Small Business Insurance FAQs

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small business owners feeling happy that they know the answers to Small Business Insurance FAQsSmall business insurance helps protect your company's property and income, while safeguarding you against liability claims. Below you will find answers to common questions that small business owners have about their small business insurance coverage.

Get Started FAQs

Do you need business insurance? We hear this question often, and the answer is not always simple. The types of small business insurance you need will be unique to your business and where you’re located.
Many customers ask, “What is small business insurance?” We’re here to help you understand. Small business insurance, sometimes called commercial insurance, helps protect your business against costly claims, like bodily injury or property damage. It can help protect your business’ employees, equipment and income, too.
Are you a business owner wondering how to get small business insurance? You can find the right business insurance coverage for your company the same day with The Hartford. You can start by gathering your business information like your sales, payroll size, assets, tools and equipment, number of employees and your location. Next, you can get a quote online and one of our specialists can help you determine the right amount of coverage for you.
If you’ve asked yourself, “Do I need insurance for my small business?” The answer is yes. Small business insurance can help protect your business’ assets and employees. Without business insurance, your company may have to pay out of pocket to repair or replace destroyed or damaged property. Business insurance can also help protect your business against liability claims and lawsuits. These types of expenses could be financially devastating for a small business if you don’t have insurance protection.  
Some states have laws that make business insurance required if you own a business. For example, Florida requires businesses to have workers’ compensation insurance if you have any employees. If you don’t meet the insurance requirements of your state, you may face fines and penalties. Even if your state doesn’t require business insurance, it’s still a good idea to protect your company from fires, theft, bodily injuries, lawsuits and liability claims.
As a business owner, allowing your employees to work from home comes with a number of perks, like increased productivity and lower office expenses. But like any business, you’re still vulnerable to liabilities of employees working from home. You’ll need business insurance even if you work from home because your homeowner’s insurance policy doesn’t provide protection for your business. Be sure to check out our remote work guide to learn more about setting up a work from home business.
It’s important to make sure your company meets the business tax deadlines every year. Each year small business owners should review their small business insurance policy and determine the deadline for filing your tax return. Keep in mind that multimember LLCs, S corporations and partnerships often have an earlier filing date than other types of small businesses. If you’re a new business or startup, check out our small business startup checklist to make sure you’re prepared.
Most states have some level of small business insurance requirements. For example, most states require businesses with employees to have workers’ compensation insurance. Some states may also require you to have commercial auto insurance if you or your employees use any vehicles for work reasons. Other types of business insurance, like a Póliza para propietarios de empresas, aren’t required but provide extra protection against costly claims. Be sure to check with your local laws to determine what’s required for your business.
Un hold harmless agreement is a clause in a legal contract that releases one party from liabilities such as damage, bodily injury or financial loss. Business owners, especially those in high risk industries, should consider a póliza de seguro para pequeñas empresas that includes a hold harmless agreement to protect their business and any additional insureds from lawsuits. In some cases, these agreements can help prevent a third party from suing you or involving your business in expensive litigation.
Un tortfeasor is a person or entity that commits a wrongful act that causes another individual or business to suffer a personal or financial loss. When a tortfeasor is held legally liable, they’ll need to reimburse the impacted party for any damages. Small business insurance can help cover the costs if you find yourself to be in a tortfeasor. 
Actual cash value (ACV) is a way to determine the value of your business property that needs to be repaired or replaced after a covered damage occurs. Insurance companies calculate ACV by subtracting the depreciation from an item’s replacement cost value. ACV is an important part of understanding how certain coverages, like commercial property insurance, work.

Types of Small Business Insurance FAQs

At minimum, you should start with these types of small business insurance:
Other types of optional coverages are available to add on to your small business insurance policy, like professional liability insurance, data breach coverage and business income insurance. To learn more about the right types of coverages for your business, call our specialists at 855-829-1683 o obtener una cotización en línea.
LLC insurance helps protect limited liability companies (LLCs) from different liability claims, like bodily injury or property damage caused by your business, employees or products. Although being registered as an LLC helps separate your business assets from your personal assets, it doesn’t protect your business from the various risks it faces. Depending on the industry you’re in, you may need LLC insurance. 
Small business startup insurance can help protect your company against liability claims and lawsuits that could come up during your normal business day. Your startup will likely need multiple types of business insurance. Keep in mind that some industries face higher risks than others and might need more additional types of coverage.
Business hazard insurance, also known as business property insurance, is a type of small business insurance that helps protect your company’s owned or rented building. It also helps protect the tools and equipment you use to run your company.
Sole proprietorship insurance can help cover liability claims against your business. This coverage can help financially protect your business if:
  • A customer injures themselves at your business
  • A customer or competitor sues your business
  • A data breach causes your customer data to be exposed
  • Physical damages to your business’ building cause a loss of income
Business renters insurance helps protect your rented property, plus your employees and operations. If your business rents property, you’ll still want to have the right type of business insurance to help protect you from risks. A Business Owner’s Policy (BOP) includes commercial property insurance, which provides commercial renters insurance coverage. 
Hired and Non-Owned Auto Coverage (HNOA) is a type of small business insurance that can help cover property damage or bodily injury that your business caused to someone else in an auto accident. Whether your company rents, leases or borrows a car for business purposes, you’ll need protection against risks on the road. HNOA includes two types of coverage:
  • Hired coverage means your business has coverage when you or employees drive a rented, leased or borrowed car for business.
  • Non-owned auto applies to employees using their own cars for business. It provides extra coverage over the employee’s personal auto coverage for bodily injury and property damage liability.
Many business owners ask us, “What does compensation mean?” We know it can be a complicated topic, but we’re here to help. It means you’ve rewarded someone for their work or that you’re making up for someone’s loss by giving them benefits. For employees of your business, this means they’re receiving payment for their contribution to your company.
Business insurance for entrepreneurs can help protect your operations, property and employees from risks. Entrepreneurs can benefit from having certain coverages, like general liability insurance and commercial property insurance. If you or your employees use vehicles for business reasons, you may be required by state law to have commercial auto insurance. And if you have any employees, you’ll likely need workers’ compensation insurance too.
An insurance rider offers changes to a basic insurance coverage. Insurance riders are also known as endorsements on an insurance policy. It helps policyholders create a more customized coverage to meet their specific needs. They can also let you increase your coverage limits on a small business insurance policy.
Equipment breakdown coverage is a type of small business insurance coverage. It can help pay for damages to your business’ property and equipment if there’s an unexpected breakdown. This coverage is included in commercial property insurance, which you can get as a standalone policy or through a Póliza para propietarios de empresas (BOP). 
Curious about the difference between admitted vs. non-admitted insurance carriers? The key difference is that if an insurance company is admitted, it means they’ve met the regulations set by the state Department of Insurance (DOI) in the areas they work. In comparison, non-admitted insurance carriers have not met their state’s requirements. 
Business insurance for S corps, also known as a pass-through entity, helps protect your company from various risks like lawsuits, fire damage, theft and lost income from a covered property damage. While the S corp limits the business owner and shareholders’ liability, your business still faces risks from normal operations. Some states may require S corps to have certain types of insurance, so be sure to check with your local laws. 
Amazon liability insurance helps protect sellers and Pro Merchants from costly accidents. For example, it can help your business if someone sues your company after a product they purchased on Amazon malfunctions and causes damage to their property. Without Amazon liability insurance, you’d have to pay out of pocket to cover costly claims or lawsuits.
Etsy business insurance is available for small businesses who sell their goods or services on Etsy. You are not required to have insurance to sell or operate on Etsy, but it’s recommended to help protect you and your business from product liability claims. Before you start selling on Etsy, be sure to check with your state’s legal requirements. Depending on the state you’re in, you may need a business license to sell on Etsy.
Shopify business insurance is insurance protection for online retailers selling on Shopify. While it’s not required to have business insurance for your Shopify business, it is recommended as an extra layer of protection. Business insurance can help cover costly claims filed against you for bodily injury and property damage. For example, if your products damage your customer’s home, your product liability insurance policy can help pay replacement costs for the damages.
Walmart liability insurance helps protect your small business from costly claims and legal expenses. If your business is a supplier that sells goods in the United States through Walmart, you’ll need business insurance to safeguard your operations.  Businesses that sell their products at Walmart stores or online must have these types of Walmart insurance coverages:

Cost, Liabilities and Risks

Our customers paid an average of about $1,019 annually for a Business Owner’s Policy (BOP).** Keep in mind that there’s many different factors that can affect your small business insurance cost. Your price can vary depending on your business’ size, industry and location. You may be able to save money on small business insurance costs by bundling multiple policies too.
Liability insurance for small businesses helps cover claims of bodily injury, property damage and financial loss due to an error or omission in the services provided. Small business liability insurance includes several different types of coverage to consider when protecting your business. Some states may have laws requiring you to have certain types of business insurance, such as workers’ compensation or commercial auto insurance.
We make it easy to get liability insurance for small businesses. Just follow these four steps:
  1. Assess your business to determine the risks your company faces. This can include potential customer injuries or property damage to another person’s belongings.
  2. Reciba una cotización to find out the cost of coverage for your business.
  3. Contact us so our specialists can work with you to make sure you get the coverage you need.
  4. Review your existing policy each year, because a lot can change with your business in that time. For example, if you expanded, you may need to increase your coverage.
El documento best liability insurance for small business is going to be unique to each business. You’ll want to find insurance coverage that provides protection against the different risks that can come up during your normal business operations. With The Hartford, you can customize your policy to create the best liability insurance coverage for your business’ needs. Obtenga una small business insurance quote today to learn more about our liability coverages.
Cold, ice and snow can pose small business risks to your owned or rented business property. Cold weather can cause significant property damage and can be costly to repair if you don’t have small business insurance. Winter conditions also can cause increased liability risks. For example, a customer or delivery person could slip and fall on a slippery walkway and sue your business for their medical expenses.
Risk avoidance means that you are avoiding doing certain actions to help protect your small business. While we know that it’s impossible to eliminate all risk for your small business, a risk avoidance strategy can help avoid liability exposures. You can implement risk avoidance measures through:
Commercial water damage is one of the most frequent and expensive claims that small businesses face. If you notice commercial water damage or an issue that can lead to property loss, it’s important to take immediate action with these four steps:
  1. Identify the source of water damage.
  2. If necessary, shut off the water main. 
  3. Immediately contact your insurance company.
  4. Find a restoration team.
Products-completed operations coverage helps cover liability claims resulting from your business’ product or completed operations that were done away from your location. This coverage can help pay for claims that your business caused bodily injury or property damage. 
Vicarious liability is the legal responsibility for another person’s mistake. Small business owners can be held financially responsible for the negligence of their employees, agents or independent contractors. Vicarious liability insurance is a type of small business insurance that protects you and your business from lawsuits related to mistakes made by someone employed by your business. 
Business continuity planning (BCP) can help your business prepare for and respond to disasters like a fire, flood or data breach. When creating a business continuity plan, having small business insurance can help protect your business and livelihood. With a business continuity plan, you can help restore your company’s operations faster after an unexpected disaster.
Slips, trips and falls are one of the most common types of liability claims that business owners face. The best way to avoid the financial implications of a slip and fall at your business is to have small business insurance. Other ways to help prevent slips, trips and falls at your business include:
  • Making sure your walkways and walking areas are not slippery and clear of debris.
  • Using technology to reduce risks, such as motion detectors or signage above doors.
  • Creating a prevention and management strategy that addresses checking parking lots, staircases, walkways and lobby areas for risks.
Business risk refers to anything that could financially impact your small business. Small business insurance can help safeguard your business from risks. Without the right types of insurance coverage, your business would have to pay out of pocket for costly claims. Some of the most common types of business risk are:
  • Fire damage
  • Inundaciones
  • Natural disasters
  • Robo
  • Economic downturn
  • Loss of important suppliers
Bonds and small business insurance are two ways to help you manage risk and protect against financial losses. In business, bonds are sometimes required for a variety of situations. In some industries, clients may require surety bonds before they agree to work with your business. Surety bonds help protect the client because it guarantees that your business will honestly and faithfully perform its duties and comply with the law. If there’s an issue with the work, the client can file a claim with the surety to cover the costs required to fix the problem. If this occurs, the surety will require your business to provide reimbursement.
LLC business insurance costs often will vary. On average, our customers paid about $85 a month for a Business Owner’s Policy (BOP), which is a common type of LLC insurance.**
Data protection rules are designed to protect consumers and their personal information. If your business experiences a data breach and personal information is lost or stolen, cyber insurance can help your business respond. This coverage can also help cover the cost of notifying your customers, legal fees, lawsuits and public relations costs to protect your business’ reputation.

Grants and Other Small Business Considerations

Small business grants are typically a specified amount of money that certain groups offer to help small business owners achieve their goals. Keep in mind that grants are different from small business loans. The key difference is that you don’t have to pay back grant money and you don’t have to put up any collateral. Business grants can come from the federal government or private companies.
Having business insurance is one of the best ways to protect your small business from unexpected losses. With the right types of insurance coverage, you’ll be financially protected if someone files a lawsuit against you, whether they’re claiming personal injury or property damage.
If you’re analyzing a small business insurance policy, you may be wondering, “What is a lienholder?” A lienholder is a financial institution that holds a loan until it’s paid in full. For example, if you have a car loan for your business vehicles, the lienholder is included on your car insurance policy. After the auto loan is paid, the lienholder gets removed from your policy because you or your business own the car.
Un surety bond guarantees that your small business will perform the agreed-upon services. These bonds financially guarantee that your customer will be paid if they don’t receive services.

Get a Small Business Insurance Quote

Somos una compañía de seguros con más de 200 años de experiencia. We’ve helped over 1.5 million small business owners find the coverage they need. We make it easy for you to get a fast and free online quote for small business insurance. The Hartford has been recognized as the top small business insurer with the best digital capabilities for customers.1
To find out how we can help protect your business, get a small business insurance quote  hoy mismo.
Última actualización: 14 de mayo de 2024
** Premium amounts presented are based on monthly premium paid by The Hartford’s Small Business customers between 1/1/22 and 9/14/23 for 12-month policies. Premium is derived from a number of factors specific to your business and may vary.
1 Based on a 2023 study by Keynova.
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