Best Small Business Insurance Companies

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One of the most confusing classes of insurance is business insurance, especially for a small businesses. It’s not that business insurance itself is necessarily more complicated than the various types of personal insurance. This article focuses on the best small business insurance companies.

best choice

Embroker logo
  • Get insured in 15 minutes
  • Lowest prices
  • Customized policies

BEST FOR SELF-EMPLOYED

Hiscox logo
  • Affordable coverage
  • Best for home-based business
  • Available in all 50 states

BEST COMPARISON SITE

CoverHound logo
  • Compare rates for Free
  • Instant quotes
  • Excellent customer experience

Small business insurance tends to be much more customized.

That’s because exactly what type of coverage you should get, how much you’ll need, and what you’ll pay in premiums will vary by both the type and size of business that you have.

If you’re a small business owner – or even an upstart – we’ve prepared this list of what we believe to be the best small business insurance companies and comparison sites.

It’s been designed with the assumption that you have little or no knowledge of small business insurance.

The purpose of having more than one provider is to give you plenty of options.

That’s important, because the many intricacies of small business insurance can result in a wide range in premiums charged.

The best strategy is to get quotes from several, making sure that you have the right type of coverage and in the appropriate amount – at the most affordable cost.

How We Picked the Best Small Business Insurance Companies

We’ve used five criteria in coming up with what we believe to be the best small business insurance companies and comparison sites:

BEST FOR CATEGORY

Most insurance companies have one or two areas where they are particularly strong. This was a major factor in determining which companies to include on our list. Put another way, there is no one best small business insurance company for all small businesses. It’s more important to find the one that will work best for you. 

BUSINESS COVERAGES OFFERED

There’s no single type of business insurance. Instead, “business insurance” is a general term that applies to dozens of different policies. Because each business may need different types of coverage, we’ve listed those offered by each provider in this guide.

OTHER INSURANCE POLICIES OFFERED

It can often be an advantage to have personal insurance policies held with the same company that provides your business insurance. First, there may be a bundling discount for having multiple policies with the same company. And second, you may prefer having a single source for both business and personal coverage, mostly as a matter of convenience and fast access to information.

AVAILABILITY

We included only providers that are available in all 50 states. However, in the case of online small business insurance marketplaces, not all participating insurance companies will be available in all states.

A.M. BEST FINANCIAL STRENGTH RATING

Where available, we’ve included the insurance company rating, and we’re happy to report all came in at excellent or superior. A.M. Best is the recognized leader in providing financial strength ratings for the entire insurance industry. Financial strength is important, because it indicates the company’s ability to operate as a going concern and to pay claims if necessary.

You‘ll notice that virtually all providers included operate entirely online.

That’s not a coincidence. The insurance industry is rapidly moving toward and all-online format. 

This is not only faster and easier for consumers and small businesses, but it also enables the insurance companies to charge lower premiums, due to the reduced need for internal personnel.

Quick Summary of Our Picks

The table below summarizes the main features of each of the seven best business insurance companies and comparison sites.

It’s laid out in order of the companies reviewed below, so you can skip down to a company that interests you based on what you see in the table.

Company

Best For

Business Coverages Offered

Other Insurance Policies Offered

Availability

A.M. Best Financial Strength Rating

Upstart Businesses

Startup specific insurance, management liability, business owner’s policy, commercial crime, cyber liability, directors and officers, employment practices liability, health and employee benefits, key person insurance, professional liability, legal professional liability, workers comp, commercial property, product liability, and commercial auto coverage

No personal insurance offered – business policies only

Nationwide

Not rated

Affordable Coverage for Home-Based Businesses

General liability, professional liability (errors and omissions), cyber security, short-term liability, worker’s comp, umbrella, auto, directors and officers, workers comp, and employment practices liability

No personal insurance offered – business policies only

All 50 states, plus the District of Columbia

“A” Excellent

Business and Personal  Insurance Marketplace

Business owner’s policy (BOP), general liability, professional liability, worker’s compensation, commercial auto, directors and officers, and cyber insurance

Life, auto, motorcycle, homeowner’s, renter’s and umbrella insurance

All 50 states plus the District of Columbia

Online insurance marketplace, not rated

Business Insurance Marketplace

General liability, worker’s comp, BOP, commercial property, professional liability, commercial auto, umbrella, errors and omissions, directors and officers, employment practices liability, fiduciary liability, cyber liability, product liability medical malpractice, health insurance, hired and non-owned auto, disability, crime, surety and fidelity bonds, and employee benefits liability

No personal insurance offered – business policies only

All 50 states plus the District of Columbia

Online insurance marketplace, not rated

The Hartford

Business Owner’s Policy (BOP)

Professional liability insurance, workers compensation, data breach coverage, commercial auto insurance, and employee benefits plans

Homeowner’s, renter’s, auto umbrella insurance

All 50 states, plus the District of Columbia

“A” Excellent

Next Insurance

Low Cost Coverage

General liability, professional liability, commercial auto, errors and omissions and worker’s compensation

No personal insurance offered – business policies only

All 50 states, plus the District of Columbia

“A+” Superior

Founder Shield

Tech Start-ups

Crime insurance, cyber insurance, directors and officers, employment practices liability, errors and omissions, general liability, health insurance and employee benefits, hired and non-owned auto insurance, intellectual property, key person, management liability, product liability, representations and warranties, umbrella,  workers comp an d VCAP coverage

No personal insurance offered – business policies only

Nationwide

Not rated

7 Best Small Business Insurance Companies Reviewed

In our list we’ve included five direct small business insurance providers, and two comparison sites.

And since there are so many, and it’s impossible to declare any one company to be the best or even the right choice for most consumers and businesses, we’ve instead focused on what each company or comparison site is best for.

If you fit in that best-for category for an insurance company or comparison site, it will most likely be the best source for you to purchase your small business insurance.

Best for Upstart Businesses: Embroker

Embroker icon

Embroker uses something of a different business model. They work with several leading business insurance carriers to provide the best protection and value for your business.

The company claims startups, lawyers, and other industries can save an average of 20% on your premiums because of those proprietary insurance products.

The company particularly favors tech startups, including those funded by venture capital.

But they also provide coverage for businesses engaged in real estate, construction, manufacturing, wholesale and retail, restaurants, storage, most professional service providers, and non-profits, including religious organizations, voluntary health organizations, grant-making foundations, museums, theaters and other companies.

Business Coverages Offered: Startup specific insurance, management liability, business owner’s policy, commercial crime, cyber liability, directors and officers, employment practices liability, health and employee benefits, key person insurance, professional liability, legal professional liability, worker’s comp, commercial property, product liability, and commercial auto coverage.

Other Insurance Policies Offered: No personal insurance offered – business policies only

Availability: Nationwide

A.M. Best Financial Strength Rating: Not rated

Best for Home Based Businesses: Hiscox

Hiscox icon

Hiscox is not as well-known as some of the other business insurance providers on this list, mainly because they don’t provide personal insurance.

Instead, they concentrate entirely on small business insurance. 

But the company has been in business since 1901 and is providing small business insurance to more than 300,000 customers in over 180 professions.

They advertise that you can get a policy in as little as 20 seconds. And apparently claims are filed and paid almost as fast.

Hiscox’s business owner’s policy (BOP) is an enhanced policy that combines general liability coverage and property insurance.

It’s recommended for businesses that not only need general liability coverage – which virtually every business does – but also has business equipment, owns a building, hold large amounts of data, or has employees who could potentially act dishonestly or even steal client property.

This type of policy will be valuable for a growing number of businesses today.

Business Coverages Offered: General liability, professional liability (errors and omissions), cyber security, short-term liability, worker’s comp, umbrella, auto, directors and officers, worker’s comp, and employment practices liability

Other Insurance Policies Offered: No personal insurance offered – business policies only

Availability: All 50 states and the District of Columbia 

A.M. Best Financial Strength Rating: “A” Excellent

Best for Business Insurance Marketplace: CoverWallet

Coverwallet icon

Like CoverHound, CoverWallet is another online business insurance marketplace.

And though it’s only been in business since 2015, it also has been A+ rating by the Better Business Bureau. 

They also offer personal advisors to help you navigate the process, and you’ll have a choice to access them by either phone, email, or chat.

The main difference from CoverHound is that CoverWallet doesn’t offer personal insurance policies. 

On the business insurance side, you can get virtually every type of business coverage for virtually any type of business.

Businesses covered include startups, restaurants, truckers, janitors, contractors, retail stores, non-profits, accountants, beauty salons, consultants, healthcare and more.

Business Coverages Offered: General liability, worker’s comp, BOP, commercial property, professional liability, commercial auto, umbrella, errors and omissions, directors and officers, employment practices liability, fiduciary liability, cyber liability, product liability medical malpractice, health insurance, hired and non-owned auto, disability, crime, surety and fidelity bonds, and employee benefits liability.

They also offer more unusual types of coverage, including inland marine, ocean marine, special events, liquor liability, business interruption, equipment breakdown, garage liability, and pollution liability.

Other Insurance Policies Offered: No personal insurance offered – business policies only

Availability: All 50 states plus the District of Columbia

A.M. Best Financial Strength Rating: Online insurance marketplace, not rated

Best for Personal Insurance Marketplace: CoverHound

Coverhound icon

Based in San Francisco CoverHound began operations in 2010, and has already garnered an A+ rating from the Better Business Bureau, the highest rating on a scale of A+ to F.

In the decades since they began, the platform has already sold more than 200,000 policies.

It’s an online business insurance marketplace, offering you an opportunity to compare policy quotes from multiple providers. 

There are no fees charged by CoverHound to use the platform. They also have licensed insurance advisors available to help you navigate the platform and provide answers to general questions.

One of the major advantages offered by CoverHound – apart from the obvious benefit of the potential to get lower-cost coverage due to competition by multiple providers – is that you can also purchase personal insurance policies on the site.

That includes life, auto, homeowner’s, renter’s, motorcycle, and umbrella insurance.

There’s no guarantee you’ll get personal insurance for the same company that provides your business insurance. 

But the fact that you can use the same platform for both eliminates an additional shopping expedition.

Business Coverages Offered: Business owner’s policy (BOP), general liability, professional liability, worker’s compensation, commercial auto, directors and officers, and cyber insurance

Other Insurance Policies Offered: Life, auto, motorcycle, homeowner’s, renter’s and umbrella insurance

Availability: All 50 states plus the District of Columbia

A.M. Best Financial Strength Rating: Online insurance marketplace, not rated

Best for Business Owner’s Policy: The Hartford

The Hartford icon

The Hartford is a well-established, full service insurance company, providing all types of coverage.

That’s important, because you may want to have personal policies included with your business coverage.

The company was founded in 1810, making it one of the most stable insurance companies in the country.

The Hartford is our top choice for a business owner’s policy (BOP), which combines three different types of coverage – commercial property insurance, general liability, and business income insurance.

Business Coverages Offered: Professional liability insurance, worker’s compensation, data breach coverage, commercial auto insurance.

The company also offers employee benefits, including group life and accident coverage, group disability, voluntary benefits, group retirees health coverage, and absence management, which helps optimize time money and productivity for employers by coordinating federal and state leaves with disability claims

Other Insurance Policies Offered: Homeowner’s, renter’s, auto and umbrella insurance 

Availability: All 50 states, plus the District of Columbia.

A.M. Best Financial Strength Rating: “A” Excellent

Best for Low Cost Coverage: Next Insurance

Next Insurance icon

Next Insurance is a newcomer in the business insurance space, having begun operations only in 2016.

But the company has already earned and A+ rating from the Better Business Bureau. The company has already provided insurance policies to more than 100,000 businesses.

They provide coverage for hundreds of different businesses, including some more unusual ones, like yoga instructors, actors, astrologers, bail bondsman, caricaturing and many more.

The company claims you can save up to 30% compared to the competition. They even offer 10% discounts when you bundle with multiple business insurance policies.

You can apply online and get coverage in as little as 10 minutes. All you need to do is describe your business, select the coverage you want, make your premium payment, and you’ll be covered, with a live certificate to be issued shortly.

To make the premiums easier on your budget, you can choose monthly payments.

Business Insurance Offered: General liability, professional liability, commercial auto, errors and omissions and worker’s compensation 

Other Insurance Policies Offered: No personal insurance offered – business policies only

Availability: All 50 states plus the District of Columbia

A.M. Best Financial Strength Rating: “A+” Superior

Best for Tech Start-ups: Founder Shield

Founder Shield icon

Founder Shield works with a narrower range of small businesses, with special emphasis on tech startups.

They offer coverage for businesses with anywhere from one to more than 50 employees, and various stages of existence, including beta/pre-launch.

In one of the more unique coverage options for companies on this list, they also provide health insurance for all group sizes.

Like other companies on this list, the entire application process takes place online, and can be completed in a matter of minutes.

Founder Shield focuses exclusively on rapidly evolving, high-growth companies.

Those include companies in e-commerce, fintech, the life sciences, media and advertising, micro-mobility, the on-demand and shared economy, professional services, technology and software as a service (SaaS).

They even provide coverage for venture capital firms. And not to worry if you’re not an established business – Founder Shield will work with business startups.

Business Coverages Offered: Crime insurance, cyber insurance, directors and officers, employment practices liability, errors and omissions, general liability, health insurance and employee benefits, hired and non-owned auto insurance, intellectual property, key person, management liability, product liability, representations and warranties, umbrella, and workers comp.

VCAP coverage for legal fees and judgments and settlements arising from lawsuits alleging failures in management or the provision of investment advisory services.

Other Insurance Policies Offered: No personal insurance offered – business policies only

Availability: Nationwide

A.M. Best Financial Strength Rating: Not rated

biBerk Insurance

BiBerk icon

biBerk is a Berkshire Hathaway company that was created specifically with small businesses in mind. 

The affiliation with Berkshire means they have over 40+ years of insurance experience and are rated A++ by A.M Best Company and AAA by Standard & Poor’s Corporation, meaning they have both superior financial conditions and operating performance.

biBerk Coverages

biBerk’s coverages are not as extensive or as niche as some others on this list, but they do offer many of the coverages that matter to most businesses.

These coverages include workers’ compensation, professional liability, general liability, property and liability (BOP), commercial auto, and umbrella.

biBerk How to Get a Quote

biBerk makes getting a quote easy with their online instant quote feature.

All that is required from you is the number of employees you have, your business’ industry, where you operate (home, office, building that you own or lease, etc.), and your location.

FAQ's

How much does small business insurance cost, and how are premiums determined?

Unfortunately, unlike other types of insurance, average premium costs – where they’re available – aren’t very useful. This is in large part due to the fact that there are so many variables attached to small business insurance.

Those variables include:

  • The type of business you have.
  • Your geographic location.
  • The risks specific to your business or industry type.
  • Your sales volume, or the number of employees or locations you have.
  • Any claim history you have with current or previous small business insurance providers.
  • The number of policy options you choose for your plan.
  • Any specific employees, business assets, or even business lines you need to cover.
  • Laws in your state, county, or municipality.

Where you do see any estimates or averages of small business insurance premium costs published or reported, the numbers may be completely irrelevant to the amount you’ll pay.

What are the major types of small business coverage?

It’s not an exaggeration to say that there are probably hundreds of different small business policy provisions.

That’s because there are unique needs in each business or industry, and very specific policies may be available for one industry that are not common for others.

But the most common small business coverage types include the following:

  • General Liability. Covers legal claims against your business, including lawsuits. Can pay in the case of bodily injury, property damage, or even advertising mistakes.
  • Professional Liability. Often referred to as errors and omissions (or “E&O”), this is a policy type that provides protection against claims arising out of business or professional practices, such as negligence, malpractice, or misrepresentation. It’s most commonly used by business professionals, like lawyers and CPAs.
  • Worker’s Compensation. A legal requirement in most states, it covers your employees if they experience a work-related injury or illness. It can pay both medical expenses and lost wages due to the illness or injury.
  • Product Liability. Protects your business against claims or lawsuits that are the result of injury or property damage determined to be caused by products your business has manufactured, distributed, or sold.
  • Employment Practices Liability. Provides coverage for claims made by employees. This can include discrimination, wrongful discharge, harassment, or inappropriate workplace conduct.
  • Commercial Auto Insurance. Personal auto insurance policies typically specifically exclude commercial use of your vehicle. If a vehicle is used for business, or owned by your business, commercial auto insurance will be necessary.
  • Commercial Property. Covers any assets owned by your company, including buildings, equipment, computers, inventory, tools, and even accounts receivable.
  • Business Owner’s Policy (BOP). Combines commercial property, general liability, and business income insurance. Other policy provisions may also be included.
  • Key Person Insurance. There may be one or more individuals in your business who are critical to the survival of your company. The death of a key person could threaten the survival of your business. You can take a life insurance policy on any such employees. Some policies even offer coverage for illness or disability that may remove the employee from your service even temporarily.
  • Directors and Officers. Directors and officers make decisions that will impact business operations. As such, they may be personally liable for actual or alleged acts of wrongdoing. This provision protects their personal assets.
  • Cyber insurance. Can cover losses due to data breaches or loss of client records. It may also extend to the costs of notifying both customers and employees, as well as damage control efforts to protect your company’s reputation.
  • Fidelity Bonds. This is a policy provision that protects the employer against losses caused by its employees. That includes fraudulent and dishonest activity. In other words, it protects your business from illegal activities by your employees. You may need a Fidelity bond for any employee who handles money or has access to company or customer accounts.
  • Umbrella. This is an extension of your general liability coverage. It provides for a higher dollar amount of coverage in case the claim exceeds the limits in your general liability policy. It’s referred to as umbrella coverage because it can extend to various liability policy types.

This is just a sampling of the types of business insurance available.

If you have any specific needs or concerns about potential liability, you should discuss that situation with your insurance company and see if there’s some sort of policy provision to protect you and your business.

Is small business insurance a legal requirement?

The general answer to that question is no. However, small business insurance may be required for certain types of businesses, or even for specific lines of business the company participates in.

One general exception however is any type of business that requires state licensure. This typically includes professionals, like doctors, lawyers, accountants, and other occupations that require any type of licensing.

Other businesses may be legally required to carry certain types of in order to gain approval to do business in a state. There is one type of small business insurance that you will be required to have, and that’s worker’s compensation.

It’s generally required any time you have employees, though it may also extend to certain types of contract workers. But just because small business insurance isn’t required for your business doesn’t mean you don’t need it.

There’s a fundamental difference between a legal requirement and a need, and you’ll need coverage if either situation applies.

The reality is any catastrophe or civil claim can create a liability. If you have insurance coverage, the claim will be paid up to the limits of your policy.

If you have no insurance at all, you’ll be required to pay out of your own resources. It’s even possible with small businesses that a legal claim against your company could extend you personally.

There’s one additional situation where some type of business insurance, or even comprehensive coverage, will be required: when you have a business loan.

The lender may require you to have certain types of coverage to provide the protection that will enable your business to survive certain perils so you can service your loan.

What are the tax considerations of small business insurance?

Since the premiums paid for small business insurance are qualified business expenses, they’re generally tax-deductible from your business income.

However, the business insurance must have a specific business purpose. Most do, so this won’t be an issue. Where you may run into a gray zone is when an insurance policy also provides certain personal benefits.

A sole proprietorship paying health insurance for the business may be an example.

The premiums may be deductible from your net business income for federal income tax purposes, but not for the self-employment tax (which is the sole proprietorship equivalent of the FICA tax for employees).

What about insurance proceeds received for the payment of a small business insurance claim – are they taxable?

In most cases, the proceeds of a paid claim on a small business insurance policy won’t be taxable. But there may be special circumstances where the proceeds will be partially or entirely taxable.

For example, let’s say you purchased a piece of equipment for $50,000, and insured it for the same amount.

But along the way, you wrote off depreciation on the equipment. The equipment is destroyed in Year 3, but not before you claim $30,000 in depreciation expense on it.

The payment of $50,000 on the equipment – which is its full replacement cost – could result in a taxable gain of $30,000.

According to the IRS, the equipment will only be worth $20,000 for tax purposes.

Since you received the full $50,000 of the original purchase amount on your insurance claim, a taxable gain will be recognized on the depreciated amount.

Insurance proceeds from a business insurance policy should always be evaluated by a business tax professional, preferably a CPA.

Which Small Business Insurance is Right for You?

Searching for business insurance is not the most fun activity, but it is necessary in order to protect yourself, your employees, and your business.

The best insurance providers offer a positive customer experience, high-quality products, and the right prices.

The 7 insurance companies on this list provide a range of products for businesses of all types.

If you’re looking for the right insurance company for you and your business, one of these 7 is a good place to start.

Embroker Insurance

Embroker is the insurance brokerage built for the way you do business. You get the ease of technology coupled with top-shelf service from the best brokers.

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