Business insurance is a financial safety net against unforeseen damages that happen during commercial operations. Depending on the types of coverage you choose, the items covered differ and you can modify your per occurrence (select types) and per year limits to fit your needs.
Business Insurance Coverage
Business insurance covers you for unforeseen damages from lawsuits, accidents and disasters and is often required by states or clients in some form.
Find comprehensive business insurance coverage that protects your company below.
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Updated: September 17, 2025
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Key Takeaways
Most business insurance coverage protects you up to a per occurrence and aggregate per year limit for damages associated with commercial operations.
Most states and contracts require business insurance coverage, typically including general liability, workers comp, commercial auto, and professional liability insurance.
Most small businesses need BOP insurance which combines general liability, commercial property and business interruption insurance coverage.
What Is Business Insurance?
What Does Business Insurance Cover?
Business insurance can cover financial losses from liability claims, property damage, employee injuries, and business interruptions. It is also able protect against cyber incidents, professional mistakes, key personnel loss, criminal activities, and regulatory violations that could significantly impact your company's operations and finances. The specific terms and conditions of your coverage vary based on the types you choose to purchase.
Types of Business Insurance Coverage
Below, we've summarized the types of business insurance coverage you can purchase, their limit structures, and the businesses areas who need it:
Third-party injury claims, property damage to others, advertising injury lawsuits, and associated legal costs | Per occurrence limit / Annual aggregate limit (e.g., $1M per occurrence, $2M aggregate) | All businesses with customer interaction, retail stores, restaurants, service providers, contractors | |
Physical business assets including buildings, equipment, inventory, and lost income when property damage forces temporary closure | Building limit / Contents limit / Business income limit (actual cash value or replacement cost basis) | Manufacturing, retail, warehousing, restaurants, offices with significant equipment/inventory | |
Medical care, wage replacement, disability benefits, and death benefits for employees injured or killed on the job | Statutory benefits per state requirements / Unlimited medical / Percentage of wages for disability | All businesses with employees (required by law in most states), especially construction, manufacturing, healthcare | |
Vehicle damage, liability for accidents involving company vehicles, medical payments, and rental car expenses | Combined single limit or split limits for liability / Actual cash value or stated amount for physical damage / Per person/per accident for medical payments | Delivery services, trucking companies, sales teams, contractors, any business using vehicles for work | |
Claims of professional negligence, service errors, and misrepresentation in your professional work | Per claim limit / Annual aggregate limit / Defense costs may be inside or outside limits | Doctors, lawyers, accountants, consultants, architects, engineers, financial advisors, IT professionals | |
Data breaches, cyber attacks, ransomware, business interruption from digital incidents, and regulatory penalties | Per incident limit / Annual aggregate limit / Separate sub-limits for different coverage types | Healthcare, financial services, e-commerce, tech companies, any business handling sensitive customer data | |
Lost income and ongoing expenses when your business is temporarily shut down due to covered disasters | Actual loss sustained basis / Maximum indemnity period (e.g., 12-24 months) / Monthly limit of indemnity | Manufacturing, retail, restaurants, any business dependent on physical location or continuous operations | |
Employee lawsuits including wrongful termination, discrimination, harassment, and wage disputes | Per claim limit / Annual aggregate limit / Defense costs typically outside limits | All businesses with employees, especially larger employers, healthcare, hospitality, financial services | |
Personal liability protection for company leaders from management decisions and shareholder lawsuits | Per claim limit / Annual aggregate limit / Separate limits for entity vs. individual coverage | Public companies, private companies with outside investors, nonprofits, banks, healthcare organizations | |
Additional liability coverage beyond your primary policies for catastrophic claims | Single limit per occurrence / Annual aggregate limit (typically $1M-$10M+ increments) | High-risk businesses, contractors, manufacturers, any business with significant liability exposure | |
Injuries and property damage caused by defective products you manufacture or sell | Per occurrence limit / Annual aggregate limit / May include product recall expense limit | Manufacturers, importers, distributors, retailers selling physical products, food and beverage companies | |
Key Person Insurance | Financial losses when critical employees die or become disabled | Face amount per insured person / May include disability income benefits | Small businesses dependent on owners/key employees, startups, professional practices, family businesses |
General liability and property coverage with business interruption protection in a single package | Combined limits for liability / Separate property limits / Business income limit based on actual loss | Small to medium businesses, offices, retail stores, restaurants, service businesses | |
Employee theft, fraud, forgery, robbery, and other criminal acts targeting your business | Per occurrence limit for each type of crime coverage / Annual aggregate may apply | Banks, retail businesses, businesses handling cash, companies with access to customer funds | |
Fiduciary Liability Insurance | Breaches of duty in managing employee benefit plans and ERISA violations | Per claim limit / Annual aggregate limit / Defense costs may be included or separate | Companies with employee benefit plans (401k, health insurance), plan administrators, trustees |
International Business Insurance | Overseas operations including foreign liability, political risks, and currency fluctuations | Varies by coverage type / Territory-specific limits / May include blanket worldwide coverage | Multinational corporations, exporters/importers, companies with overseas offices, international contractors |
Marine Insurance | Cargo, vessels, and related liability during transportation and storage | Per voyage or annual policy / Agreed value for cargo / Hull value for vessels | Shipping companies, importers/exporters, freight forwarders, port operators, vessel owners |
Aviation Insurance | Aircraft damage, aviation liability, and specialized risks for businesses that own or operate aircraft | Hull value for physical damage / Combined single limit for liability / Per passenger limits | Airlines, charter services, aircraft manufacturers, airports, businesses owning corporate aircraft |
Environmental Liability Insurance | Pollution cleanup costs, environmental damage claims, and regulatory compliance expenses | Per claim limit / Annual aggregate limit / Cleanup cost limits may be separate | Manufacturing, chemical companies, gas stations, dry cleaners, waste management, construction |
Trade Credit Insurance | Customer payment defaults and international trade risks | Credit limit per buyer / Annual aggregate limit / Percentage of loss covered (typically 85-95%) | Exporters, manufacturers with large accounts receivable, companies extending credit terms |
Supply Chain Insurance | Disruptions from supplier failures, transportation delays, and raw material price volatility | Per event limit / Annual aggregate limit / Waiting period before coverage kicks in | Manufacturing, automotive, electronics, retail chains, businesses with complex supply chains |
Intellectual Property Insurance | Patent, copyright, and trademark infringement claims and enforcement costs | Per claim limit / Annual aggregate limit / Defense costs may be separate or included | Technology companies, software developers, pharmaceutical companies, media companies, inventors |
Event Cancellation Insurance | Lost revenue and expenses when business events are cancelled due to covered circumstances | Sum insured based on projected revenues/costs / May include additional expense coverage | Event planners, entertainment venues, sports organizations, trade show companies, wedding planners |
Equipment Breakdown Insurance | Mechanical failures, spoilage, and business interruption when critical equipment breaks down | Per accident limit / Annual aggregate limit / Business income and extra expense sub-limits | Manufacturing, data centers, hospitals, restaurants, any business dependent on specialized equipment |
Contract performance, license compliance, and employee honesty through financial backing | Bond penalty amount (face value) / May have annual aggregate for fidelity bonds | Construction contractors, government contractors, auto dealers, mortgage brokers, licensed professionals | |
Terrorism Insurance | Property damage and business interruption resulting from certified terrorist attacks | Per occurrence limit / Annual aggregate limit / Separate limits for property vs. business income | High-profile businesses, major metropolitan areas, critical infrastructure, large commercial properties |
Kidnap and Ransom Insurance | Ransom payments, crisis response, and security services for businesses with overseas exposure | Per incident limit / Annual aggregate limit / Sub-limits for different types of expenses | Multinational corporations, businesses operating in high-risk countries, executive protection services |
Business Travel Insurance | Medical coverage, evacuation services, and trip-related expense reimbursement for traveling employees | Per person limits / Per trip limits / Annual aggregate limits / Medical expense sub-limits | Companies with frequent business travel, international operations, sales teams, consulting firms |
Contingent Liability Insurance | Liability you assume through contracts, indemnification agreements, and subcontractor relationships | Per occurrence limit / Annual aggregate limit / May mirror underlying policy limits | Contractors, joint ventures, companies using subcontractors, businesses with indemnity agreements |
Technology Insurance | Software errors, system failures, data restoration, and technology-related liability claims | Per claim limit / Annual aggregate limit / Separate limits for different coverage components | Software companies, IT service providers, SaaS companies, technology consultants, app developers |
Clinical Trials Insurance | Participant injuries, product liability, and regulatory investigation costs during medical trials | Per participant limit / Per study limit / Annual aggregate limit / Legal expense sub-limits | Pharmaceutical companies, medical device manufacturers, research organizations, hospitals conducting trials |
Coverage for claims made after a claims-made policy expires, covering incidents that occurred during the policy period | Extended reporting period length (1-6 years or unlimited) / Same limits as expired policy / One-time premium payment | Professional service providers switching insurers, retiring professionals, businesses ending claims-made policies | |
Theft, damage, or loss of specialized tools and equipment used in business operations | Scheduled item limits or blanket coverage / Replacement cost or actual cash value / May include rental reimbursement | Contractors, electricians, plumbers, mechanics, landscapers, photographers, musicians, mobile service providers | |
Liquor Liability Insurance | Claims arising from serving alcohol to intoxicated patrons who cause injury or property damage | Scheduled item limits or blanket coverage / Replacement cost or actual cash value / May include rental reimbursement | Bars, restaurants, breweries, nightclubs, liquor stores, event venues, any business serving alcohol |
Livestock Insurance | Death, injury, or theft of farm animals and livestock during transport or on premises | Per animal value or blanket coverage / Mortality and transit coverage / May include carcass removal | Farmers, ranchers, livestock transporters, veterinary clinics, animal breeding operations, equine facilities |
Farm Liability Insurance | Bodily injury and property damage claims from farming operations and agricultural activities | Per occurrence limit / Annual aggregate limit / Covers farm premises and operations | Farmers, ranchers, agribusiness operations, farm equipment operators, agricultural contractors |
Host Liquor Liability Insurance | Liability for serving alcohol at temporary events where alcohol service is not the primary business | Per event limit / Short-term coverage / Covers bodily injury and property damage | Event hosts, wedding planners, corporate events, private parties, temporary alcohol service |
Coverage for property in transit, mobile equipment, and property away from fixed locations | Scheduled equipment values / All-risk or named perils / May include installation coverage | Construction companies, photographers, mobile service providers, contractors with portable equipment | |
Flood Insurance | Property damage and contents loss from flooding not covered by standard property policies | Building coverage limit / Contents coverage limit / Separate deductibles for each | Businesses in flood zones, coastal areas, near rivers or lakes, any business wanting flood protection |
Earthquake Insurance | Property damage from seismic activity not covered by standard commercial property policies | Building and contents limits / Percentage deductibles / Separate coverage for business interruption | Businesses in seismic zones, California, Pacific Northwest, New Madrid fault area |
Identity Theft Insurance | Expenses related to identity theft recovery for business owners, employees, or customers | Per incident limit / Annual aggregate / Covers legal fees, lost wages, document replacement | All businesses, especially those handling personal data, financial services, healthcare, retail |
Representation and Warranty Insurance | Protection for breaches of representations and warranties in merger and acquisition transactions | Policy limit based on transaction value / Survival period coverage / Covers buyer and seller | Companies involved in M&A transactions, private equity firms, investment banks |
Garage Liability Insurance | Coverage for auto dealers and service facilities for damage to customer vehicles and premises liability | Per occurrence limit / Garage keepers coverage for customer vehicles / On-hook towing coverage | Auto dealerships, repair shops, parking garages, towing companies, auto service centers |
Hired and Non-Owned Auto Insurance | Liability coverage for vehicles not owned by business but used for business purposes | Combined single limit / Extends commercial auto coverage / Covers rental and employee vehicles | Any business whose employees drive personal or rental vehicles for work purposes |
Business Identity Theft Insurance | Protection for businesses against identity theft and fraud targeting the company itself | Per incident limit / Covers investigation, legal costs, business interruption / Credit monitoring | All businesses, especially small businesses, sole proprietors, businesses with online presence |
Do You Need Business Insurance?
epIn most cases, you will be required to have general liability, workers compensation insurance and commercial auto insurance. However, your legal business insurance coverage requirements will differ widely depending on your industry, stage of your business and more.
To help you understand what is likely required of you to help your search, we've outlined some common scenarios and the coverage that is required or often needed below:
- Having Employees: While requirements vary by state, workers comp insurance is often required if you have a certain specified number of employees.
- Owning business vehicles: Similar to workers comp, commercial auto insurance is required in most states and differs depending on the type of vehicle you are using for business and its function.
- Conducting Business as a Licensed Professional: Most licensed professionals such as accountants and lawyers often need some form of professional liability insurance or specialized malpractice insurance.
- Serving Alcohol: If you serve alcohol in any context as part of business activities, you're usually required in to have liquor liability insurance.
- Signing a Lease or Getting a Business Loan: Signing a business lease or loan often requires you to get general liability and commercial property insurance as part of the contract.
- Handling Customer Data: If you are in tech or it and are handling customer data, cyber liability insurance, also known as data breach insurance, is required.
- Being in the Construction or Contracting Industry: You often need general liability, workers comp, commercial auto and professional liability insurance as a requirement. However, depending on specific business type and contract, you may need builders risk, umbrella, surety bond, equipment, cyber, and employment practices coverage.
Business Insurance Requirements by State
Each state sets its own rules for business insurance coverage, creating a complex landscape for business owners. Workers' compensation and commercial auto insurance are standard across most states, but you'll find different employee counts, exemptions, and industry rules depending on where you operate.
The table below shows what each state requires, including key exemptions and special rules that might apply to your business.
Workers' Compensation, Commercial Auto, Contractor Bonds (Construction) | Workers' compensation coverage is required for businesses with five or more employees at state minimum benefit rates. Commercial auto insurance must meet state liability minimums of $25,000 per person for bodily injury, $50,000 per accident for bodily injury, and $25,000 for property damage. Licensed contractors require surety bonds ranging from $2,500 to $10,000 depending on project location. | Up to five corporate officers may waive workers' compensation coverage on themselves. Sole proprietors and partners are excluded but may elect coverage. General contractors performing work above $5,000 must be licensed and bonded. | |
Workers' Compensation, Commercial Auto, Contractor Bonds (Construction) | Workers' compensation is mandatory for businesses with one or more employees at state-determined benefit levels. Commercial auto insurance requires minimum liability coverage of $50,000 per person for bodily injury, $100,000 per accident for bodily injury, and $25,000 for property damage. Passenger-carrying vehicles need $500,000 bodily injury and $200,000 property damage coverage. Construction contractors require minimum $25,000 surety bonds (residential work may require $5,000 to $10,000). | For-profit corporate officers are included in coverage but can elect exemption. Sole proprietors and partners are excluded but may opt in. General contractors must be licensed for work above $10,000. | |
Workers' Compensation, Commercial Auto, Contractor Bonds (Construction), Residential Recovery Fund | Workers' compensation is required for businesses with one or more employees following state minimum wage replacement and medical benefit schedules. Commercial auto policies must carry minimum liability limits of $25,000 per person for bodily injury, $50,000 per accident for bodily injury, and $15,000 for property damage. Licensed contractors require surety bonds ranging from $9,000 to $100,000 depending on project value, plus $200,000 Residential Recovery Fund contribution or bond. | Domestic workers are exempt from workers' compensation requirements. Employees may voluntarily reject workers' compensation coverage by providing written notice to the employer. Contractor licensing required for work above specific dollar thresholds. | |
Workers' Compensation, Commercial Auto | Workers' compensation coverage is mandatory for businesses with three or more employees at state-specified benefit rates. Commercial auto insurance must meet minimum liability requirements of $25,000 per person for bodily injury, $50,000 per accident for bodily injury, and $25,000 for property damage. | Corporate officers and LLC members are included in workers' compensation coverage but can elect exemption. Sole proprietors and partners are excluded but may choose inclusion. | |
Workers' Compensation, Commercial Auto, State Disability Insurance, Contractor Bonds (Construction) | Workers' compensation is required for businesses with one or more employees providing benefits according to state schedules. Commercial auto insurance minimum liability limits increased to $30,000 per person for bodily injury, $60,000 per accident for bodily injury, and $15,000 for property damage effective January 1, 2025. State Disability Insurance requires employer participation for businesses paying $100 or more in wages quarterly, funded through employee payroll deductions. Licensed contractors must maintain $25,000 surety bonds. Employer liability minimums are $100,000 per employee, $100,000 per occurrence, and $500,000 policy limit. | Roofers must carry workers' compensation even without employees. Corporate officers and directors must be covered unless the corporation is fully owned by the officers and directors. Auto limits will increase again in 2035 to $50,000/$100,000/$25,000. SDI provides up to 52 weeks of benefits at 60-70% wage replacement. | |
Workers' Compensation, Commercial Auto | Workers' compensation is mandatory for businesses with one or more employees at state benefit levels. Commercial auto insurance requires minimum liability coverage of $25,000 per person for bodily injury, $50,000 per accident for bodily injury, and $15,000 for property damage. | Corporate officers and LLC members who own at least 10% of the company can opt out of workers' compensation coverage. Some domestic and maintenance workers performing limited part-time work for homeowners may be excluded. | |
Workers' Compensation, Commercial Auto, Uninsured Motorist | Workers' compensation is required for businesses with one or more employees at state minimum benefit rates. Commercial auto policies must maintain minimum liability limits of $25,000 per person for bodily injury, $50,000 per accident for bodily injury, and $25,000 for property damage, plus mandatory uninsured and underinsured motorist coverage. | Partners are included in workers' compensation coverage but may exclude themselves. Corporate officers and LLC members are included but may exclude themselves. Vehicles carrying more than eight passengers require $1.5 million coverage, while those carrying 16 or more require $5 million. | |
Workers' Compensation, Commercial Auto, Personal Injury Protection | Workers' compensation coverage is mandatory for businesses with one or more employees following state benefit schedules. Commercial auto insurance requires minimum liability limits of $25,000 per person for bodily injury, $50,000 per accident for bodily injury, and $10,000 for property damage, plus mandatory personal injury protection coverage as a no-fault state. | Up to eight corporate officers or four LLC members may exclude themselves from workers' compensation. Immediate family members of sole proprietors/partners are included but may opt out. Failure to carry workers' comp may result in fines equal to three times the annual premium. | |
Workers' Compensation, Commercial Auto, General Liability (Construction) | Workers' compensation is required for businesses with four or more employees (one or more for construction, six or more for agriculture) at state benefit rates. Commercial auto insurance must meet state liability minimums. Licensed general contractors must carry minimum general liability coverage of $300,000 for bodily injury and $50,000 for property damage. | Different industry thresholds apply for workers' compensation requirements. Corporate officers and LLC members may exempt themselves from workers' compensation coverage. Construction businesses of all sizes require workers' compensation for every employee. Stop-work orders may be issued for non-compliance. | |
Workers' Compensation, Commercial Auto | Workers' compensation coverage is mandatory for businesses with three or more employees at state-specified benefit levels. Commercial auto insurance must meet minimum state liability requirements of $25,000 per person for bodily injury, $50,000 per accident for bodily injury, and $25,000 for property damage. | Up to five corporate officers may waive workers' compensation coverage on themselves. If the business is incorporated or an LLC, officers/members count toward the three-employee threshold regardless of exemption status. | |
Workers' Compensation, Commercial Auto, State Disability Insurance | Workers' compensation is required for businesses with one or more employees providing benefits per state wage replacement schedules. Commercial auto insurance must meet minimum liability limits of $20,000 per person for bodily injury, $40,000 per accident for bodily injury, and $10,000 for property damage. Temporary Disability Insurance is mandatory for employers, providing up to 26 weeks of benefits at 58% of average weekly wages up to $837 maximum weekly benefit (2025 rates). | Corporate officers who own at least 50% of the corporation are excluded from workers' compensation coverage but may opt in. LLC members are included in coverage unless pending legislation passes. TDI requires employees to have worked at least 14 weeks for 20+ hours and earned at least $400. | |
Workers' Compensation, Commercial Auto | Workers' compensation coverage is mandatory for businesses with one or more employees at state benefit rates. Commercial auto insurance must meet minimum liability requirements of $25,000 per person for bodily injury, $50,000 per accident for bodily injury, and $15,000 for property damage. | Sole proprietors, partners, corporate officers who own at least 10%, and LLC members are automatically excluded from workers' compensation but may opt for inclusion. | |
Workers' Compensation, Commercial Auto | Workers' compensation is required for businesses with one or more employees following state benefit schedules. Commercial auto insurance must meet minimum liability limits of $25,000 per person for bodily injury, $50,000 per accident for bodily injury, and $20,000 for property damage. Penalty for workers' comp non-compliance is $500 per day with minimum $10,000 fine. | Hazardous industries (construction, trucking, extra hazardous work) require workers' compensation coverage even for sole proprietors, corporate officers, or LLC members. Licensed real estate agents are not considered employees. Attorneys must report professional liability status biennially. | |
Workers' Compensation, Commercial Auto | Workers' compensation coverage is mandatory for businesses with one or more employees at state minimum benefit levels. Commercial auto insurance requires minimum liability coverage of $25,000 per person for bodily injury, $50,000 per accident for bodily injury, and $25,000 for property damage. | Licensed real estate agents are not considered employees. Independent contractors in construction must obtain annual certification with the Indiana Workers' Compensation Board for exemption. | |
Workers' Compensation, Commercial Auto | Workers' compensation is required for businesses with one or more employees providing state-mandated benefits. Commercial auto insurance must maintain minimum liability limits of $20,000 per person for bodily injury, $40,000 per accident for bodily injury, and $15,000 for property damage. | Up to four corporate officers may exclude themselves from workers' compensation by completing a rejection form. Contractors meeting certain requirements are not considered employees. | |
Workers' Compensation, Commercial Auto | Workers' compensation coverage is mandatory for businesses with one or more employees at state benefit rates. Commercial auto insurance requires minimum liability limits of $25,000 per person for bodily injury, $50,000 per accident for bodily injury, and $25,000 for property damage. | Corporate officers who own 10% or more of the business may elect exclusion from workers' compensation. Independent contractors with no employees may exempt themselves from coverage requirements. | |
Workers' Compensation, Commercial Auto | Workers' compensation is required for businesses with one or more employees following state wage replacement and medical benefit schedules. Commercial auto insurance must meet minimum liability requirements of $25,000 per person for bodily injury, $50,000 per accident for bodily injury, and $10,000 for property damage. | Out-of-state employers must provide Kentucky workers' compensation coverage for employees performing work in the state. Corporate officers may exempt themselves by filing a written rejection notice. | |
Workers' Compensation, Commercial Auto | Workers' compensation coverage is mandatory for businesses with one or more employees at state-determined benefit levels. Commercial auto insurance requires minimum liability limits of $15,000 per person for bodily injury, $30,000 per accident for bodily injury, and $25,000 for property damage. | LLC members who own 10% or more of the company may exclude themselves from workers' compensation. Licensed real estate agents are exempt from coverage requirements. | |
Workers' Compensation, Commercial Auto, Medical Payments | Workers' compensation is required for businesses with one or more employees providing state-mandated benefits. Commercial auto insurance must meet minimum liability limits plus medical payments coverage is required statewide as the only state mandating this coverage type. | Corporate officers who own 20% or more of outstanding voting stock may exclude themselves from workers' compensation coverage. Sole proprietors and partners are excluded but may include themselves. | |
Workers' Compensation, Commercial Auto | Workers' compensation coverage is mandatory for businesses with one or more employees at state benefit rates. Commercial auto insurance must meet minimum state liability requirements of $30,000 per person for bodily injury, $60,000 per accident for bodily injury, and $15,000 for property damage. | Some corporate officers and LLC members may exclude themselves from workers' compensation coverage. Sole proprietors and partners are automatically excluded and must elect inclusion. | |
Workers' Compensation, Commercial Auto | Workers' compensation is required for businesses with one or more employees following state benefit schedules. Commercial auto insurance must meet minimum liability limits of $20,000 per person for bodily injury, $40,000 per accident for bodily injury, and $5,000 for property damage. | Domestic employees working less than 16 hours per week are exempt from workers' compensation. Corporate officers who own at least 25% interest may request exemption from workers' compensation coverage. | |
Workers' Compensation, Commercial Auto | Workers' compensation coverage is mandatory for businesses with one or more employees (three or more for agricultural employers) at state benefit rates. Commercial auto insurance requires minimum liability limits of $20,000 per person for bodily injury, $40,000 per accident for bodily injury, and $10,000 for property damage. | Family members of sole proprietors (spouse, child, parent) may be excluded from workers' compensation. Corporate officers owning 10% or more stock can be excluded from coverage. | |
Workers' Compensation, Commercial Auto, Various Trade-Specific Bonds | Workers' compensation is required for businesses with one or more employees providing state-mandated benefits. Commercial auto insurance must meet minimum liability requirements of $30,000 per person for bodily injury, $60,000 per accident for bodily injury, and $10,000 for property damage. Various contractor bonds are required including electrical contractor bonds, plumbing/SSTS bonds, roofer bonds, and technology contractor bonds. | Sole proprietors and immediate family members can choose not to carry workers' compensation if there are no other employees. Partners and officers may exempt themselves if all employees are partners/officers or immediate family. | |
Workers' Compensation, Commercial Auto | Workers' compensation coverage is mandatory for businesses with five or more employees at state benefit levels. Commercial auto insurance requires minimum liability limits of $25,000 per person for bodily injury, $50,000 per accident for bodily injury, and $25,000 for property damage. | Corporate officers may exclude themselves from workers' compensation coverage. Employees owning 15% or more stock may exempt themselves from coverage requirements. | |
Workers' Compensation, Commercial Auto | Workers' compensation is required for businesses with five or more employees following state benefit schedules. Commercial auto insurance must meet minimum liability requirements of $25,000 per person for bodily injury, $50,000 per accident for bodily injury, and $10,000 for property damage. | Farm labor, domestic servants, occasional laborers, and qualified real estate agents are exempt from workers' compensation coverage. Railroad, postal, and maritime workers are covered under federal laws. | |
Workers' Compensation, Commercial Auto | Workers' compensation coverage is mandatory for most businesses with one or more employees at state benefit rates. Commercial auto insurance requires minimum liability limits of $25,000 per person for bodily injury, $50,000 per accident for bodily injury, and $20,000 for property damage. | Penalty for non-compliance is double the premium amount with a minimum fine of $200. Eligible family members receive death benefits not exceeding 66.67% of worker's average weekly wage plus $4,000 for funeral expenses. | |
Workers' Compensation, Commercial Auto, Errors & Omissions (Real Estate) | Workers' compensation is required for most businesses with one or more employees providing state-mandated benefits. Commercial auto insurance must meet minimum liability requirements of $25,000 per person for bodily injury, $50,000 per accident for bodily injury, and $25,000 for property damage. Real estate license applicants must provide proof of errors and omissions insurance as certified by the State Program Administrator. | Corporate officers who own 25% or more stock may exempt themselves from workers' compensation coverage. Sole proprietors, partners, and LLC members are excluded but may include themselves if actively involved full-time. | |
Workers' Compensation, Commercial Auto, Contractor Bonds (Construction) | Workers' compensation coverage is mandatory for businesses with one or more employees at state benefit rates. Commercial auto insurance requires minimum liability limits, and licensed contractors must maintain surety bonds ranging from $1,000 to $500,000 depending on license type and project scope. Additional Consumer Protection Bonds of $100,000 may be required for residential pool/spa contractors. | Sole proprietors licensed as contractors must obtain coverage. Corporate officers and LLC members are included in workers' compensation but may exclude themselves from coverage. Assembly Bill 39 (2023) increased bonding requirements for residential improvement projects. | |
Workers' Compensation | Workers' compensation is required for businesses with one or more employees providing state-mandated benefits. Commercial auto insurance is not required (similar to personal auto requirements where proof of financial responsibility is acceptable). | Only state not requiring commercial auto insurance. Up to three executive officers may exclude themselves from workers' compensation, but officers actively working construction sites cannot be exempt. | |
Workers' Compensation, Commercial Auto, State Disability Insurance | Workers' compensation coverage is mandatory for businesses with one or more employees at state benefit levels. Commercial auto insurance must meet minimum liability requirements of $15,000 per person for bodily injury, $30,000 per accident for bodily injury, and $5,000 for property damage. Temporary Disability Insurance is mandatory, providing up to 26 weeks of benefits at 85% of average weekly wages up to $1,081 maximum weekly benefit (2025 rates). Employees must have worked 20 weeks earning at least $303 weekly or earned $15,200 in base year. | Corporate officers must be covered under workers' compensation. Partners, LLC members, and sole proprietorship principals do not need workers' compensation coverage but may elect inclusion. TDI is funded through both employee and employer contributions. | |
Workers' Compensation, Commercial Auto | Workers' compensation is required for businesses with three or more employees following state benefit schedules. Commercial auto insurance must meet minimum liability limits of $25,000 per person for bodily injury, $50,000 per accident for bodily injury, and $10,000 for property damage. | Corporate officers and LLC members who own 10% or more may exclude themselves from workers' compensation. Licensed real estate salespersons are exempt from coverage requirements. | |
Workers' Compensation, Commercial Auto, State Disability Insurance | Workers' compensation coverage is mandatory for businesses with one or more employees at state-determined benefit rates. Commercial auto insurance requires the same minimum liability limits as personal auto insurance in the state. State Disability Insurance is mandatory for most employers, providing up to 26 weeks of benefits at 50% of average weekly wages up to $170 maximum weekly benefit. Criminal penalties for workers' comp violations range from $1,000 to $50,000 plus potential jail time. | Sole proprietors, partners, and one- to two-person corporations do not need workers' compensation coverage but may include themselves on a policy. SDI employee contributions are limited to 0.5% of wages or $0.60 per week maximum. | |
Workers' Compensation, Commercial Auto | Workers' compensation is required for businesses with three or more employees providing state-mandated benefits. Commercial auto insurance minimum liability limits increased to $50,000 per person for bodily injury, $100,000 per accident for bodily injury, and $50,000 for property damage effective July 1, 2025, giving the state the highest property damage requirement nationally. | Truck drivers must be covered under workers' compensation even if considered independent contractors. Agricultural employers need coverage only for 10 or more full-time, non-seasonal workers. Corporate officers may waive coverage but still count toward employee threshold. | |
Workers' Compensation, Commercial Auto | Workers' compensation is required for businesses with one or more employees through the monopolistic state fund system. Commercial auto insurance must meet minimum state liability requirements. | Monopolistic state fund means no private workers' compensation insurance marketplace exists. General contractors are responsible for securing subcontractor coverage until subcontractors obtain their own policies. | |
Workers' Compensation, Commercial Auto, Professional Liability (Attorneys - Disclosure) | Workers' compensation coverage is mandatory for businesses with one or more employees at state benefit rates. Commercial auto insurance requires minimum state liability limits. Attorneys must either carry malpractice insurance with $100,000 per claim and $300,000 aggregate limits or notify clients in writing of lack of coverage. | LLC workers' compensation requirements depend on whether the entity elects corporate, sole proprietor, or partnership treatment for tax purposes. Attorney professional liability disclosure requirement applies. | |
Workers' Compensation, Commercial Auto | Workers' compensation is required for businesses with one or more employees at state benefit levels, with exemption for "family five or fewer" arrangements. Commercial auto insurance must meet minimum liability requirements of $25,000 per person for bodily injury, $50,000 per accident for bodily injury, and $25,000 for property damage. | "Family five or fewer" exemption applies if business has up to five employees who are all immediate family members. Corporate officers and members owning 10% or more stock are excluded but may elect inclusion. | |
Workers' Compensation, Commercial Auto, Professional Liability (Attorneys - Mandatory) | Workers' compensation coverage is mandatory for every business with employees at state benefit rates. Commercial auto insurance requires minimum state liability limits. Attorneys are required to obtain professional liability insurance through the Oregon State Bar Professional Liability Fund - one of the few states with mandatory attorney malpractice coverage. General contractors performing work valued over $1,000 must be licensed and bonded with bonds ranging from $10,000 to $75,000. | Oregon has 30+ specific exemptions outlined in state law. Penalty for workers' comp non-compliance is twice the premium amount with minimum $1,000 fine, plus $250 per day for continued non-compliance. | |
Workers' Compensation, Commercial Auto, Professional Liability (Attorneys - Disclosure) | Workers' compensation is required for businesses with one or more employees providing state-mandated benefits. Commercial auto insurance must meet minimum liability requirements. Attorneys must either carry malpractice insurance with $100,000 per claim and $300,000 aggregate limits or notify clients in writing. Intentional workers' comp non-compliance is a felony punishable by up to $15,000 fine and seven years jail time. | Business may be exempt if all workers are executive officers, domestic workers, federal employees, sole proprietors, or general partners. Professional liability disclosure requirement applies to attorneys. | |
Workers' Compensation, Commercial Auto, State Disability Insurance, Errors & Omissions (Insurance Producers) | Workers' compensation coverage is mandatory for businesses with one or more employees at state benefit rates. Commercial auto insurance requires minimum liability limits. Insurance producers must carry errors and omissions insurance with $250,000 per occurrence and $500,000 aggregate limits. Temporary Disability Insurance provides up to 30 weeks of benefits at 4.62% of highest quarterly wages with maximum weekly benefit of $1,070 (2025 rates). Temporary Caregiver Insurance provides additional family leave benefits. | Licensed real estate professionals paid on commission-only basis are exempt from workers' compensation. Corporate officers and LLC members are included but may exclude themselves. Rhode Island was the first state to enact SDI (1942). TDI benefits are not subject to federal or state income taxes. | |
Workers' Compensation, Commercial Auto, Contractor Bonds (Varies by City) | Workers' compensation is required for businesses with four or more employees following state benefit schedules. Commercial auto insurance must meet minimum state liability requirements of $25,000 per person for bodily injury, $50,000 per accident for bodily injury, and $25,000 for property damage. General contractors performing work above $5,000 require licensing and bonding, with minimum $10,000 bonds required in most areas. | Subcontractors may be treated as employees under the general contractor's workers' compensation policy if they do not carry their own coverage. | |
Commercial Auto | Commercial auto insurance must meet minimum state liability requirements of $25,000 per person for bodily injury, $50,000 per accident for bodily injury, and $25,000 for property damage. | Only state with no workers' compensation requirement for any business. However, businesses may still choose to obtain coverage voluntarily. | |
Workers' Compensation, Commercial Auto | Workers' compensation coverage is mandatory for businesses with five or more employees at state benefit rates. Commercial auto insurance requires minimum liability limits of $25,000 per person for bodily injury, $50,000 per accident for bodily injury, and $15,000 for property damage. | Business owners must also have workers' compensation coverage on themselves unless they request an exemption through proper legal channels. | |
Commercial Auto, Workers' Compensation (Government Contractors), Contractor Bonds (Local Requirements) | Commercial auto insurance must meet minimum liability requirements of $30,000 per person for bodily injury, $60,000 per accident for bodily injury, and $25,000 for property damage. Workers' compensation is required for companies contracting with government entities and for public/educational employers. Local jurisdictions set contractor bonding requirements ranging from $5,000 to $25,000 depending on trade and location. | Workers' compensation is not required for most private employers. There is mandatory personal injury protection requirement, but drivers can avoid this by signing a waiver. Criminal penalty for non-compliance with workers' comp is up to $100,000 fine and one year jail time. | |
Workers' Compensation, Commercial Auto | Workers' compensation is required for businesses with one or more employees providing state-mandated benefits. Commercial auto insurance minimum liability limits increased to $30,000 per person for bodily injury, $65,000 per accident for bodily injury, and $25,000 for property damage effective January 1, 2025. | Agricultural workers, casual/domestic workers, and real estate/insurance brokers may not be counted toward employee requirements. Businesses with no employees may not require workers' compensation coverage. | |
Workers' Compensation, Commercial Auto | Workers' compensation coverage is mandatory for businesses with one or more employees at state benefit rates. Commercial auto insurance must meet minimum liability requirements of $25,000 per person for bodily injury, $50,000 per accident for bodily injury, and $10,000 for property damage. | Corporate officers and LLC members are included in workers' compensation coverage but have the option to exclude themselves from coverage requirements. | |
Workers' Compensation, Commercial Auto | Workers' compensation is required for businesses with three or more employees following state benefit schedules. Commercial auto insurance minimum liability limits increased to $50,000 per person for bodily injury, $100,000 per accident for bodily injury, and $25,000 for property damage effective January 1, 2025. | Executive officers may reject workers' compensation coverage but must give proper notice to the employer and the Virginia Workers' Compensation Commission. Auto insurance requirements recently increased from $30,000/$60,000/$20,000. Virginia eliminated the uninsured motorist fee option in July 2024. | |
Workers' Compensation, Commercial Auto, Professional Liability Reporting (Attorneys) | Workers' compensation is required for businesses with one or more employees through the monopolistic state fund system. Commercial auto insurance must meet minimum state liability requirements. Attorneys must annually report to the Washington State Bar whether they carry professional liability insurance, though coverage itself is not mandatory. | Monopolistic state fund system with elective coverage options for corporate officers and LLC members. Attorneys are not required to have malpractice insurance but must report coverage status annually to maintain good standing. | |
Workers' Compensation, Commercial Auto | Workers' compensation coverage is mandatory for businesses with one or more employees at state benefit rates. Commercial auto insurance requires minimum liability limits of $25,000 per person for bodily injury, $50,000 per accident for bodily injury, and $25,000 for property damage. | LLCs may exclude up to four managers, officers, or members from workers' compensation coverage. Corporate officers are included with the option to exclude themselves in some cases. | |
Workers' Compensation, Commercial Auto | Workers' compensation is required for businesses with three or more employees providing state-mandated benefits. Commercial auto insurance must meet minimum liability requirements of $25,000 per person for bodily injury, $50,000 per accident for bodily injury, and $10,000 for property damage. | Sole proprietors, partners, and LLC members are not considered employees and are excluded from workers' compensation coverage, but they may choose to include themselves in coverage. | |
Workers' Compensation, Commercial Auto | Workers' compensation coverage is mandatory for businesses with one or more employees through the monopolistic state fund system. Commercial auto insurance requires minimum state liability limits of $25,000 per person for bodily injury, $50,000 per accident for bodily injury, and $20,000 for property damage. | Monopolistic state fund system ensures coverage for all employers regardless of risk level. Corporate officers and LLC members are excluded from workers' compensation but have the option to include themselves. | |
*State insurance requirements change frequently and vary by business type. This information is for general guidance only. Verify current requirements with your state's insurance department or licensed agent.
Business Insurance Requirements by Industry
Business insurance requirements vary by industry due to unique risks and regulatory environments. For example, construction companies need higher liability coverage due to workplace hazards and potential property damage, while healthcare providers require malpractice insurance to protect against patient care claims. Industries with greater public safety concerns, environmental risks, or regulatory oversight typically face more stringent insurance mandates from government agencies and licensing boards.
Below, we have summarized business insurance requirements by general industry to help you understand what may be required for your company:
Healthcare & Medical | Medical Malpractice Insurance, Professional Liability, Workers' Compensation | Medical malpractice insurance typically requires coverage between $1 million and $3 million per occurrence, while workers' compensation must meet individual state minimum requirements. | Medical professionals must carry malpractice insurance as required by state licensing boards and healthcare facilities. Workers' compensation is mandatory for all employees in healthcare settings. |
Legal & Professional Services | Professional Liability, Errors & Omissions, Workers' Compensation | Professional liability coverage requires minimum amounts ranging from $300,000 to $1 million depending on the state, and workers' compensation must meet state minimum requirements. | Oregon and Idaho mandate professional liability coverage for attorneys, while other states require disclosure if not carried. Workers' compensation is required for all employees. |
Construction | General Liability, Workers' Compensation, Commercial Auto Insurance | General liability insurance requires coverage between $1 million and $2 million per occurrence, workers' compensation must meet state minimums, and commercial auto coverage must meet state minimums plus additional federal requirements for interstate operations. | General liability insurance is required for licensing and bonding purposes. Workers' compensation is mandatory even for contractors with no employees in some states. Commercial auto coverage is required for all company vehicles. |
Transportation & Logistics | Commercial Auto Liability, Workers' Compensation | Commercial auto liability requires a minimum of $750,000 for non-hazardous materials transport, between $1 million and $5 million for hazardous materials depending on the specific substances, and workers' compensation must meet state minimum requirements. | Federal Motor Carrier Safety Administration (FMCSA) sets minimum coverage requirements for interstate operations. Hazardous materials transport requires significantly higher coverage limits. Workers' compensation is mandatory for all employees. |
Technology & IT Services | Professional Liability, Errors & Omissions, Cyber Liability, Workers' Compensation | Professional liability and errors & omissions coverage typically ranges from $1 million to $2 million, cyber liability coverage typically ranges from $1 million to $5 million, and workers' compensation must meet state minimum requirements. | Professional liability and cyber liability coverage are increasingly required by client contracts rather than legal mandate. Workers' compensation is required for all employees. Industry standard coverage reflects high-value client relationships and data security risks. |
Manufacturing & Industrial | Workers' Compensation, Product Liability, Environmental Liability | Workers' compensation must meet state minimum requirements, product liability insurance typically ranges from $1 million to $10 million depending on the products manufactured, and environmental liability coverage varies based on specific manufacturing operations. | Workers' compensation is required for all employees. Product liability insurance is industry standard for consumer-facing products. Environmental liability may be required by EPA regulations for certain manufacturing operations. |
Retail & Hospitality | Workers' Compensation, General Liability, Liquor Liability | Workers' compensation must meet state minimum requirements, general liability insurance typically ranges from $1 million to $2 million, and liquor liability coverage amounts vary by individual state regulations. | Workers' compensation is mandatory for all employees. General liability insurance is industry standard for customer-facing businesses. Liquor liability is required for establishments serving alcohol as part of licensing requirements. |
Financial Services | Professional Liability, Errors & Omissions, Workers' Compensation | Professional liability and errors & omissions coverage typically requires a minimum of $1 million, and workers' compensation must meet state minimum requirements. | SEC and FINRA regulations require professional liability coverage for investment firms. Workers' compensation is mandatory for all employees. Coverage amounts reflect regulatory requirements and high-value client relationships. |
Agriculture & Farming | Workers' Compensation, Commercial Auto Insurance | Workers' compensation requirements are exempt in some states while others require state minimum coverage, and commercial auto insurance must meet individual state minimum requirements. | Workers' compensation requirements vary significantly by state and employee count, with many states providing exemptions for agricultural operations. Commercial auto insurance is required for business vehicles used in farming operations. |
Education | Workers' Compensation, Professional Liability | Workers' compensation must meet state minimum requirements, and professional liability coverage amounts vary based on the specific educational institution and accreditation requirements. | Workers' compensation is required for all employees. Professional liability insurance is required by accreditation bodies for higher education institutions and may be mandated for certain educational professionals. |
Energy & Utilities | Workers' Compensation, Commercial Auto Insurance | Workers' compensation must meet state minimum requirements, and commercial auto insurance requires a minimum of $1 million for operations involving hazardous material transport. | Workers' compensation is required for all employees. Commercial auto insurance must meet federal requirements for hazardous material transport operations, with higher coverage limits than standard commercial vehicles. |
Government Contractors | Professional Liability, Workers' Compensation | Professional liability coverage amounts are determined by Federal Acquisition Regulations and specific contract requirements, while workers' compensation must meet state minimum requirements. | Professional liability insurance is required by Federal Acquisition Regulations and specific contract terms. Workers' compensation is mandatory for all employees working on government contracts. |
Non-Profit Organizations | Workers' Compensation | Workers' compensation coverage must meet individual state minimum requirements. | Workers' compensation is required for all employees, though some states provide limited exemptions for certain religious organizations. Coverage requirements are generally the same as for-profit businesses despite tax-exempt status. |
Business Insurance Requirements By Type of Financing
Financing requirements vary by industry based on capital needs, cash flow patterns, and risk levels. Manufacturing requires heavy upfront investment while service businesses need less, and lenders view stable industries like utilities as lower risk than volatile ones like hospitality.
To give you a general idea of what you may be required to have for loans and leases, we've broken down common business insurance requirements by financing type:
SBA Loans | General liability insurance, Property insurance, Key person life insurance | Coverage must provide one to two million dollars per occurrence. Coverage must equal the full replacement cost of all collateral. Coverage amount should equal the loan amount or business valuation. | General liability insurance is required for most SBA loans and may need an umbrella policy for larger loans. Property insurance must cover all financed equipment and real estate with the lender named as loss payee. Key person life insurance is required if the business depends heavily on a key individual. |
Bank Term Loans | General liability insurance, Property insurance, Workers' compensation insurance | Coverage must provide one to two million dollars per occurrence. Coverage must equal the loan-to-value ratio. Coverage must meet state-required minimums. | General liability insurance is a standard requirement with higher amounts required for larger loans. Property insurance must cover financed assets with the lender named as additional insured and loss payee. Workers' compensation insurance is required in most states if the business has employees. |
Equipment Financing | Property insurance, General liability insurance | Coverage must equal the full financed equipment value. Coverage must provide a minimum of one million dollars. | Property insurance must cover the specific financed equipment and gap coverage is often required. General liability insurance protects the lender's interest in the equipment. |
Commercial Real Estate Loans | Property insurance, General liability insurance, Umbrella policy | Coverage must equal the full replacement cost. Coverage must provide one to five million dollars per occurrence. Coverage must provide one to ten million dollars. | Property insurance must include the building and improvements with the lender named as mortgagee. General liability insurance requires higher amounts for larger properties or those with public access. An umbrella policy is often required for properties valued over one million dollars. |
Lines of Credit | General liability insurance, Property insurance | Coverage must provide one to two million dollars per occurrence. Coverage amount varies based on collateral. | General liability insurance may be required depending on the credit line amount. Property insurance is required if assets are used as collateral. |
Asset-Based Lending | Property insurance, General liability insurance | Coverage must equal one hundred percent of collateral value. Coverage must provide one to three million dollars per occurrence. | Property insurance must cover all pledged assets with the lender named as loss payee. General liability insurance amounts vary by industry and loan size. |
Merchant Cash Advances | General liability insurance, Business interruption insurance | Coverage must provide a minimum of one million dollars. Coverage must equal six to twelve months of revenue. | General liability insurance requirements are less stringent than traditional financing. Business interruption insurance may be required to protect cash flow. |
Invoice Factoring | General liability insurance, Professional liability insurance | Coverage must provide one to two million dollars per occurrence. Coverage must provide one to five million dollars. | General liability insurance protects the factor's interest in receivables. Professional liability insurance is required for service-based businesses. |
Construction Loans | General liability insurance, Builder's risk insurance, Workers' compensation insurance, Umbrella policy | Coverage must provide two to five million dollars per occurrence. Coverage must equal the full project value. Coverage must meet state minimums plus contractor requirements. Coverage must provide five to ten million dollars. | General liability insurance amounts are higher due to construction risks. Builder's risk insurance covers work in progress and materials. Workers' compensation insurance must include all subcontractors. An umbrella policy is standard for larger construction projects. |
Venture Capital/Private Equity | Directors and officers insurance, General liability insurance, Key person life insurance, Cyber liability insurance | Coverage must provide one to ten million dollars. Coverage must provide two to five million dollars per occurrence. Coverage amount should equal five to ten times annual salary. Coverage must provide one to five million dollars. | Directors and officers insurance protects board members and executives. General liability insurance requires higher coverage due to growth expectations. Key person life insurance protects the investor's interests. Cyber liability insurance is increasingly required for technology companies. |
Government Contracts | General liability insurance, Professional liability insurance, Performance and payment bonds, Cyber liability insurance | Coverage must provide one to ten million dollars per occurrence. Coverage must provide one to five million dollars. Bond amount must equal one hundred percent of contract value. Coverage must provide one to ten million dollars. | General liability insurance requirements vary significantly by contract size and type. Professional liability insurance is required for professional services contracts. Performance and payment bonds guarantee contract completion and payment to subcontractors. Cyber liability insurance is required for contracts involving sensitive data. |
How Much Business Insurance Do You Need?
Most businesses need some form of general liability, commercial property, professional liability, workers comp and commercial auto insurance. If you're involved with commercial operations on the internet, cyber liability insurance is also a necessity. For each coverage type mentioned, we've listed the recommended amount of coverage:
- General Liability Insurance: $1-2 million per occurrence, $2-3 million aggregate
- Workers Comp Insurance: As required by state law
- Professional Liability Insurance: $1-2 million per claim
- Commercial Property Insurance: Full replacement cost of property, equipment, and inventory
- Commercial Auto Insurance: $1 million combined single limit (CSL) minimum
- Cyber Liability Insurance: $1-5 million depending on data exposure
Business Insurance Coverage Recommendations by Industry
While we've given you recommendations for coverage types and amounts above, they are not personalized to your industry. Your company has unique risks depending on its size and industry which affect what coverage is best for you.
So below, we've given you some recommendations for business insurance by general industry for more personalized advice:
General liability insurance, product liability insurance, workers' compensation insurance, commercial property insurance. | General liability coverage should range from $2-5 million per occurrence based on company size and risk exposure. Product liability requires $1-5 million minimum with higher limits for companies producing consumer goods or industrial equipment. Property insurance should equal 100% replacement cost plus business interruption coverage for 12-24 months of operating expenses. Workers' compensation coverage is based on payroll and risk classification as mandated by state requirements. | Equipment breakdown insurance protects against machinery failures and should cover repair costs plus business interruption. Cyber liability insurance is increasingly important with $1-5 million recommended for companies with digital operations. Environmental liability coverage is crucial for manufacturers handling hazardous materials. Supply chain interruption insurance helps protect against vendor failures. | |
General liability insurance with completed operations coverage, workers' compensation insurance, commercial auto insurance, professional liability insurance. | General liability should provide $2-10 million per occurrence with higher limits for large commercial projects or public works. Auto liability requires minimum $1 million combined single limit but $2-5 million is recommended for companies with multiple vehicles. Umbrella coverage of $5-25 million provides additional protection above underlying policies. Property insurance should cover tools, equipment, and materials at full replacement value. Workers' compensation rates vary significantly by trade classification as required by state law. | Builders risk insurance protects projects under construction and should equal total project value. Surety bonds are often required for public projects, with amounts matching contract values. Employment practices liability protects against discrimination and harassment claims, with $1-3 million recommended. Pollution liability covers environmental cleanup costs, which can be substantial for excavation and demolition work. | |
Healthcare | Professional liability insurance (medical malpractice), general liability insurance, cyber liability insurance, workers' compensation insurance. | Professional liability limits vary by specialty with surgeons requiring $1-5 million per claim while general practitioners may need $1-3 million. Cyber liability should provide $1-5 million minimum with higher limits for large practices or hospitals handling extensive patient data. General liability of $1-2 million per occurrence covers slip and fall incidents and other premises claims. Workers' compensation covers employee injuries with rates based on job classifications and claims history. | Employment practices liability protects against discrimination and wrongful termination claims, with $1-3 million recommended coverage. Business interruption insurance helps cover lost income during facility closures or system outages. Directors and officers liability is important for medical practices organized as corporations, with $1-5 million typical coverage. Kidnap and ransom insurance may be considered for high-profile medical professionals. |
Professional liability insurance (errors and omissions), cyber liability insurance, general liability insurance, workers' compensation insurance. | Professional liability should equal the largest potential client loss with $1-10 million per claim typical for software companies and consultants. Cyber liability requires robust coverage with $5-50 million limits depending on data sensitivity and business model. Media liability coverage of $1-5 million protects against content-related claims for companies publishing digital content or managing social media. General liability provides $1-2 million for basic premises and advertising liability coverage. Workers' compensation covers employee injuries, though rates are typically lower for office-based technology work. | Directors and officers liability protects company leadership, with $1-10 million coverage recommended for venture-backed or public technology companies. Employment practices liability covers discrimination and harassment claims, with $1-5 million typical for growing tech firms. Intellectual property liability insurance protects against patent infringement claims, which can be costly in the technology sector. International coverage may be necessary for companies with global operations, or a remote workforce. | |
General liability insurance, product liability insurance, commercial property insurance, workers' compensation insurance. | General liability of $1-2 million per occurrence provides adequate protection for most retail establishments with higher limits for large stores or high-traffic locations. Product liability requires $1-5 million minimum with higher coverage for retailers selling potentially dangerous products. Property coverage should equal full replacement cost of inventory plus seasonal fluctuations and peak stock periods. Workers' compensation covers employee injuries with rates varying by retail sector and claims experience. | Business interruption insurance covers lost income during closures, with 12-24 months of coverage recommended. Cyber liability protects customer payment data with $1-5 million minimum for retailers processing credit cards. Crime insurance covers theft of money, securities, and inventory, with limits based on typical cash on hand and inventory values. Supply chain disruption insurance helps protect against vendor delivery failures during peak seasons. | |
Professional Services | Professional liability insurance (errors and omissions), general liability insurance, cyber liability insurance, workers' compensation insurance. | Professional liability limits should reflect potential client losses with attorneys and consultants often requiring $1-10 million per claim while smaller service providers may need $1-3 million. Cyber liability requires $1-10 million depending on data handled with financial services and legal firms needing higher limits. Employment practices liability of $1-5 million protects against workplace discrimination and harassment claims. General liability insurance provides $1-2 million per occurrence for premises liability and incidental exposures. Workers' compensation covers employee injuries, though rates are typically moderate for office-based professional work. | Directors and officers liability protects firm leadership, with $1-5 million typical for professional service firms organized as corporations. Fiduciary liability covers employee benefit plan administration, with $1-3 million recommended for firms managing retirement plans. Media liability protects against advertising and content claims, with $1-2 million coverage for firms with significant marketing presence. International professional liability may be required for firms serving global clients. |
General liability insurance, product liability insurance, workers' compensation insurance, commercial property insurance, liquor liability insurance (if applicable). | General liability should provide $1-5 million per occurrence with restaurants and large food service operations requiring higher limits due to foodborne illness exposure. Liquor liability insurance requires $1-2 million minimum for establishments serving alcohol, with some requiring higher limits based on sales volume. Property insurance should cover specialized kitchen equipment and food inventory at replacement cost plus spoilage coverage. Workers' compensation is mandatory, with higher rates due to kitchen hazards and frequent employee injuries. Product liability insurance specifically covers food contamination and poisoning, with $1-5 million minimum coverage. | Business interruption insurance is critical for restaurants, with 12-24 months coverage recommended due to lengthy reopening timelines after kitchen fires or equipment failures. Employment practices liability protects against discrimination claims in an industry with high employee turnover. Cyber liability covers payment processing and customer data with $1-2 million minimum. Spoilage coverage protects against food loss from equipment breakdown or power outages. | |
Commercial auto liability insurance, cargo insurance, general liability insurance, workers' compensation insurance. | Auto liability should provide $1-5 million combined single limit depending on cargo values and routes served with interstate carriers often requiring higher limits. Cargo coverage should equal typical shipment values with many companies carrying $100,000-500,000 per occurrence. Physical damage coverage protects company vehicles and trailers at actual cash value or agreed value for newer equipment. General liability provides $1-2 million for premises and non-auto related claims. Workers' compensation covers driver and warehouse employee injuries with rates based on job classifications and safety records. | Motor truck cargo legal liability covers shipper goods when carrier is legally liable, with coverage typically matching cargo insurance limits. Environmental liability protects against fuel spills and hazardous material accidents. Non-trucking liability covers vehicles used for personal purposes when not under dispatch. Occupational accident insurance may supplement or replace workers' compensation for independent contractors. | |
How To Find The Business Insurance Coverage You Need
Buying business insurance that is right for you is a difficult process and requires a lot of research and understanding of your company's risk. So below, we've simplified the process down to five simple steps to help you find the best business insurance for you.
- 1
Assess Your Business's Risk Profile
When determining your business's risk profile, evaluate financial stability (cash flow, debt levels, revenue concentration), operational vulnerabilities (supply chain, key personnel, technology), and external factors (market competition, regulatory changes, economic sensitivity). Assess both the probability and potential impact of each risk while considering how risks might interconnect and amplify each other.
- 2
Identify What Coverages Are Needed
To determine required business coverages, first identify mandatory insurance based on your industry, location, and employee count. Consult your state's department of insurance website and a licensed commercial insurance agent for mandatory coverage requirements specific to your company. Using your risk profile as a guide, also look into optional coverages you may need.
- 3
Determine Coverage Amounts You Need
To determine appropriate coverage amounts, calculate the maximum potential financial loss from each risk scenario (considering your total assets, annual revenue, largest contracts, and worst-case liability exposure). Then factor in your risk tolerance, available cash reserves, and any contractual or lender requirements for minimum coverage limits.
To help you through this process we detailed some ways to figure out amounts that apply to different coverage types
- Asset Replacement Value: Calculate full replacement cost for property, equipment, and inventory to determine your commercial property, equipment, tools, and inventory insurance limits.
- Annual Revenue + Operating Expenses: Use 6-12 months of revenue and fixed costs for business interruption and extra expense coverage calculations.
- Net Worth + Future Earnings: Coverage should protect total business value and projected income through general liability, professional liability and product liability insurance.
- Largest Contract/Client Value: Base limits on biggest potential claim or contract size when determining professional liability and product liability coverage amount decisions.
- Data Breach Cost Analysis: Calculate potential notification, credit monitoring, and regulatory costs per record. This will help you determine cyber liability limits that work for you.
- Key Person Revenue Impact: Coverage equal to 5-10x annual salary or revenue they generate. This applies to key person insurance and disability insurance.
- 4
Shop Around and Compare
Once you determine your coverage needs, we recommend comparing business insurance companies and quotes online and through independent agents. Look into customer reviews, specific coverage options, and reference similar businesses in your area to get a comprehensive look.
- 5
Reassess Annually
As your business needs change, you should also reassess your needs for insurance as well. All policies are typically for a year, so when you're around a month before your existing policy expires, we recommend repeating this process.
Small Business Insurance Coverage: Bottom Line
Your state probably requires some basic coverage like workers' compensation and commercial auto insurance, and that's your starting point. But meeting the minimum requirements won't protect you from the real financial hits your business could face.
The key is matching your coverage to the risks you face every day. Add specialized policies where needed, and you'll have the financial security to keep your business running when problems arise.
Insurance Coverage for Small Business: FAQ
Have questions about business insurance? We've got answers to the most common ones:
What is business insurance coverage?
Business insurance helps pay for unexpected costs when things go wrong. Whether it's an accident at your business, a lawsuit, property damage or having to shut down temporarily, insurance covers the bills so you don't have to.
Most small businesses get a business owner's policy, or BOP, which bundles general liability, commercial property and business interruption coverage into one package. It's an efficient way to get broad protection without buying separate policies.
What types of business insurance coverage do I need?
Your needs depend on industry, business size and operations. All businesses need general liability insurance. If you have employees, workers' compensation is required in most states. Businesses with vehicles need commercial auto coverage, while those handling customer data should consider cyber liability protection.
How much does business insurance coverage cost?
Costs vary based on industry, business size, location and coverage limits. Higher-risk industries like construction cost more than consulting firms. Factors affecting your premiums include claims history, employee count, annual revenue and the specific coverage limits you choose for financial protection.
Is business insurance coverage required by law?
Yes, several types are mandatory. Almost every state requires workers' compensation for businesses with employees. Commercial auto insurance is necessary, except in New Hampshire and Virginia, if you own vehicles. Professionals like real estate agents and lawyers need professional liability to maintain their licenses.
What's the difference between professional liability insurance and general liability?
General liability covers property damage, third-party bodily injury, personal injury claims and legal defense costs. Professional liability is essential for consultants, architects and other professionals giving advice because it covers professional mistakes, errors, omissions and failure to deliver services.
Do I need cyber liability insurance?
Yes, especially if you handle customer data or use computers regularly. It covers data breaches, ransomware attacks, notification costs and legal fees. Professional services, health care, retail and food service businesses face significant cyber risks. Even small businesses are increasingly targeted by hackers.
What is a business owner's policy (BOP)?
A BOP combines general liability, commercial property and business interruption insurance into one affordable package. Most small businesses start with a BOP because it's more cost-effective than separate policies. You can add specialized coverage like cyber liability or professional liability as needed.
What business insurance coverage do restaurants need?
Restaurants need general liability for customer slip-and-fall accidents, product liability for foodborne illness claims and commercial property for kitchen equipment protection. Liquor liability is essential if you serve alcohol. Business interruption covers lost income during closures from equipment failures.
What coverage do construction companies need?
Construction companies face higher risks and need comprehensive coverage. General liability protects against property damage, professional liability covers design errors, workers' compensation handles job site injuries and commercial auto covers company vehicles. Tools and equipment coverage protects valuable machinery from theft.
How much general liability insurance do small businesses need?
Most small businesses start with $1 million general liability limits. This amount covers typical claims and meets most client contract requirements. High-risk businesses like construction need higher limits than consulting firms. Many commercial leases and client contracts require $1 million minimum coverage.
What states don't require workers' compensation insurance?
Almost every state requires workers' compensation for businesses with employees. Some states, like Georgia, only require it for three or more employees, while others have different thresholds. Each state sets its own rules, so check with your state's insurance department for specific requirements.
Can I use my personal auto insurance for business vehicles?
No, personal auto policies specifically exclude business vehicle use. You must carry commercial auto insurance except in New Hampshire and Virginia if your business owns vehicles. Commercial auto covers vehicle damage, bodily injury, and property damage from business-related accidents that personal policies won't cover.
About Mark Fitzpatrick
Mark Fitzpatrick, a Licensed Property and Casualty Insurance Producer, is MoneyGeek's resident Personal Finance Expert. With over five years of experience analyzing the insurance market, he conducts original research and creates tailored content for all types of buyers. His insights have been featured in publications like CNBC, NBC News and Mashable.
Fitzpatrick holds a master’s degree in economics and international relations from Johns Hopkins University and a bachelor’s degree from Boston College. He's also a five-time Jeopardy champion!
Passionate about economics and insurance, he aims to promote transparency in financial topics and empower others to make confident money decisions.