When starting a small business, it can be difficult to know what insurance coverage is necessary to protect your company from the costs associated with legal liability, theft, property damage, and other unforeseen disasters. Depending on the industry, size, and location of a business, different types of insurance coverage may be necessary to ensure financial protection. This guide will cover everything small business owners must understand to choose the right types of insurance for their specific needs.
Understanding Small Business Insurance
Before choosing one or more insurance providers, it is important to understand what small business insurance is and how it works. This section will provide an overview of the main types of small business coverage.
What Is Small Business Insurance?
Small business insurance refers to a variety of insurance coverages that small businesses can purchase to protect against legal liability, vandalism, theft, fire, and other risks that pertain to their business and industry.
Small business insurance is an umbrella term that refers to the different types of coverage that a small business might require in order to protect themselves, their employees, their equipment, and their customers. While there is no one-size-fits-all policy, there are a few common types of insurance that apply to businesses in most industries. These include general liability insurance and commercial property insurance (sometimes bundled as a business owners policy), as well as workers’ compensation and commercial auto insurance. However, there are many other types of insurance that small businesses should consider depending on the industry. For example, coverage necessary for a restaurant will differ from coverage for a law office or accounting firm. Other factors that determine the necessary types of insurance include the number of employees the business has, how long the business has been in operation, the type of equipment it uses, revenue, and location.
Types of Small Business Insurance
Small business insurance is rarely sold as a single policy, but rather as multiple policies that provide coverage for different types of liability and risk that a business faces. Here are the different types of insurance that a small business might carry:
General Liability Insurance
General liability insurance offers financial protection for losses that result from property damage, physical injury, medical expenses, lawsuits, libel, slander, and advertising injury when they are incurred due to normal business operations. General liability insurance only pays for third-party damages, not for damages to you or your business. For example, if a customer gets injured in a slip-and-fall at your company’s facility and sues for damages, your general liability insurance would cover their medical expenses and the legal costs. But if your employee gets injured in a slip-and-fall and sues for damages, those injuries would need to be covered under a different insurance policy—workers’ compensation.
With some insurance companies, general liability insurance is packaged with commercial property insurance and sold as one coverage under a business owners policy (BOP). Some of the small businesses that should sign up for a general liability policy include landscaping companies, IT contractors, real estate agents, consulting firms, marketing agencies, and janitorial services. This is not an exhaustive list, and businesses across all industries would benefit from general liability insurance. In addition, many large companies will require any contractors they work with, especially in the construction industry, to provide proof of general liability insurance.
The cost of general liability insurance varies depending on factors such as the industry and size of the company. However, the national average cost for general liability insurance through Progressive is just $53 per month.
Professional Liability Insurance
Professional liability insurance, also known as errors and omissions (E&O) insurance, is designed for businesses that provide professional services or advice, such as law, accounting, or healthcare. For example, clients might sue an accounting business if they believe that the accountant misrepresented information, neglected to inform the clients of all options available, or offered inaccurate advice that led to monetary damages. Professional liability insurance will cover the costs for any damages due to these types of lawsuits, as well as legal defense costs—even if the business wasn’t found liable.
Professional liability insurance is a separate coverage from general liability. Therefore, it does not cover bodily injury, property damage, or advertising injury costs. It also won’t cover fraudulent acts, data breaches, damages due to discrimination, or punitive damages. Some of the types of industries that should purchase professional liability insurance include architecture & engineering, law, medicine, fitness, and computer technology.
As with all forms of small business insurance, the cost of professional liability insurance varies depending on the business, policy limit, and company revenue. Quote estimates from Hiscox indicate that the average professional liability insurance policy is in the ballpark of $36 to $65 per month.
Commercial Property Insurance
Commercial property insurance offers financial protection for damages to a business’s physical assets, including buildings, equipment, tools, inventory, and furniture. More specifically, this type of insurance covers damages that occur as a result of a fire, vandalism, and theft. However, it will not cover intentional damages to property, damages that result from flooding, damages from natural disasters, or damages to the company’s vehicles.
Small businesses with a physical location and/or inventory should carry commercial property insurance. This may include retailers, wholesalers, and restaurants, as well as businesses that offer professional services. Commercial property insurance applies to businesses that own their own buildings, as well as those that rent office space within a building. In fact, many landlords will require their business tenants to provide proof of commercial property coverage. The cost of commercial property insurance depends on the value of the building and its contents, so requesting a quote is the best way to determine the policy’s cost. Commercial property insurance can also be bundled with general liability insurance into a business owners policy.
Business Owners Policy
A business owners policy (BOP) combines both property and general liability coverage. The liability component includes the same type of coverage that would be found in a general liability policy, such as bodily injury, property damage, and advertising costs. The property coverage component protects the “business personal property,” which are the buildings and the movable property owned, rented, or used by the business. Some BOP policies will also cover business income insurance.
A business owners policy can be a good choice for small- and medium-size businesses, such as restaurants, retail stores, and contractors. The main benefit of a BOP is that it simplifies the insurance buying process and can reduce costs by bundling multiple coverages into one package. According to Progressive, small businesses nationwide that bought a new BOP policy paid $80 per month on average. However, it is important to request a quote based on your business’s needs in order to determine your own costs.
Business Income Insurance
Business income insurance is coverage that helps your business replace lost income as a result of a disaster such as fire, vandalism, or wind damage. This is also known as “business interruption” insurance because if your business cannot perform its normal operations as a result of a covered loss, the insurance will reimburse costs until your business is able to operate again. Common exclusions to business income insurance are for losses that result from floods, earthquakes, and personal injury or illness. It also won’t cover losses if your business is only partially closed, and some parts of it can operate.
Brick-and-mortar businesses would benefit from business income insurance since it is designed to cover income losses that result from property damages. It is usually less useful or completely unnecessary for online businesses or those that operate without a physical building. The cost of business income insurance varies significantly depending on the business, location, and level of risk involved.
Workers’ Compensation Insurance
Workers’ compensation insurance (or “workers’ comp”) covers expenses that your business incurs if an employee becomes injured on the job. Workers’ comp provides coverage for the employee’s medical care, lost wages as a result of the injury, and disability or funeral benefits. This type of insurance can also cover legal costs if an injured employee or their family sues the business. However, workers’ comp doesn’t cover injuries that occur when an employee is under the influence, injuries that occur while an employee is not working, or injuries that occur as a result of an employee’s conduct that violates company policy.
In most states, employers must provide workers’ comp to their employees. However, it is important that businesses adhere to the specific laws in the states where they have employees. The cost of workers’ compensation insurance also varies based on a number of factors, including state laws, the number of employees, and the risk involved in the work done at your business. According to Progressive, small business owners who purchased workers’ compensation through the Progressive paid an average of $85 per month last year.
Commercial Auto Insurance
Small businesses that transport goods or people and own or utilize corporate vehicles for official company business are required to have commercial auto insurance. Commercial auto insurance covers expenses related to auto accidents if the employer or an employee is at fault. For example, commercial auto insurance serves as financial protection for business owners if an employee hits a pedestrian while driving a company vehicle, if they swerve and hit a mailbox, or if a car accident occurs where the other car is damaged or totaled.
Like small business insurance, commercial auto insurance is also a combination of multiple coverages. These coverages include primary liability, property damage, physical damage, medical payments, and uninsured motorists coverage. A comprehensive commercial auto policy offers the broadest amount of financial protection for your business, employees, and third parties in the event of an auto accident. While commercial auto insurance covers many types of auto incidents, it does not cover the contents of the vehicle or accidents that occur while driving rentals or personal vehicles. Furthermore, different states and different types of commercial vehicles have their own requirements for commercial auto insurance, which impact the overall cost. For example, businesses that use different types of trucks, like semis and tow trucks will have specific coverage requirements defined by the states they operate in. For these businesses, a more specific commercial truck insurance policy will often be best.
Cyber Liability Insurance
According to a report released by the I.I.I. and J.D. Power, 10 percent of small businesses were victims of at least one cyber incident in 2017 and suffered an average loss of $188,400. Only 31 percent of the affected businesses had cyber insurance coverage, which would have mitigated their losses.
Cyber liability insurance covers the cost for businesses recovering from a cyberattack or a data breach. Business owners processing sensitive information (names, social security numbers, addresses, protected records, etc.) should have standalone cyber liability insurance. Cyber liability insurance covers direct losses and damages from cyberattacks, including legal fees, repairs to computer systems, and expenses associated with recovering compromised data. It does not cover indirect losses and damages to your business or brand, such as potential lost profits in the future.
The cost of cyber liability insurance varies greatly depending on whether your business is considered high-risk or low-risk. Progressive states that cyber liability insurance may cost as little as $500 per year or as much as $5,000 per year. In deciding the annual cost of cyber liability insurance, insurance companies evaluate cost factors like the number of people that have access to your data systems, how secure your data system is, and the sector in which your business operates.
Business Health Insurance
According to the Affordable Care Act, small businesses with fewer than 50 full-time employees are not legally required to provide group health insurance coverage to their employees. However, it is still a good idea for small businesses to look after employees’ health and offer this benefit as a recruitment and retention tool.
Fortunately, small businesses have several options for purchasing health insurance. These include traditional group coverage, such as plans offered through the Small Business Health Options Program (SHOP), or a Health Reimbursement Arrangement (HRA), in which employers reimburse employees for out-of-pocket medical expenses.
The cost of business health insurance will vary by plan. Health insurance premiums (the monthly cost of the policy) are usually split between an employer and an employee. However, the employer contribution to employees’ health insurance premiums may also be eligible for a tax deduction, offsetting part of the cost.
Commercial Liability Umbrella
Commercial liability umbrella coverage gives business owners an extra layer of liability coverage to help protect their businesses in the event of substantial loss. Commercial liability umbrella coverage helps businesses pay the costs that exceed general liability coverage limits.
It is important to know that commercial liability umbrella policies are supplemental to general liability policies. A small business cannot extend the coverage of a policy if that primary general liability policy does not exist. It is also important to know that commercial liability umbrella coverage does not extend all liability coverage equally. It will extend coverage for general liability insurance, employer’s liability insurance, and commercial auto liability insurance. However, it does not usually cover professional liability, lawsuits related to employee discrimination, or damages to business property.
While commercial liability umbrella coverage is not required, businesses that work in industries that routinely interact with clients, utilize heavy machinery, or engage in business activities with a high risk of personal injury may benefit from this policy. Furthermore, if you think that the cost of a claim could ever exceed the limitations of your general liability policy’s respective liability limits, you should consider purchasing a commercial liability umbrella.
The cost of commercial liability umbrella coverage varies greatly across businesses and is generally based on the level of risk of the business. The size of the business, industry in which the business operates, and the limits of the general liability policy are all factors that insurance companies must take into consideration when assessing the cost.
Small Business Life
Like health insurance, small businesses may wish to provide their employees with life insurance as one of their benefits. A life insurance policy provides financial protection for the policyholder’s family in the event of their death. If the policyholder dies while the life insurance policy is active, the insurance company provides a payment to the policyholder’s designated beneficiary, according to the amount specified in the policy.
Most types of small business life insurance are “term life” policies, which mean they have low premiums but only last for a defined period of time, such as 20 or 30 years. Small business life insurance is typically offered as “group insurance” for multiple employees at once, which is less expensive than purchasing individual policies. Employers may choose to offer life insurance as a benefit up to a certain amount (such as one to two times the employee’s salary), and give the employee the option to purchase additional coverage on their own.
Employment Practices Liability
In 2019, 72,675 workers nationwide filed charges of workplace discrimination with the Equal Employment Opportunity Commission (EEOC). As a business owner, you may face lawsuits related to wrongful termination, discrimination, workplace harassment, or other employment-related issues. Employment practices liability insurance (EPLI) provides coverage for business owners against these types of employee allegations. While EPLI provides coverage of employment-related issues, it does not cover criminal conduct, civil fines, or claims covered by other insurance policies.
Regardless of the industry or the size of the business, all business owners who hire employees can exercise caution by purchasing an EPLI policy. The cost of your EPLI will be calculated based on the size of your business, the risk profile of your business, the number of employees you have, and the industry in which you operate.
Prevention is the most effective means of addressing employment-related issues, and many insurance companies offer educational information for business owners to share with employees and managers to minimize the potential problems. Recommended business practices include creating effective and non-discriminatory hiring procedures, making sure that managers and employees are aware of company policies, and explaining the proper steps and channels that an employee with a grievance can take if they feel that a supervisor has caused an employment-related issue.
Businesses in California, Hawaii, New Jersey, New York, or Rhode Island are required by law to provide employees with short-term disability insurance. Even in states where this is not required, small businesses may wish to offer disability insurance to employees as part of their benefits package. Disability insurance differs from workers’ compensation because workers’ comp covers work-related injuries, while disability insurance replaces some of an employee’s lost income if they are injured or fall ill due to incidents that happened outside of work.
Disability insurance is either short-term or long-term, and each covers different things. Short-term disability typically lasts between three and six months and covers 80% of a worker’s salary, while long-term disability lasts more than six months and covers 60% of a worker’s salary. Neither short-term nor long-term disability insurance cover work-related injuries, and some policies also exclude mental health disorders.
The terms of the disability policy will explicitly state if it offers “own occupation” coverage or “any occupation” coverage. In “own occupation” coverage, employees are eligible for disability benefits if they can no longer perform their current job but could do another job. By contrast, “any occupation” coverage means that employees are only eligible for disability benefits if their disability means they cannot perform any job at all. While the overall cost of disability insurance varies by industry and number of employees, the Bureau of Labor Statistics estimates that the cost of providing short- and long-term disability insurance amounts to about 1 percent of employees’ total compensation.
Key Employee Insurance
Key employee insurance (or key person insurance) is a type of life insurance to compensate your business through a death benefit payment if a vital employee dies. A “key employee” is someone who contributes a significant amount of income to your business due to their individual knowledge and skills. Key employee insurance may be necessary if the sudden loss of an individual employee, such as the owner or a top salesperson, through death or disability might damage the reputation or financial viability of a business.
The amount of key person insurance that needs to be purchased is unique to each business, and the costs associated with this insurance will vary accordingly. If you have employees that you consider to be irreplaceable, it might be wise to obtain this type of insurance. Otherwise, this insurance is not necessary for your small business policy.
Equipment Breakdown Insurance
Equipment breakdown insurance offers financial protection if your company’s mechanical, electrical, and technological equipment suffers from sudden breakdowns. Equipment breakdown insurance helps to cover the cost to repair or replace damaged equipment, lost income due to the unexpected breakdown of equipment, and loss of product due to unexpected equipment failure.
Nationwide identifies five categories of equipment that are routinely covered by equipment breakdown insurance: mechanical, electrical, computers and communications, air conditioners and refrigeration systems, and boilers/pressure equipment. Whether or not you need this type of policy depends on the equipment your business uses, as well as how essential it is for generating revenue. If your business owns or operates equipment whose unexpected breakdown would result in the significant loss of income or the inability to conduct normal business operations, then you should consider equipment breakdown insurance.
Equipment breakdown insurance also helps in providing coverage where commercial property insurance does not. While commercial property insurance covers damages caused by external factors such as fires or vandalism, it does not cover damages by internal factors such as the mechanical breakdown of equipment, short circuits, or other direct failures of equipment. It is important to note that equipment breakdown insurance does not extend to software failures, nor to damages due to normal wear and tear. Costs for this coverage vary based on the value of the equipment that needs to be covered, as well as the amount of the potential lost business income.
Inland Marine Insurance
Despite having the word “marine” in its name, inland marine insurance covers products, equipment, and other business-related materials that are transported over land. Businesses that transport high-value items as a core part of their business should consider inland marine insurance. Inland marine insurance helps cover the cost to replace or repair high-value products or equipment should they be subject to theft, elemental damage (fire, water damage, etc.), accidental damage from mishandling, or loss during transport.
While typical business owner policies include general liability and commercial property, you should consider supplementing coverage with a standalone inland marine insurance policy if your business routinely ships high-value items such as communications equipment, computers, contractor or construction equipment, or fine art. If your business does not transport goods at all, this coverage is not necessary. The cost of coverage depends on the size of your business, the level of protection that you want for your products, equipment, or other business-related materials, and the frequency by which you use land-based transportation for the movement of those high-value items.
Small Business Insurance Costs
How Much Does Small Business Insurance Cost?
The cost of small business insurance varies significantly, depending on types of coverage you need. The table below shows the approximate price range for different types of small business insurance coverage.
|Type of Small Business Insurance||Average Cost per Year|
|Business Owners Policy||$500–$3,500|
|Workers Compensation||$1–2 for every $100 of covered payroll|
|Commercial Auto||$800–$5,000 per vehicle|
As you can see, the average cost per year has a wide variation. The best way to determine how much you’ll need to pay for small business insurance is to speak with an insurance agent and request a custom quote.
Factors That Affect the Cost of Small Business Insurance
There are many factors that affect the cost of small business insurance. Even though small business insurance encompasses many individual coverages, similar factors affect the cost of all of them. Some of these common factors include:
- Business size: Larger businesses with more property and equipment will likely require higher limits for commercial property coverage, thereby driving up the cost. Similarly, companies with higher revenue will have more to protect in the event of business interruption or a lawsuit, so will also incur higher costs.
- Location: The business’s location can affect cost due to local laws regarding insurance requirements, as well as geographical risks such as flooding, wildfires, or tornadoes.
- Industry: Some lines of business such as tow trucking and construction are particularly risky, requiring additional insurance coverages or higher policy limits that will increase the cost. In addition, businesses that transport products or equipment may also need to consider costs for commercial auto insurance and inland marine insurance.
- Number of employees: Businesses with more employees tend to incur higher insurance costs because of the increased chances of incidents that would lead to an insurance claim. In addition, small businesses with employees will need a workers’ compensation policy, which adds to the total cost of small business insurance. Businesses that provide business health, life, and disability insurance will also pay more or less depending on the number of employees at the company.
- Discounts: Some insurance companies will offer discounts for multi-policy purchases, businesses that have been in operation for several years, or businesses that pay the full annual premium up front. Businesses that implement loss control and risk management services may be eligible for lower premiums. In addition, purchasing a business owners policy rather than individual coverage for general liability and commercial property can lower costs.
Ultimately, contacting an insurance representative and requesting a quote is the best way to determine your estimated cost for small business insurance.
Finding the Best Small Business Insurance
Factors to Consider
What Insurance Coverage Do You Need? And How Much?
The type of coverage your business needs depends on your industry, business size, and number of employees. Most businesses will need coverage for general liability, commercial property, and workers’ compensation, but more specialized policies depend on the business’s services and level of risk. For example, an accountant or a lawyer will need professional liability insurance but not inland marine insurance, while a construction business will need inland marine and commercial auto insurance, too. The following section of this guide will explore some of the types of coverage that different industries should consider. In addition, businesses that generate more revenue and have more employees usually need higher coverage limits, especially for business income insurance.
Company reputation is also an important factor in choosing an insurance company for your small business. You may wish to consult resources like the National Association of Insurance Commissioners (NAIC), which calculates insurance companies’ market share based on the number of premiums written. Organizations like the Better Business Bureau (BBB) and J.D. Power also provide a snapshot of customer satisfaction based on reviews and surveys. You can also explore in-depth guides like this one about insurance companies that specialize in helping small businesses.
As a small business owner, you will want reassurance that your chosen insurance company can pay out any claims that arise during your policy period. That’s why financial strength is a core component of choosing an insurance provider. One indicator of an insurer’s financial strength is its longevity; insurance companies that have been around for almost a century have already survived through periods of economic uncertainty and may be on stronger financial footing. Public companies are also required to make their financial filings and documents available online, so you can review them yourself. Since not all insurance companies are publicly traded, another method to understand insurance companies’ financial health is to compare ratings from AM Best, Moody’s, and S&P.
In order to get the most accurate information around pricing, you will need to request a customized quote from the insurance company. Some insurers will allow you to request a quote directly online, while others may require you to speak with an insurance representative. Insurance companies may also offer discounts, such as if you pay the year’s premium up front, bundle multiple insurances together, implement safety programs, or have been in business for a few years. For example, policyholders who have a commercial auto policy through Progressive could also qualify for a Package discount between 10% and 15% off if they also have a BOP or general liability insurance.
Small Business Insurance for Each Industry
Retail Stores and Services
Retail stores have many factors to consider when selecting small business insurance. For example, retailers will usually want to choose coverage that protects against damages to the store’s physical location, inventory, employees, and customers.
At a minimum, retail businesses should purchase a business owners policy, or separate coverages for commercial property, general liability, business income, and equipment breakdown. Commercial property insurance for retail businesses can protect the physical building, as well as owned or rented equipment such as shelves, computers, and cash registers. General liability can be used to cover expenses if a customer gets injured at the store, such as in a slip-and-fall, or suffers damage to their personal property, such as if an employee accidentally breaks the customer’s phone.
Depending on the state, retailers may be required by law to have workers’ compensation insurance. While not required, retail stores should also consider employee practices liability insurance to protect the business against current or former employees’ claims of discrimination, harassment, or wrongful termination. Another coverage that may be useful is cyber liability insurance, if the retailer collects and stores customer information online. Retailers should also purchase inland marine insurance and commercial auto insurance if company vehicles are used to transport inventory.
Professional offices refers to specialized service-sector occupations such as law, accounting, architecture, and medicine. Like most small businesses, professional offices should enroll in a business owners policy, or separate coverages for commercial property, general liability, business income, and equipment breakdown. If your company uses vehicles as part of your normal business practice, then you should also have commercial auto insurance.
Due to the nature of professional work, which typically involves providing a service or giving advice to a client, these types of businesses should also seek a robust professional liability insurance policy. This will offer financial protection against client claims related to the business’ negligence, errors, or omissions that culminate in financial loss for the client. Cyber liability insurance is also a good idea for professional offices, since many collect and store sensitive information like patient data (for healthcare) or social security numbers (for accounting).
Professional offices with employees (as opposed to sole proprietors) may be required by state law to have a workers’ compensation policy in place. In addition, professional offices with employees may benefit from purchasing employment practices liability insurance.
Small businesses that are categorized as “contractors”—including electricians, plumbers, HVAC contractors, carpenters, and construction workers—typically work in higher-risk industries and will therefore require more comprehensive coverage. The types of coverage recommended for contractors depends on their specific line of work, but most should start with a business owners policy or a combination of general liability, commercial property, and business income insurance. Contractors who work on a project for a larger company will usually be required by that company to carry general liability insurance up to a certain amount, so it’s important to choose an insurer that can offer the desired level of coverage.
Workers’ compensation insurance is also important for contractors with employees, especially those in high-risk industries like construction. Contractors should also consider adding loss control services and risk management to their coverage in order to improve safety and reduce hazards that could lead to an accident. Furthermore, contractors that use a vehicle for a business purpose will be required to carry commercial auto insurance, and vehicles that are used in construction (such as tow trucks and cement mixers) often have even more stringent insurance requirements. Contractors who use vehicles to transport materials may also wish to enroll in inland marine insurance.
Auto Service and Repair
Auto service is another high-risk industry because it requires performing repairs on automobiles while using expensive, heavy equipment. Auto service shops should start with the usual business owners policy (or general liability, commercial property, and business income insurance), but will also need equipment breakdown and commercial auto insurance due to their work with cars.
Other specific coverages that would be beneficial for auto service and repair shops include garagekeepers liability and garagekeepers legal liability. Garagekeepers legal liability is a type of insurance that covers property damages to a customer’s vehicle while it is being stored or serviced at a garage (such as an auto shop), if the business is found at fault for the damage. Likewise, garagekeepers coverage offers financial protection for customers’ vehicles that are stored at the garage, but only for damages that are not the fault of the company, such as fire or vandalism. For auto service and repair shops that hire employees, workers’ compensation insurance is also important due to the dangerous nature of the work.
Wholesalers and Distributors
Wholesalers and distributors are responsible for a lot of property, in terms of a physical warehouse, product delivery, and inventory storage. An accident like a fire or theft can cause significant harm to the business. Supply chain challenges, such as late deliveries, can also severely threaten finances. These special circumstances affect the type of insurance that wholesalers and distributors should buy.
Wholesalers and distributors will need a business owners policy (or general liability, commercial property, and business income insurance). In addition, wholesalers and distributors will most likely need commercial auto insurance and inland marine insurance to ensure financial protection for employees on the road and property in transit. Wholesalers and distributors are likely to have employees, many of whom will be performing manual labor, so a strong workers’ compensation policy will ensure adherence to state laws and offer financial protection in the event of an accident, too.
Food and Beverage Businesses
Food and beverage businesses include restaurants, food trucks, and coffee shops. Small businesses in the food and beverage industry will need a business owners policy, or a combination of general liability, commercial property, and business income insurance. These are especially important because the high volume of customers can carry a heightened risk of personal injury, and accidents such as kitchen fires can lead to significant property damage.
Food and beverage businesses should also consider purchasing utility services coverage and spoilage coverage, which cover losses resulting from interrupted utility services (such as spoiled food after a refrigerator’s power goes out). Establishments that serve alcohol should consider liquor liability insurance, which can cover legal costs and civil damages that may result from liquor sales.
Since food and beverage businesses typically have employees, they should have a workers’ compensation policy and may also benefit from employee practices liability insurance. Food and beverage businesses that offer delivery services or catering will need a commercial auto insurance policy, too.
Self-storage facilities tend to have a lot of physical property—both their own and their customers’—to protect, which will affect the type of insurance needed. Self-storage facilities will need a business owners policy, or a combination of general liability, commercial property, and business income insurance. They will likely need to purchase a workers’ compensation policy if they have employees, and will require a commercial auto insurance policy if they use a vehicle for company business.
A specialty coverage that self-storage facilities should also consider purchasing is sales and disposal liability, which covers reimbursement to a tenant in the event that the business wrongfully sells or destroys the tenant’s property. These small businesses should also purchase customer property legal liability, which covers damages that occur to customers’ stored property while in the storage unit.