Business Insurance Coverage

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Business insurance can help pay the costs of property damage, lawsuits, lost business income and other covered losses. To help protect against specific risks unique to their situation, businesses often buy multiple coverages and combine several in one policy. A Business Owner's Policy (BOP), for example, combines property, general liability and business income coverage into one convenient policy.
 

What Is Business Insurance and Why Is It Needed?

Business insurance, also known as commercial insurance, helps protect business owners from unexpected losses. With the right types of insurance, you won’t have to pay out-of-pocket for costly damages or legal claims against your business. In some states, it may be required for companies to have specific types of business insurance.
 

What Does Business Insurance Cover?

Business insurance helps protect your business’ financial assets against risks and unexpected accidents that can occur during normal business operations. Typically, businesses get multiple types of coverages to ensure they’re fully prepared for unexpected losses. Business insurance can cover several different risks associated with your business operations, including:
 
  • Employees: If an employee is injured on the job, workers’ compensation insurance can help cover their medical expenses and lost income while they recover.
  • Property: Commercial property insurance helps protect your business’ owned or rented buildings, tools or equipment you use for business if they’re damaged or destroyed in a covered loss.
  • Commercial vehicles: If you or your employees use vehicles for business reasons, commercial auto insurance can help cover the cost of an auto accident that happens on the job – regardless of who is at fault.
  • Customers and clients: If a customer slips and falls in your business and files a lawsuit against your business, general liability insurance can help pay for their medical expenses.

What Isn’t Covered by Business Insurance?

Losses from certain types of natural disasters, floods and other major weather events may not be covered by standard commercial property insurance policies. The same applies for any customer property stored at your business. Things like intentional and fraudulent acts are not covered by standard professional liability policies. Standard general liability polices do not cover auto accidents – you would need commercial auto coverage for that.
 
Standard types of business insurance policies don’t cover everything, but it is possible to add coverage riders to standard policies to help cover additional risks.
 

Essential Business Insurance Coverage Options

What Does Business Insurance Cover?One of the most popular business policies is a Business Owner’s Policy (BOP). A BOP generally includes business property, general liability and business income coverages in one policy. Combining these coverages isn’t only convenient, it can also help you  save money on business insurance.
 
Insurance helps protect you from having to pay the full cost of bodily injury or property damage claims that happen against your business. For example, a customer may make a claim against your business if he is injured in your store. General liability can help cover you against the costs of the claim and even help pay for defense costs. It also helps protect your business from the costs of errors in your advertising.
Business income insurance helps replace lost income if you close temporarily due to a covered loss, like theft or property damage from a fire. It can also help you continue paying expenses while your property is replaced or repaired.
Professional liability insurance helps cover costs related to claims that your business made errors in the services you’ve provided. For example, if you make a clerical error and it causes a client to lose thousands of dollars, professional liability insurance can help cover the costs if the client makes a claim. A business doesn’t need to do anything wrong to be sued. Depending on the scenario, coverage would apply to defend a business if sued.
Workers' compensation insurance helps cover costs to employees while they are unable to work after suffering a work-related injury or illness. Workers’ comp from The Hartford also provides programs to help employees prepare to return to work after their absence. And, if a worker's family decides to sue your business, workers’ comp can also help cover the legal fees.
A commercial auto policy helps protect your business from the costs of a work-related auto accident. If you or an employee is in an accident while driving for business reasons, commercial auto can help cover the costs that results from the accident.
Data breach insurance helps protect your business from the costs of cyber threats or attacks. Cyber coverage from The Hartford can help cover your costs to mitigate the damage of the breach and any communications needed to notify people affected and manage your company’s reputation. Our data breach insurance policy even includes access to services that teach you best practices that help prevent breaches from happening.
Commercial umbrella insurance acts as a safety net that provides additional coverage when other liability policies reach their limits. For example, say a customer slips and injures himself in your store. He then makes a claim against your business for $200,000. If your general liability policy has a limit of $150,000, commercial umbrella insurance would help cover the remaining $50,000. Businesses find this coverage is essential for helping protect against financially devastating lawsuits and claims.
Commercial flood insurance helps protect your business from the costs of covered flood damage. This includes damage to the physical location of your business as well as its assets. For example, say melting snow floods the basement of your business. The floodwater damages the floor and some tools. If this happens, commercial flood can help cover the cost to repair the damaged floor and tools.
Employment practices liability (EPL) helps protect your business if an employee sues you. Even if you are not at fault, defending a lawsuit can be costly. Employees may make a claim against your business for reasons such as discrimination, harassment or wrongful termination. If they do, EPL can help cover the related costs.
Home-based business insurance helps cover the costs of property and liability risks to businesses that operate out of a business owner’s home. If you keep supplies, equipment or other business property at your home or have customers stopping by, consider adding this coverage.
 

How Much Does Business Insurance Cost?

On average, small business owners paid about $1,019 a year or $85 per month for business insurance with The Hartford.1 Keep in mind that the cost of business insurance will vary because each business is different and faces their own unique risks. What you pay for insurance will often depend on different factors, like:
 
  • The type of insurance you need
  • Your claims history
  • What industry you’re in
  • The number of employees you have
  • Your payroll

Compare Different Business Insurance Coverages

Interested in learning more about the different types of business insurance policies and what they cover? Check out our guides comparing common coverages that many businesses need.
 
Learn more about how to get business insurance or get a quote today for your business.
 
The Hartford can help you get answers to more business insurance frequently asked questions.

Business Insurance Coverage FAQs

Business insurance is designed to protect the business you’ve worked so hard to build. It helps protect against costly claims made against your business, like accusations for bodily injury or property damage made to someone else. Business insurance also helps protect your business’ employees, equipment, property and income.
The purpose of business insurance is to financially protect your business from costly claims that could make you shut down. Business insurance helps protect your company’s operations and owned or rented property from covered losses.
Small business insurance is vital for protecting your company and everything you’ve worked so hard to build. Without the right types of business insurance, you’d have to pay out of pocket to cover claims. Some of the most common types of business insurance that business owners start with is a Business Owner’s Policy (BOP) because it combines three essential types of insurance: business property insurance, general liability insurance and business income insurance.
 
Be sure to check with your local laws to find out what coverages you’re required to have. For example, you may be required to have commercial auto insurance to protect your business’ vehicles and anyone who drives them for work reasons. And if you have any employees, you will need workers’ compensation insurance to keep them protected on the job.
A limited liability corporation (LLC) is a type of business structure that combines the characteristics of a corporation with a partnership or sole proprietorship. This means that the personal assets of the members in the LLC are protected from liabilities. Meanwhile, liability insurance is a type of business insurance designed to protect your business financially if your company is sued or held responsible for property damage or personal injury to a third party.
You’ll need business insurance to protect your company from unexpected risks that can come up during your day-to-day operations. Depending on the incident, some claims can be financially devastating to a business if you don’t have insurance to help. In some states, you may be required to carry certain types of business insurance, so be sure to check with your local laws to find out what you need.
Business insurance can’t prevent you from being sued, but it can help pay your defense costs and legal fees if your business is sued.
Last Updated: March 12, 2024
 
1 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.
 
Additional disclosures below.
6 Types of Insurance Your Business Needs Now
6 Types of Insurance Your Business Needs Now
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  • Basic definitions of the essential business insurance coverages.
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The Hartford shall not be liable for any damages in connection with the use of any information provided on this page. Please consult with your insurance agent/broker or insurance company to determine specific coverage needs as this information is intended to be educational in nature.
 
The information contained on this page should not be construed as specific legal, HR, financial, or insurance advice and is not a guarantee of coverage. In the event of a loss or claim, coverage determinations will be subject to the policy language, and any potential claim payment will be determined following a claim investigation.
 
Certain coverages vary by state and may not be available to all businesses. All Hartford coverages and services described on this page may be offered by one or more of the property and casualty insurance company subsidiaries of The Hartford Financial Services Group, Inc. listed in the Legal Notice.
 
The Hartford Financial Services Group, Inc., (NYSE: HIG) operates through its subsidiaries under the brand name, The Hartford, and is headquartered in Hartford, CT. For additional details, please read The Hartford’s Legal Notice.
 
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