General liability, professional liability, workers comp, commercial auto — the full picture in plain English.
Insurance is one of those things most small business owners deal with reactively — after something goes wrong. Here's a plain-English breakdown of every major business insurance type, so you can decide what you actually need before that happens.
The baseline. Covers injury or property damage claims from customers, clients, or third parties. If someone slips in your salon or you accidentally break a client's property on a job, this is what pays. Most businesses need this.
Also called errors and omissions insurance. Covers claims that your professional advice, service, or work caused financial harm to a client. Essential for consultants, accountants, lawyers, designers, and anyone who charges for expertise. General liability won't cover this.
Covers medical expenses and lost wages for employees injured on the job. Legally required in almost every US state the moment you hire your first employee. Fines for non-compliance are significant.
Covers your business equipment, tools, inventory, and physical space if they're damaged or stolen. If you work from home, your homeowner's policy almost certainly does not cover business property.
If you drive your vehicle for business purposes — visiting clients, transporting equipment, making deliveries — your personal auto insurance won't cover accidents that happen during that work. You need a commercial auto policy.
A bundle of general liability and commercial property insurance sold together at a discount. Often the most cost-efficient starting point for small businesses with a physical location.
Covers costs related to data breaches, ransomware, and cyber attacks. Increasingly relevant for any business that stores customer data. Often overlooked until it's too late.
At minimum: general liability. If you have employees: add workers' comp. If you give advice for a living: add professional liability. If you own equipment or a space: add commercial property. Build from there based on your specific risk profile.