Do I Need Business Insurance?

If your business is run entirely by you, without employees or subcontractors, business insurance may not be necessary right now.

• Why this is often true: When you operate entirely on your own, without employees or subcontractors, your business avoids many of the legal and injury-related obligations that drive insurance needs. Risk is limited to your own actions, and losses are often easier to anticipate and control.
• Coverage this typically applies to: Workers’ compensation, employer-related liability, and sometimes general liability in very low-risk work.
• When to consider additional coverage: If you hire help, bring on subcontractors, or your work creates exposure beyond what you could comfortably pay out of pocket.

Businesses that operate without direct interaction with clients, customers, or the public may not need insurance in the early stages.

• Why this is often true: Businesses that don’t interact directly with clients, customers, or the public have fewer opportunities for third-party injury or property damage claims. With no outside parties involved, the likelihood of a liability claim is often low.
• Coverage this typically applies to: General liability.
• When to consider additional coverage: If your work becomes client-facing, involves site visits, or places you in public spaces.

If your work does not involve giving advice, recommendations, or professional judgment that others rely on, insurance may be optional.

• Why this is often true: If your work doesn’t involve providing advice, recommendations, or professional judgment that others rely on, disputes tied to errors or omissions are less likely. Outcomes are typically clear and transactional rather than interpretive.
• Coverage this typically applies to: Professional liability (errors and omissions).
• When to consider additional coverage: If clients begin relying on your expertise, analysis, or recommendations to make decisions.

Businesses that don’t manufacture, sell, or distribute products often have fewer reasons to carry insurance.

• Why this is often true: Businesses that don’t sell or distribute products avoid exposure related to product defects, misuse, or injury after a sale. Without products in circulation, liability risk often remains limited to service or operational issues.
• Coverage this typically applies to: Product liability (often included in general liability).
• When to consider additional coverage: If you begin selling physical goods, digital products, or branded items under your business name.

When vehicles aren’t part of how work is performed, additional coverage may not be needed.

• Why this is often true: Personal auto insurance may be sufficient when driving is unrelated to business activity.
• Coverage this typically applies to: Commercial auto.
• When to consider additional coverage: If driving becomes part of your work, even occasionally.

If your business doesn’t rely on physical space, equipment, or inventory, insurance may be unnecessary for now.

• Why this is often true: With no assets to insure, potential losses tend to be limited and predictable.
• Coverage this typically applies to: Commercial property and inland marine.
• When to consider additional coverage: If you lease space, purchase equipment, or store inventory.

Some businesses intentionally operate without insurance because they can absorb small losses without disruption.

• Why this is often true: When exposure is clearly limited and cash flow is stable, self-insuring minor risks can be a good choice.
• Coverage this typically applies to: General liability, property, or professional liability at very low exposure levels.
• When to consider additional coverage: If a single unexpected event could strain finances or interrupt operations.