Many dreams of owning a business, and small businesses offer many perks, privileges, and benefits. Of course, owning your own business isn’t without risk. Whether it’s to protect your income, safeguard your property, or prepare for any accidents related to your business operation, small business insurance is a sound idea for any small business owner.
There are a variety of business insurances on the market and trying to decide which one is best for you can eat up some of your valuable time. The following guide will pinpoint the 5 best insurance for small businesses to help make it easier to find the small business insurance that’s right for you.
What is small business insurance?
Small business insurance, or commercial insurance, seeks to provide compensation for accidents that happen during business operations or on business-related property. There are 3 core areas of compensation for small business insurance:
- . general liability insurance that relates to property damage committed by your business, bodily injury suffered on your property, and personal damages due to defamation.
- . Business income insurance if property damage-related claims exceed income
- . Commercial property insurance to compensate for property-related damage due to fires, floods, or other non-business-related activity
In short, small business insurance is a measure to compensate for any unforeseen suits or claims that can occur in relation to one’s professional property. Small business insurance does not cover the following claims:
- . Data breaches of professional computing networks
- Professional liabilities resulting from errors or omissions in service provided
- Worker’s compensation for work-related injuries
- Commercial auto insurance for professional vehicles
- Employee-related claims
- Insurance for home-based entrepreneurs not covered by homeowner’s insurance
For the above claims, additional insurance would need to be purchased outside of whatever small business insurance covers. In summary, for those who are operating a small business, particularly if one owns a commercial property or if one is performing work in someone’s home, insurance is a helpful tool to provide sufficient compensation in the event of an error.
What do you need from quality small business insurance?
The main trade-off to consider relative to finding the best small business insurance is what the policy covers vs. how much it costs.
Cost appraisals will vary with each business based on assets (specific property), the function of the business, and where the business is located, but when you’re shopping around for small business insurance, you should find a policy that’s tailored to your business. Questions you should consider are:
- . Am I paying for coverage that I don’t need, and am I being covered for what I’m paying? You don’t need flood insurance if you live in a drought-prone area, but you should definitely have wind insurance if tornadoes or hurricanes pass through.
- How much of my assets are being covered? If you have considerable investments in commercial property related to your business, you want to make sure that all properties are covered by your policy.
- Is it possible to bundle additional insurance on the same policy? Many insurers allow you to bundle additional insurance for a discount, and many states require additional insurance, such as worker’s compensation, when operating a business. It’s always wise when shopping for the best insurance policy to find one that allows you to maximize your insurance coverage without additional expense.
The best small insurance companies
- 1. Hartford offers a variety of business owners policies for varying business entities, though predominantly focuses on mid-size companies (which might limit freelance, single proprietorship, or small businesses with fewer than 50 employees).
- Hartford has a considerable reputation for the quality of service with a fast and easy-to-use application that can be completed in as few as 10 minutes.
- Hartford offers nearly nationwide coverage in the United States except in Alaska, Hawaii, and New Jersey. For all-around coverage for mid-size businesses and larger ones, The Hartford offers an excellent opportunity to keep your business protected.
- 2. Hiscox is another reputable insurance agency that offers even more options relative to small business insurance. Hiscox offers a variety of policies tailored to one’s state of residence and business orientation, with policies available for freelance and sole-proprietorship entrepreneurs. Policyholders can choose from general liability or professional liability when creating their policies, and Hiscox offers some of the least expensive business insurance policies, with rates as low as 22$/month (as low as $250/ year compared to The Hartford which can be as low as $400/year). For tailored and affordable policies, Hiscox offers a great option.
- 3. State Farm is an established industry leader within the insurance sector, and for good reason. Although they most often work with larger business entities, State Farm offers many benefits unique to its business structure. Insurance agents own their own branches, which makes them more relatable with regard to finding policies that suit each business’ unique needs. State Farm offers substantial coverage in up to $1 million increments as well as bundling options for additional insurance coverage. Based on consistency and quality of service, State Farm is a great asset for any small business owner.
- 4. For those who are more focused on commercial automotive coverage, particularly if you operate a vehicle-based business (such as a parcel delivery service or food truck), Progressive is considered the go-to for commercial automotive coverage. Progressive’s commercial automotive coverage is intentionally comprehensive, with the option to purchase coverage for physical damages, medical payments, and uninsured motorists, among other vehicle-related claims; just about any vehicle, from trailers to military vehicles, is eligible for coverage. Progressive also offers the option to bundle with other insurance packages, though you may not be able to include all business-related insurance policies under the same policy. For vehicle-tailored coverage that incorporates other insurance, Progressive offers a great option for small business owners.
- 5. For those who have international aspirations for their small business, Chubb offers excellent coverage oriented towards international small businesses. In addition to the general liability coverage offered through most small business policies, Chubb offers additional policies such as medical liability, environmental, and product recall. For a small business with an international scope, Chubbs can be the best small business insurer for you.
The rule of thumb when shopping for insurance is to have a clear idea of what type of coverage you need and how reliable the coverage will be. Shop around in your area and speak with agents to get a clear idea of quotes and coverage, as rates may vary from region to region.
Finding the best rate and a reliable agent will help you to find the best small business insurance to keep your business safe, secure, and successful.