Find The Right Insurance For Your Business

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Small Business Insurance Partners

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If you are a business owner, your business is like your baby.

You have to take care it, invest in it, grow, and most importantly protect it.

That's where having small business insurance comes into play.

It not only protects you from any legal issues, but also protects all of your assets and property that you own within the business.

Let's get started on learning why every business owner should have a business insurance policy.

What is Small Business Insurance?

There are many costs that are imposed on a small business.

Small business insurance is what protects you from the unnecessary expenses.

Lawsuits, accidents, liability and more. 

This is not a blanket insurance because there are as many varieties on the market to suit your unique needs. 

In many cases you’ll have to take out business insurance by law. 

In this case there are specifications as to what type of insurance you need and how much for specific coverage

Why Do You Need Small Business Insurance?

The answer to that is peppered within this guide but the short answer is simple. You need it because the issues described here can make or break your business.

A liability can happen at any time, for any reason and come at you from any angle. It could be from natural disaster or fire and earthquake or structural failure. That’s just one angle.

Then there’s product liability and employees and contractors. These are elements that are out of your control and best to be prepared for. 

What does business insurance coverage?

In short, your small business insurance in its most basic form will cover Professional Liability and Replacement Cost.

Professional Liability is explained below in my recommended essentials list.

Replacement cost is one that can still short-change you so a supplement is needed. 

Why? Because it will only provide the value of the item lost or damaged.

This is an issue if you have older equipment. A gap insurance rider for full replacement cost is recommended. 

In some cases, and usually limited, they may cover loss of wages if your business has to close due to very specific reasons. 

What it doesn't cover?

It’s just as important to know what your business insurance won’t cover.

You have enough to make that list and start shopping for the essentials.

Here, you’ll know what types of extra insurance you’ll need to stay safe. 

This is simple.

Anything outside of professional liability and limited replacement cost. 

Everything else is a rider, supplement, extension whatever the insurer decides to label it.

And of course any natural disaster, flood or fire.

It will get you started but supplementation should be immediate as possible. 

What Kind of Business Insurance Do I Need?

Type of Insurance

Initial Stage

Growth Stage

Mature Company

General Liability + Business Property Insurance

Auto liability (hired and unowned)

Workers' Compensation

Errors and Omissions Insurance (professional services)

Cyber Liability


Employment Practices Liability


Directors' and Officers' Liability




Fiduciary Liability

Life Insurance Riders

Types of Business Insurance

Types of Business Insurance

Commercial Auto

{ Explained in my recommended list below}


  • It’s straightforward and easy to understand.

  • No hidden fees, risks or exclusions to worry about.

  • Most affordable life insurance.

  • You can cancel anytime without losing value.


  • Your coverage ends immediately.

  • Renewing it might come with extra costs.

Commercial Umbrella

This will extend your coverage incase a claim exceeds your policy limits.


  • It doesn’t expire. 

  • It works like a forced savings element.

  • Works great as an estate-planning or customized personal finance strategy. 

  • Access your cash value if you need it.


  • It’s expensive.

  • A low-interest rate on the cash value.

  • It’s more complicated than term life insurance.

Commercial Flood

This is also recommended because no basic policy will cover this. 


  • It offers more flexible options for you to customize your coverage.

  • Ability to choose where your cash build-up goes.

  • Permanent coverage.

  • Access your cash value if you need it.

  • Tax-deferred cash value growth.


  • It’s expensive.

  • If you borrow against your universal life policy, you’d be charged interest and get a lower death benefit.

  • Extremely low-interest rates.

  • You’ll need to monitor your cash value closely.

  • You must pass a medical exam to qualify.

BOP Insurance

This is what insurers call the packaged insurance that will cover all that you need.

It’s customized so you don’t have to worry about choosing a la carte insurance yourself. 


  • It offers more flexible options for you to customize your coverage.

  • Ability to choose where your cash build-up goes.

  • Permanent coverage.

  • Access your cash value if you need it.

  • Tax-deferred cash value growth.


  • It’s expensive.

  • If you borrow against your universal life policy, you’d be charged interest and get a lower death benefit.

  • Extremely low-interest rates.

  • You’ll need to monitor your cash value closely.

  • You must pass a medical exam to qualify.

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Average Cost of an annual BOP insurance

Image Credit Pogo Insurance

The information I provide in this section will cover the basic must-haves that all businesses should have and why.

This way, you can begin, right now, create a list of what you need so you can start shopping.  

According to Forbes, these are the types of insurance every business needs before they’re well-established. Here’s why. 

Once you begin dealing with people there’s always room for lawsuits.

Even if you work online. At home business is covered briefly in this list too. 

  • Professional Liability Insurance:{Included in Basic Plan} Every business needs this because they’re all at risk for liability and that can take many forms. If a customer files a claim for negligence on your part , you’re covered up to the amount you choose. That’s determined according to the type of business you have. Professional liability insurance will cover every business from those that deliver goods and perform services to others. If the customer was harmed physically, emotionally or mentally by a product or service this is the most important insurance to have. 
  • Property Insurance:  { Included in Basic Plan} This protects your property and  No, you don’t have to own your property. Leasing counts. Apart from fire, flood or storm damage, most other issues are covered. If you think damage is uncommon in business aside from the catastrophic; think again.
  • Water Damage: Without property insurance, you’re one pipe burst away from needing a very expensive cleanup and repair.
  • Professional Mistakes: From the computer tech that accidentally destroys a client’s computer to using the wrong chemical on a customer’s property it’s covered.
  • Property Damage: From damage to a person’s clothing on say a nail or something or tripping and dropping a cell phone etc. There are too many small, common accidents to mention.
  • Impact Damage: This can also happen in any business. You may only be meeting with a client in their home or your business and damage their personal belongings like spilling liquid into their computer or staining clothing. You could smash expensive home decor with a ladder or toolbox. Again, there’s a plethora of possibilities.
  • Fire: Only certain industries such as electricians need fire insurance. If you do anything that could start a fire then you must have this. Most states will require it for certain industries anyway.
  • Workers’ Compensation Insurance: Did you know that a worker can claim carpal tunnel syndrome? Worker’s compensation covers most common injuries and even accidental death. The article in Forbes and others state that you should have that insurance when you hire employees. I would suggest going a step farther and get it with the other essential insurances for two reasons. One, you know you’re covered the first day the employee sets foot on the premises and you won’t forget. Two: you may be eligible for a discount for an insurance bundle.
  • Home Based Businesses: This one can be tricky. Most people don’t realize that the homeowners insurance won’t cover your business in most cases. See my Ultimate Guide to Home Insurance on this site for more on that.
  • Product Liability Insurance: If you sell a product and it causes injury or death, even if it’s an unforeseen fluke like a defect in the production, you can be sued. Lawyers serve a good purpose in this world to many, but they’ll jump on a product damage suite immediately. So much so that if you tune into the commercials produced in the past 2 decades you’ll see specialty law firms that deal in injury or death by a product.
  • Company Vehicle: If you use any vehicle, bikes, motorcycles, skooters, cars, vans or trucks you need coverage. Third party insurance is a must in case of collision with someone on the road both for the sake of the employee and the other person. Equipment and tools:  Should be added to this so that if your tools are stored on premises or in the vehicle you’re covered. Stock Items is also another add on in case your business has a stock of inventory somewhere that is unstaffed after hours or even in a warehouse you’re renting.
  • Business Interruption: This is not mandated but it’s a must-have. We know by now that the crisis can strike unexpectedly. From the 2008 crash, 9/11 to COVID 19 and more, we understand all too well that our businesses can be interrupted and revenue halted for many reasons. Now, more than ever this insurance is needed.

Pros & Cons


  • The most obvious pro is that you have the peace of mind that when and if a disaster strikes you’ll be prepared.
  • Another pro is that you have a lot of wiggle room when customizing your policy.
  • One of the most overlooked perks is that it’s attractive to investors. It looks responsible when you can show insurance on your assets. Investors will also often require it before engaging with your business.


  • Many business owners will raise the deductible to lower the monthly cost. However, you need to have the cash stashed aside to pay that deductible and many find that to be a challenge.
  • Another con is the slow response rate to claims by many insurance companies. Some insurance companies may come with an annual financial loss cap and others will have a list of things they won’t cover… period. This can be discouraging.

So, should you invest at all? I still contend that good shopping and speaking with a live agent at length will still yield you the protection you need. It will still be less of a financial burden than having to shut down because you didn’t have your back covered.

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Does my LLC Need Small Business Insurance?

Does my Small Business Need any Specific Type of Insurance?

Do I need small business insurance if I work from home?

What’s the difference between general liability and professional liability?

What Is Business Liability Insurance?

Why Do I Need Business Liability Insurance?

Is Business Insurance Required by Law?

Is My Business Insurance Tax Deductible?

Who Needs Small Business Insurance?

Anyone and everyone that runs any type of business.

Whether you have a home office, a leased or owned building or a virtual office space you need business insurance. 

As I stated throughout this article, you have liability that can hit you from any angle; people, equipment and disaster. Be prepared.

It will cost more to endure the event than to pay the monthly cost. 

How Much Does Small Business Insurance Cost?

This is a tricky one that is complicated. I can’t give a blanket range of the cost, that wouldn’t be responsible and could mislead you.

There are factors that make the insurance rates unique. You and your agent will figure this out for your situation.

  • Business Location
  • Sales Reports
  • All business assets and their value
  • Your unique business risks
  • Your daily business operations
  • How many employees
  • Everyone’s salaries
  • Goods and Services
  • Business Classification such as S corp, LLC, Sole Proprietor etc.
Business Insurance Cost

Image Credit Pogo Insurance

This is a common sense motivation for the insurer. They judge the operations and risks in the environment.

This tells them a lot about you, your operation and the people in it.

  1. Are you a responsible business owner?
  2. Do you pay your bills?
  3. Even your credit habits may be scrutinized. Then there’s the location, is it a secure area?
  4. How are you securing your property?
  5. What inherent risk does your company present?
  6. What type of clients do you have?
  7. Understand the flow of logic? 

All of these metrics must be weighed in before you get a real price.

Packaging up the deal plus any applicable discounts will help a lot and shift that number more to your advantage. 

How to Apply for Small Business Insurance?


Review this Guide: Take the information in this guide and assess as best you can what type of risk you business may present. Look at the types  of insurance I’ve showcased including my recommended list. 


Find a Few Commercial Insurance Agent: They specialize in business insurance. They can provide the best customization and save you money. It’s always good to have a specialist and not a jack of all insurances in my opinion.


Compare what they Offer: Each insurer will offer different elements to the same insurance. Compare and choose who saves you the most but remember not to choose by price alone. Make certain your insurance will cover what it’s supposed to. Otherwise, you are wasting your hard earned money and could end up paying double in the end. 


Annual Assessment: Before you renew a policy automatically, make sure your needs are the same. Reassess the policy against the growth of your company. 

Is Small Business Insurance Worth it?

I can’t reiterate this enough. It’s worth it because any event can make or break your business.

It can quickly turn into the end of what you’ve poured your heart into. 

If you think you can’t afford the monthly premium then raise the deductible.

You can organize yourself ahead of time and stash the cash you’ll need to pay it when something happens

life insurance for family

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