Published on September 1, 2025
4 min read
Business Insurance 101: What Coverage Does Your Company Need
Running a business comes with risks, from property damage to liability claims.
Business insurance protects your company from financial losses due to unforeseen events like lawsuits, natural disasters, or employee injuries.
Choosing the right insurance coverage ensures your business stays operational, even during tough times.
Understanding the different types of business insurance can help you make informed decisions about the coverage you need.
This guide covers essential business insurance types, their benefits, and how to choose the right policy for your company.
Types of Business Insurance
General Liability Insurance
- Covers bodily injury and property damage claims from third parties.
- Protects against legal costs if your business is sued.
- Essential for all businesses, especially those with physical locations.
Commercial Property Insurance
- Protects your business property, including buildings, equipment, and inventory.
- Covers damage from fire, theft, and natural disasters.
- Ideal for businesses with physical assets and storefronts.
Business Interruption Insurance
- Covers lost income if your business is forced to close due to disasters.
- Helps with ongoing expenses like rent, payroll, and loans.
- Often bundled with commercial property insurance.
Workers’ Compensation Insurance
- Provides medical benefits and wage replacement for injured employees.
- Required by law in most states for businesses with employees.
- Protects businesses from employee injury lawsuits.
Professional Liability Insurance (Errors & Omissions)
- Protects against claims of negligence, mistakes, or inadequate services.
- Essential for professionals like doctors, lawyers, and consultants.
- Covers legal fees and settlements.
Cyber Liability Insurance
- Protects against data breaches, hacking, and cyber threats.
- Covers costs for customer notifications, credit monitoring, and legal expenses.
- Important for businesses handling sensitive customer data.
Product Liability Insurance
- Covers claims of injury or damage caused by your products.
- Essential for manufacturers, retailers, and eCommerce businesses.
- Protects against costly lawsuits and product recalls.
Commercial Auto Insurance
- Covers business vehicles against accidents, theft, and damage.
- Provides liability coverage for injuries or property damage.
- Required if your business owns or operates vehicles.
How to Choose the Right Business Insurance
Assessing Your Business Risks
- Identify potential risks based on your industry and operations.
- Consider common liabilities like property damage, lawsuits, and cyber threats.
Understanding Legal Requirements
- Check state and industry regulations for required insurance policies.
- Ensure compliance to avoid penalties and legal issues.
Comparing Insurance Providers
- Request quotes from multiple insurance companies.
- Look for reputable insurers with strong financial ratings and customer reviews.
- Understand policy limits, exclusions, and deductibles before purchasing.