Kevin Mercadante is professional personal finance blogger, and the owner of his own personal finance blog, OutOfYourRut.com. He has backgrounds in both accounting and the mortgage industry. He and his wife are "empty nesters" living in New Hampshire.
Business insurance is one of many ways businesses can increase their chances of success and mitigate the insane risk of starting their business.
That's why understanding your options in small business insurance is critical to your success in the business world.
Standing as a pillar for decades, Hiscox has solidified its presence as one of the most reliable small business insurance providers. They are recommended for entrepreneurs, self-employed, and freelancers.
Business insurance is another overhead cost associated with your operation. While, at times, it may seem like an unneeded expense, you must understand its value.
Every business has risk involved, so there is almost no excuse not to have coverage of some kind. Take the most recent pandemic, for example.
Just from business interruptions alone, estimates say small businesses have lost between $255 to $431 billion per month, with more than 44 million workers forced to leave.
Finding the right business insurance coverage can be daunting, so I've researched the best small business insurance companies on your behalf.
The Best Small Business Insurance Providers in 2023
Compare Business Insurance Companies
NEXT Insurance is a strong contender in providing coverage for businesses because of its flexibility in the types of protection offered.
Hiscox Insurance offers business insurance tailored to your specific business needs. Helping the courageous overcome the impossible through business insurance.
Through Embroker, 20,000 entrepreneurs and businesses have the safety and security of a strong, digitally advanced insurance platform.
CoverWallet helps businesses obtain commercial insurance through an online quoting portal.
CyberPolicy is the only place where you can compare business insurance quotes and buy multiple insurance policies online.
I've considered cost, customer reviews, and business history for my research. The other factors influencing this list include common coverage types such as general liability insurance and business property insurance.
My research focuses on helpful insurance coverage for the majority of businesses. There are niche coverage options, but I want to cover as many businesses as possible with the base they need.
Here are all the details about the best small business insurance companies in 2023.
1. NEXT Insurance - Best Overall
They strive to create a simple and affordable package tailored to your business. NEXT Insurance also offers a pretty reasonable amount of coverage options such as general liabilities, commercial auto, commercial property, and workers' compensation.
Overall, they seem to provide the base package for small businesses getting on their feet.
When looking at reviews for Next Insurance, it's easy to see that they genuinely care about their customer experience. While Next Insurance does have primarily positive reviews, they are sure to address and fix issues with users who have painted complaints.
NEXT Insurance's general praise for its straightforward and easy-to-use process. The common complaints seem to be a widespread misunderstanding of policies or some rogue instances of miscommunication between NEXT Insurance agents and clients.
2. Hiscox - Best for Self-employed
Hiscox Insurance dates back its origins to 1901. Impressively, the company has evolved, stood the test of time, and has continued to provide top-notch insurance at one of the most affordable rates for small businesses.
Hiscox offers general liability, errors, and omissions, BOP, and workers' compensation. It also covers various industries such as marketing, contractors, freelancers, and consultants.
The reviews for Hiscox were interesting to read. The complaints seem to revolve around their home insurance policies and the wait time on claims. Most people dealing with Hiscox praised it as an easy and understanding company.
The majority of reviews left on Trustpilot, positive or negative, have garnered some response from Hiscox. Hiscox's responsiveness shows that they are actively reading and taking consumer feedback to improve their service and experience, reassuring future clients.
3. Embroker - Best for Startups
This approach to business insurance is extraordinary because Embroker can provide fast, effective, and affordable coverage for all small businesses.
Embroker offers general liability, commercial property, product liability, and workers' compensation insurance. Like the other companies on the list, they provide more coverage, but these are the most commonly needed business insurance plans.
I honestly couldn't find too many reviews on the internet about Embroker. It's odd to hear almost nothing from a business, whether it's a complaint or praise.
I found employee reviews, and they seemed satisfied with their time working with Embroker. Looking at other review sites, they all seem to have the same issues when combing through the internet for user reviews.
Still, I could find some insight into what other reviewers thought about Embroker, and the reception is generally above average and positive.
4. Thimble Insurance - Best for Micro-businesses
Thimble Insurance was founded in 2016 by Jay Bregman and Eugene Hertz. While still relatively new as a company, Thimble Insurance strives to create a simple, scalable, and flexible model for its clients.
It achieves this by providing quick and trustworthy service. Thimble provides a surprising number of cover options for various businesses.
The primary coverage options are general liability, equipment protection, professional liability, business owner policy, and commercial property insurance.
I was genuinely shocked at how positive Thimble Insurance's reviews were. Most users have praised Thimble Insurance as the best company they've ever seen.
The claims process, coverage, and customer experience continue to be honored. There are negative reviews of Thimble Insurance, though they're very few.
Even so, it's important to note that the company has addressed these negative experiences, and most are misunderstandings or confusion during communication between the two parties.
5. CyberPolicy - Best for Comparison Shopping
This company excels at finding your business's best price by comparing other insurance plans. Like the other companies on this list, CyberPolicy offers general liability, professional liabilities, commercial auto, and workers' compensation insurance.
Unlike the other companies, though, CyberPolicy provides the best comparison options to find you the best deal possible.
Generally, the people who reviewed and used CyberPolicy have had a good experience receiving competitive quotes. Since CyberPolicy doesn't set premiums or prices, there is little to complain about how they operate.
CyberPolicy is partnered with excellent and trustworthy insurance companies and therefore has impressive backing to mitigate potential negative feedback.
The general reviewers praise the speed at which they're able to compare and get insured; for that, CyberPolicy makes a list.
Why Do I Need Small Business Insurance?
Small business insurance is not just an additional overhead cost. When operating a business, there will always be some risk; being prepared for that risk is vital to your business's survival.
Your business insurance acts as a lifeline for inevitable accidents and disasters. The costs associated with employee compensation, buying an entirely new property, or repairing very expensive or replacing expensive equipment are not something a small business can usually afford.
Types of Small Business Insurance
I found a vast number of options in regards to the best small business insurance. It's essential not to get overwhelmed or paranoid by how much coverage a person can get.
Even so, it's necessary to look at what you will need and its costs.
General Liability Insurance
Typically, general liability insurance covers most business-related incidents such as property damage, lawsuits, settlement bonds, and medical expenses.
Product Liability Insurance
Costs associated with defective products and damages caused by the product.
Business Property Insurance
Covers property damage from natural disasters and potential negligence. Beneficial for businesses that have multiple offices or properties.
Business Income Insurance
Provides income during operational disruptions such as property renovations.
Acts as an extra layer on top of your other insurance policies. Where your additional liability coverage may fail, a commercial umbrella insurance policy typically covers those areas for your business.
Covers costs of employee accidents during company work hours.
Commercial Auto Insurance
Covers damage to company vehicles.
While there is insurance, you should only consider coverage for the likelihood of those damages existing. For example, you probably won't consider tropical storm disasters if you live in an area that barely receives rain.
Similarly, if your business doesn't use company vehicles or do excess traveling, you most likely won't need to consider commercial auto insurance.
Should I Get Small Business Insurance?
Small business insurance is never a hindrance to your operation, it is only there to help and support you. Costs associated with small business insurance may seem unnecessary as you continue your process without incident, but when disaster strikes, you'll be grateful for its existence.
There are multiple companies, coverage options, and prices that will fit your needs, and there is no reason for you not to consider and look at these options.
In the end, operating a business is a risk, and it's your job as a business owner to mitigate the risks associated with it as much as possible.
NEXT Insurance was created to give your business the coverage it deserves. Simple, affordable and tailored.
Below are the most common questions about small business insurance in 2023.
Small business insurance acts as a safety net for businesses when facing legal problems or operational interruptions.
Depending on your coverage, you'll find that insurances cover legal liability, property damage, employee injury, and income loss.
Small business insurance operates nearly the same as other insurance, such as health insurance and car insurance. Essentially, the business pays a certain amount of money, monthly or yearly, to an insurance company.
That insurance company then promises to cover damages that may happen during the business's life. The insurance company will continue receiving money from the business regardless of an incident.
This business model works well for both parties because the entire organization is financially safe in case of an accident, and the insurance company profits from the business over time.
While there will be cases where the insurance company does have to cover damages associated with business operations, they will still make a profit because of all the businesses they're hiding.
The costs associated with small business insurance vary, but typically businesses have general liability, workers' compensation, and property insurance.
Assuming you're paying for general liability insurance, you'll find that the average cost is about $30 a month or $360 a year. According to a Hiscox survey, nearly 95% of businesses will pay less than $50 in general liability insurance.
Workers' compensation insurance follows a bit of a different route. According to The Hartford estimates, insurance premiums for workers' compensation cost $1 for every $100 in payroll.
This estimate means costs will be higher or lower depending on the number of employees and how much their payment.
While property insurance varies by state and insurer, the average costs range between $50 to $80, typically around the price point of around $60.
Yes, you will still need insurance, even as an LLC. Even if your company is an LLC, it's important to remember that this only stops you as an individual from being sued or being responsible for the damages of the company.
Being an LLC does not stop the business from paying for legal issues, property damage, or workers' compensation. At the bare minimum, companies with employees for workers' compensation insurance, assuming you have employees.