Business Insurance FAQs

A common question we hear often: “What is business insurance?” Business insurance can help financially protect your business’ assets, employees and physical property from everyday risks.

Small business insurance helps protect your business against risks that can come up during normal operations, like bodily injury or property damage. Different types of coverage can help protect your employees, equipment and income, too.

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. Check out the top 10 reasons you need business insurance today.

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 Business Owner’s Policy, 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.

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.

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:

 

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.

Different types of business insurance can help protect against various risks, such as:

 

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 insurance to create more well-rounded coverage.

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:

 

At minimum, you should start with these types of small business insurance:

 

• General liability insurance
• Commercial auto insurance
• Workers’ compensation insurance
• Business property 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 or get a quote 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.

Business insurance works by helping protect your company from financial losses due to unexpected events like property damage, lawsuits, or employee injuries. You pay a premium, and if a covered incident occurs, your insurer helps cover the costs, allowing your small business to recover and continue operating smoothly.

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 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.

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.

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.

You can find the right business insurance coverage for your company with The Hartford. 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 your small business.

Yes, you can buy business insurance online from The Hartford. With our fast quoting tool, you can view quotes, compare insurance rates and learn about coverages online. Get a quote today for free.

On average, the cost of small business insurance is about $141 per month and $1,687 per year for a Business Owner’s Policy.** 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:

 

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.

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

There’s no one-size-fits-all approach to business insurance coverage because every small business owner faces unique risks. Choosing the right insurance coverage for your business means understanding the challenges you face. You can work with an agent or one of The Hartford’s specialists to make sure you get the insurance coverage you need. 

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.

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.

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.

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.

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.”

Business income insurance is another name for business interruption insurance. It helps replace your lost income if you can’t temporarily operate because of covered property damage.

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.

Liability insurance helps protect your small business from claims it caused bodily injury or property damage to someone else.

Liability insurance helps cover claims of bodily injury or property damage to others. For example, if  a customer slips and falls in your storefront, liability insurance can help pay their medical bills.

We make it easy to get liability insurance for small businesses. Just follow these four steps:

 

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.

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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.