Sole Proprietorship Insurance: Coverage, Cost & Best Options

Sole Proprietorship Insurance
Photo Credit: ijeab @Freepik

One of the most important tips to being a successful sole proprietor in 2023 is getting your business insured to protect your business against lawsuits, auto accidents, and other risks. Sole proprietors should ensure they get insurance coverage like general liability insurance, commercial auto insurance, and a business owner’s policy because this can protect both your business and personal properties against lawsuits and other risks. Thankfully, you can access these insurance coverages online if you do not have the chance to visit any walk-in insurance company. This article covers some of the top picks for small business insurance coverage for sole proprietorships.

Sole Proprietorship Insurance

As earlier stated, as a sole proprietor, you must endeavor to at least provide general liability insurance for your business. This plan serves as a shield in case someone files a lawsuit accusing you of destroying their property, inflicting bodily harm, or even tarnishing their reputation.  As a business owner or sole proprietor, a lawsuit could threaten your assets outside of your finances.

You can gain access to business insurance online or over the phone, either right from an insurance company through an insurance marketplace or by using an insurance agent. Sole proprietors can get many quotes from various business insurance companies before making a decision.

After acquiring sole proprietorship company insurance, you must understand when to renew it and how to handle it. You must also learn how to file a claim, add endorsements, or get a receipt of liability insurance.

Review your business insurance coverage yearly. When your payments are due, evaluate your coverage, pricing, customer service, and new dangers. By doing so, you’ll always be sure you have the perfect insurance policy for your business.

Small Business Insurance For Sole Proprietors

For small business sole proprietors, listed below are some of our top picks of sole proprietor insurance for you in 2023. 

#1. Nationwide 

This company provides a lot of different insurance coverages for small businesses in any field without limitation to the type of business it is. 

Nationwide’s business owners policy is a mix of the normal general liability, commercial property, and business income policies, along with equipment breakdown.

 Buying a business owner’s policy is possibly the best means for businesses to receive commercial property insurance as an independent policy might not be available.

They also provide insurance plans like workers’ compensation, errors and omissions also known as E&O, commercial auto, directors and officers (D&O) liability, cyber liability, and lots more. Note that this company doesn’t offer medical malpractice insurance.

#2. Hiscox 

This is another example of the most popular sole proprietor insurance for small business owners that provides several insurance policies including business owner’s policies, general liability, professional liability, as well as cybersecurity.

Hiscox also collaborates with other insurance companies and third-party agents to deliver several alternatives such as short-term general liability, short-term professional liability, and medical and commercial umbrella to name just a few of them. 

This company doesn’t provide an independent commercial property policy, businesses can obtain property coverage under a business owner’s policy.

They provide coverage customized for home-based businesses. However, there are no plans for farm and ranch insurance.

#3. Chubb’s

Their business insurance coverage ranges from the typical packages like general liability and professional liability. They also provide specialized coverage like product recall insurance and global insurance. Chubb’s coverage increases eligibility to clients with a maximum income of $30 million. 

They also provide a commercial package policy for businesses looking for full coverage more than that of the business owner’s policy. 

They also offer a foreign package policy for small businesses that sometimes conduct business internationally or send workers abroad. Organizations can also receive independent commercial property coverage from Chubb.

If you wish to find the perfect plan for your business, then you must reach out to this company today and ensure you contact them directly. 

#4. Allstate

Allstate is another one of the best sole proprietor insistence companies for small businesses that provides fairly standard policies but they do not offer as many alternatives as some of the other insurance companies already covered in this article. 

They do not provide for workers’ compensation, medical malpractice, directors and officers liability, or farm and ranch insurance. 

Even though this company doesn’t provide its own workers’ comp policy, an agent might be able to assist you in receiving coverage through a different carrier.

Allstate’s business owners policy might be the only means for businesses to receive commercial property coverage. It joins general liability, commercial property, business interruption with extra expense, and equipment breakdown insurance plans. 

Additionally, this insurer also offers several endorsements that can broaden a business’s scope of coverage. This comprises a home-based business endorsement that can provide off-premises and credit card insurance.

#5. The Hartford

Small businesses can discover full insurance coverage selections with this company. Aside from the more typical insurance, like workers’ compensation and business owners policies, they offer various specialized insurance coverages, such as global insurance for companies that have international presence such as partaking in online sales and home-based business insurance.

Even though this company doesn’t provide farm and ranch insurance, they do offer various livestock and animal mortality coverages. In addition, they provide independent coverage for commercial property.

Also, their business income insurance has a zero-hour waiting period and will run until your business is ready to relaunch. Typical business income coverage usually involves a 48- to 72-hour waiting period before coverage starts and only lasts for 1 month. 

#6. State Farm 

The State Farm provides business insurance coverage designed for independent contractors, restaurants, professional services, and retailers, with computerized billing and autopay alternatives. Commercial insurance coverage includes business owner’s policy bundles, surety and fidelity contracts, and farm and ranch coverage.

State Farm’s extra liability insurance includes professional liability, errors and omissions liability, employment practices liability insurance also known as EPLI, not-for-profit liability insurance with EPLI, and condo and homeowners association directors, to mention quite a few of them.

Best Business Insurance for Sole Proprietor

#1. USLI

The United States Liability Insurance Company (USLI) provides the best general liability coverage. USLI has one of the lowest premiums for business owner liability coverage and has one of the highest rates for providing quotes to companies who request a policy through Insureon. 

They also sell a competitive business owner’s policy with low premiums and their quotes are pretty high rates. 

However, this company’s complaint record for general liability is more than double what’s expected for an organization of its size.

#2. CNA

This company provides workers’ compensation coverage for companies of all sizes, and yes, sole proprietors are not left out here. Its coverage includes access to office safety and risk management training and classes, as well as. 

Although this company’s workers’  policies are above average, the company may not be a perfect choice for business owners looking to expand their businesses.

 CNA’s general liability coverages had high average quoted premiums, and its NAIC complaint score was nearly double the expected rate for a company of its size.

#3. Travelers

This company is very old and has been operating for more than 165 years as an insurance company. It’s not surprising that they sell excellent business owner’s policy and their insurance plans also policies that include liability, property, and business interruption coverage. 

They charge a low premium for this product and have a 100% quote-provided rate through Insureon. 

Furthermore, this company also has a low NAIC complaint score for sole proprietor business insurance. The company has an A++ (Superior) AM Best rating. It’s one of the largest and most reliable insurance companies in the field. 

#4. Hiscox 

Hiscox has the lowest quote average premiums for sole proprietor liability insurance. They also quoted low average premiums for business owner’s policy coverages. Besides, this company was one of just a few insurers that provided online quotes. 

Once you have received your coverage, you can download and review your papers electronically.

This company also had the highest NAIC complaint record of all for general liabilities, garnering a record that was over six times what was expected from the company given its size.

#5. Chubb 

This company has earned fewer complaints about general liability insurance relative to its market share as compared to other business insurance companies examined in this article. 

For this reason, Chubb is one of the best sole proprietor insurance comely for small businesses in terms of its general liability insurance. 

Additionally, you can purchase business insurance online from Chubb if your business earns $1 million or less in annual proceeds. 

They also provide BOPs, errors, and omissions insurance, and cybersecurity insurance online. 

#6. Thimble

Now this company is best for temporary coverage. This implies that if you are required to have business coverage on short notice, Thimble is your guy. 

For sole proprietors who just got a contract for an event or job and it requires you to have a business policy, Thimble provides insurance coverage a month at a time or for one specific job. 

Surprisingly, this is a good way to save money, since you don’t have to pay a premium regularly as a business owner. Thimble provides general liability, professional liability, and commercial property insurance, but not commercial auto insurance. 

What is liability protection for sole proprietorship? 

Liability protection is also known as errors and omissions insurance, popularly referred to as professional liability insurance for a sole proprietorship. It is usually insurance that is used for protection against mistakes or errors in the professional services you provide your clients.

What type of insurance should a sole proprietor have? 

So as a sole proprietor, you should get professional liability insurance. Professional liability insurance, or errors and omissions insurance, enables business owner to safeguard their business in case they get sued for mistakes in the professional services they’ve offered.

What is the difference between a self-employed individual and a sole proprietor? 

There’s no difference between both of them. A Self-employed is a person who runs a business of their own and does not work for anyone, while a sole proprietor is a business owner who is self, -employed.

What is the most common type of business insurance? 

Some of the most common types of business insurance include :

  • General liability insurance
  • Liability insurance
  • Professional liability insurance
  • Product liability 

Is business insurance tax deductible?

Yes, business insurance is tax deductible.

How much does a $1 million dollar business insurance policy cost? 

A million-dollar general liability insurance policy will cost about $40 Per month up to $150 Per Month for several small businesses.

Business Insurance for Sole Proprietor Cost

Sole proprietor business insurance costs an average of $1,384 per year, based on a survey carried out by leading business insurance marketplace Insureon. Nevertheless, how much you are required to pay for your business insurance depends on several factors. 

Furthermore, there is no fixed price for the business insurance cost because it differs. One factor that determines how much you’d pay is the type of industry you’re in, your annual business earnings, and how much coverage you need.

You can decide to pay at once (one lump sum), or in quarterly, or monthly, installments. Whichever suits your budget perfectly.


In Summary,

We have provided you with some of the most popular Sole Proprietorship Insurance for business owners. Ensure you reach out to them today and get your business the coverage it deserves.

Sole Proprietorship Insurance FAQs

How much liability does a sole proprietor have? 

Sole proprietors have unlimited liability and are lawfully accountable for all debts against the business.

When should I get business insurance? 

The best time to get business insurance is immediately after you start your small business.


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