coverage through a different carrier.
The insurer’s business owner’s policy (BOP) may be the only way for companies to get commercial property coverage. It combines general liability, commercial property, business interruption with extra expense, and equipment breakdown coverage. Allstate also offers various endorsements that can extend a business’s scope of coverage.
This includes a home-based business endorsement that can provide off-premises and credit card coverages.
Pros
- Includes equipment breakdown coverage as part of its standard business owners policy
- Offers a home-based business endorsement
Cons
- Doesn’t offer as many coverages as other insurers, including workers’ compensation
- Doesn’t offer online claims filing for business insurance policies
Travelers
Travelers is one of the best small business insurance providers for workers’ compensation because of its excellent billing solutions. It also has a reputation as the leading underwriter of these types of policies.
Travelers sells workers’ compensation coverage that adapts to your business needs. It also offers a flexible billing option through TravPay, a pay-as-you-go service that syncs your workers’ compensation premium payments with your payroll processing. The company’s risk control consultants — the people in charge of inspecting and assessing your insurance needs — can do in-person or virtual visits.
In addition to workers’ compensation coverage, small business owners have access to the following insurance products:
- Professional liability
- Commercial umbrella
- Employment practices liability
- Management and professional liability
- Data breach
- Commercial auto
- Business income and extra expense
- Commercial general liability
- Commercial property
As of 2022, Travelers also holds the largest market share for workers’ compensation policies, as well as the top two positions for commercial auto insurance. These statistics are a strong indicator of its popularity as a commercial insurer.
Pros
- Largest workers’ compensation insurer in the U.S.
- A++ rating from A.M. Best for superior financial stability
- Broad network of local insurance agents across the country
- Commercial auto and trucking, cyber coverage and ocean marine policies
Cons
- You can only get quotes and file claims by phone
- Coverage availability varies by state
What does small business insurance cover?
General liability insurance pays for legal costs such as hiring an attorney and any judgments against you and your business. It also includes coverage for damage to reputation such as slander or libel and copyright infringement.
Liability insurance pays others, not your own business. It’s also known as business liability insurance.
Workers compensation insurance offers several benefits to employees who are sick or injured because of their jobs. This includes medical care, physical therapy and compensation for lost wages. Death benefits for an employee’s family are available if an employee passes away from a work-related illness or injury.
Commercial property insurance covers a number of business items including computers and workstations, desks and chairs, business records, business inventory and supplies. It can also cover a business office and building.
Commercial property insurance is also called business property insurance.
What does small business insurance not cover?
There are instances where small business insurance doesn’t offer coverage, such as:
- Fraudulent and intentional acts
- Flood damage to your business. You would need to have a separate commercial flood policy for flood coverage
- Wrongful termination, unless you have an employment practices liability policy
Importance of insurance for small business
Here are 5 reasons that you want to have insurance for your business, your employees, and yourself.
Protect your employees
Protecting your employees with liability insurance is a smart move. As a small business owner, your employees need to be one of the most important priorities. Not only will it make them feel more secure at your business, but it could help protect them from losing employment if a lawsuit comes up.
You also want to consider how beneficial insurance can be to you to attract new employees. Having insurance is a job perk, especially if you are offering health or dental insurance. This will help you expand your team and may encourage your employees to work harder.
Workers’ compensation claim
Workplace accidents can happen any day at any time. Without insurance, your small business – and, of course, you – are going to be paying for that employee’s Workers’ Compensation out of pocket. This can reach into the tens of thousands of dollars quickly, which can lead to financial ruin for you.
Hence, it is important to get insurance. If an employee gets a serious injury that doesn’t allow them to work any longer, the Workers’ Compensation will cover the medical bills and pay benefits for that employee.
May be required
If you are renting the space your business operates from, a landlord’s insurance policy might not cover you. In this situation, it is beneficial to have insurance in case something were to happen.
Another situation to consider is if you are borrowing money to finance because the loan agreement you sign likely asks for proof of a specific type of insurance. Also, certain individual contracts that you have with clients may require insurance in case something goes wrong.
Natural disaster, theft, or vandalism
If your business is not insured and a natural disaster occurs, it might be physically destroyed with no financial backup for repairs or replacements. Regardless of what kind of natural disaster it might be, property insurance is what you need.
This is a very important type of insurance for any business to have. However, it is especially small businesses that don’t have the capital to completely replace things if they get suddenly destroyed.
Another benefit of having property insurance is that it covers vandalism, fire, or theft as well.
Avoid legal outcomes
Without liability insurance, you could go out of business quickly if you are sued or have a lawsuit on your hands. This is true even if you win the case because legal fees can be extremely expensive.
Whether you are sued by an ex-employee or because of a contract gone wrong, being sued can cost you a lot of money and it’s all going to come straight from your business. Having an active lawsuit without liability insurance can mean the end of your small business.
Recommended Articles
- Business Insurance: Definition, Types & What Does It Cover?
- How Much Does Business Insurance Cost?
- Small Business Insurance: What Is It & How Does It Work?
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