Business Insurance FAQs

We’re here to help explain a common question we hear often: “What is business insurance?” Business insurance can help financially protect your business’ assets, employees and physical property from unexpected risks.

If you’re wondering how to get business insurance, our specialists can help you find the right types of coverage for your business’ unique needs. The best way to get started is to get a quote online or call us at 855-487-0783.

Are you a small business owner wondering “why do I need business insurance?” Well, you need business insurance because it’s an extra layer of financial protection if something unexpected happens. For example, if a fire starts at your bakery or a customer sues your accounting firm for services you provided, business insurance can help cover these costly claims. Want to learn more? Check out these 10 reasons you need business insurance today.

Business insurance covers the costs of property damage, lawsuits, lost business income and other covered losses. Many business owners start with a Business Owner’s Policy (BOP) because it combines three essential coverages: general liability insurance, commercial property insurance and business income insurance. Keep in mind that each business faces unique risks, so some industries may need additional types of coverage.

When starting a business, it’s essential to have business insurance to protect everything you’ve worked hard to create. Many people wonder, “when should I get business insurance?” There isn’t a specific best time to get insurance, but the sooner the better. In fact, most states will require you to have some types of business insurance to get started. You can also add coverage when you:

 

There are many benefits of insurance to your business. The most important benefit of insurance is knowing that your investments into your company are protected. Business insurance helps minimize financial losses because it protects business owners from having to pay out-of-pocket for costly liability and property damage claims. It can also help cover lawsuits against your business if you’re sued by a customer or employee.

While equally important, it’s key to know the difference between general liability insurance and workers’ compensation insurance. If your business has any employees, you’ll benefit from having both essential coverages. General liability insurance is a type of business insurance that helps protect businesses from claims that it caused property damage to someone’s belongings or bodily injuries to a customer visiting your business. 

 

Meanwhile, workers’ compensation insurance provides benefits to your employees to help cover medical expenses if they’re injured or become ill on the job. Workers’ comp helps pay for employee medical bills, partial replacement of lost wages, and provides disability and death benefits. Many states have laws that require you to have workers’ compensation insurance, so be sure to check with your local laws.

 

It’s important to know the difference between general liability and errors & omissions insurance when getting business insurance. While they’re similar because they both protect your business from liabilities, there’s some key differences to know. Errors and omissions insurance, also known as professional liability insurance, helps protect your business from financial loss if you or your employee make a mistake in the professional services you provide or fail to provide a service. General liability insurance helps protect your business from covered claims that your business caused bodily injury or property damage to a third-party. It also helps protect you from claims of advertising injury.

Although general liability insurance is available as a standalone policy, many business owners get it by purchasing a Business Owner’s Policy (BOP). There’s a key difference between a business owner’s policy and general liability insurance to know. The BOP combines three essential types of insurance, including general liability insurance, commercial property insurance and business income insurance. General liability insurance only provides coverage for property damage and bodily injuries that your business might’ve caused to a third party. Since GLI doesn’t cover damage to your business’ property, many business owners opt for the BOP because it includes more types of coverage.

A certificate of insurance (COI) is a document that your insurance company will provide you to show your proof of having business insurance. This document is typically about one page long and provides a summary of business insurance coverage that your business has.

There’s no difference between professional liability insurance and errors & omissions insurance, they’re referring to the same coverage. Errors & omissions insurance is just another name for professional liability insurance. You’ll still get the same coverage, despite the different names that insurers might use.

Tail coverage is included in your business insurance coverage if it’s written on a claims-made form. This coverage protects your business for claims that are reported after your insurance policy ends. Some carriers may refer to this coverage as the “extended reporting period.”

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An ACORD certificate of insurance is a document summarizing the key information about your business insurance policy. You may also hear it referred to as an ACORD 25 certificate of insurance, certificate of insurance (COI) or a certificate of liability insurance.

While there’s many different types of insurance available, here are the most common types of business insurance that small business owners get to protect them from various risks:

 

Before you open the doors to your business, you’ll need business insurance to be financially protected from covered losses caused by risks like theft, property damage and lawsuits. Our specialists at The Hartford can help you decide on what types of business insurance you’ll need based on your business’ unique needs. Get a quote online or give us a call at 855-487-0783.

Getting business insurance online is easy with The Hartford. You can get a quote online in just a few minutes. With our fast and free online quoting tool, you can view quotes, compare insurance rates and learn about coverages online.

Yes, business insurance for online businesses can help protect your business from unexpected risks. If you operate your online business from a location that you own or rent, it’s a good idea to have business insurance to protect your company’s property and equipment. If your online business stores any digital property or physical property, such as customer data or inventory, business insurance can help protect that too.

To determine the right coverages for you, start by asking yourself, “What business insurance should I have?” Without the right amount of business insurance, your business would be responsible for paying for damages, lawsuits and medical bills out of pocket. Most small businesses start with a Business Owner’s Policy (BOP) because it combines business property and business liability insurance into one convenient policy. In addition to the BOP, you may want to consider these additional coverages:

 

Business property insurance, also known as commercial property insurance, helps protect your owned or rented building, equipment and personal property at your business. It helps repair or replace your building, tools and equipment from claims including fire damage, theft or lost income if you can’t operate because of a covered property damage.

When the unexpected happens, you’ll need business interruption insurance, also known as business income insurance. If you have a Business Owner’s Policy from The Hartford, this coverage is already included into your policy. Business income insurance can help replace income you lose if you can’t open temporarily after a covered loss, like property damage. It can help replace your income and covers your operating expenses like rent and loan payments, taxes and payroll.

Business car insurance, also known as commercial auto insurance, helps protect you and your employees on the road while driving a company vehicle for business reasons. If you get into a car accident, this coverage can help cover costs for property damage and medical expenses associated with it. This coverage is also needed if your employees drive their own vehicles for business purposes.

There are distinct differences between claims-made and occurrence policies that you should know. Insurance companies commonly write policies on a claims-made form. This means your insurer helps cover claims filed during your policy period. A claims-made policy will include a retroactive date and an extended reporting period. While an occurrence policy provides coverage for incidents that happen only during your policy period, regardless of when you file a claim. These policies can be more expensive than a claims-made policy because of how long coverage applies.

Liquor liability insurance is a type of business insurance that helps protect businesses that sell, serve or distribute alcohol. It can help cover claims of bodily injury or property damage that an intoxicated customer causes after your company served them alcohol. This can be purchased as a standalone policy or added on as an endorsement to your general liability insurance coverage.

A special event insurance policy can help cover financial losses if an accident, illness or problem occurs with a vendor and prevents your event from happening. It can also help protect you if you’re held responsible for an accident at your business’ event that results in a bodily injury or property damage. This type of insurance typically is a combination of special event liability insurance and event cancellation insurance but will ultimately depend on the coverage options you choose.

Business liability insurance, also known as general liability insurance, protects your small business if you’re sued for bodily injury, property damage or other type of loss during normal business operations.

On average, the cost of small business insurance is about $85 per month and $1,019 per year.1 Keep in mind that the cost of business insurance will vary because every business has their own unique needs. What you’ll pay often depends on different factors, including:
 

If you’re looking to calculate your business income for insurance, we’re here to help. To start your calculation follow these steps:
 

The equation for business income is: Business income = revenue - expenses

Generally, yes, your business insurance is tax deductible. For example, if you’re operating a for-profit company, your business expenses, including insurance, can be deducted from your taxable income if it’s both ordinary and necessary. To learn more about business tax deductions, you can work with a tax professional. They can help answer any financial questions that pop up.