When you own a small business, you wear a lot of hats: owner, marketer, accountant, customer support, and occasionally IT. And to be honest, “insurance buyer” usually isn’t the fun hat. But having the right small business insurance in place can make the difference between a manageable setback and a savings-depleting disaster.
Whether you’re a solo consultant working from the kitchen table, a scrappy entrepreneur in rented office space, or an established team with employees and equipment, small business insurance, also called liability insurance, commercial insurance, and third-party insurance, helps guard you against common risks and protects what you’ve worked so hard to build. In this guide, we break down the most essential types of insurance for small business owners, what they cover, and how to figure out which policies make sense for your business — without the jargon or scare tactics.
No matter how experienced and careful you are, accidents, mistakes, and unexpected events can happen. A customer could slip and fall. A client could claim your advice caused financial harm. An employee could get hurt on the job. A fire, theft, cyber attack, or equipment failure could shut down your operations, perhaps indefinitely.
Without small business insurance, those situations could mean paying costly legal fees, medical bills, repairs, or settlements out of pocket. With the right coverage, insurance can step in to help pay costs, protect your assets, defend your reputation, and help keep your business running. Most importantly, it lets you focus on growth and serving your customers instead of worrying about worst-case scenarios.
While every business has unique risks, there are several types of small business insurance policies that are considered foundational. Below are the most common insurance products you’ll encounter, what they cover, and who typically needs them.
Business interruption insurance helps replace lost income if your business is forced to temporarily close due to a covered event, such as a fire, flooding , or other property-related damage.
Business interruption insurance costs an average of $1,200 per year.
It can help cover ongoing expenses like rent, payroll, and utilities while your operations are paused, helping you stay afloat until you can reopen.
A business owner’s policy (BOP) bundles several common coverages into one convenient policy. A typical BOP includes:
A BOP costs an average of $1,000 to $4,000 per year.
BOPs are often best suited for businesses that own their offices or buildings rather than lease them. Bundling insurance can sometimes simplify coverage and reduce overall costs.
Business personal property (BPP) insurance protects the physical items your business owns and uses every day — whether you work in an office, rented space, home, or job site. This typically includes:
If these business assets are stolen, damaged, or destroyed due to a covered event, BPP insurance can help pay to repair or replace them.
BPP coverage is usually priced based on the replacement value of the items you’re insuring. For Berxi customers, premiums average around 3% of that replacement cost, starting at roughly $220 per year.
BPP insurance is a good fit for general liability customers who have $4,000 or more in inventory or assets.
If your business owns vehicles or regularly uses them for work purposes, such as traveling to client sites, transporting tools, or making deliveries, personal auto insurance may not provide enough protection.
Commercial auto insurance helps cover liability and property damage resulting from business-related driving. It’s especially important for contractors, home service businesses, healthcare providers making house calls, and any company with branded or company-owned vehicles.
Business.com states that the national average cost of commercial auto is about $150 a month. However, this will be based on your industry, location, vehicle type and miles driven, driving records, and the number of vehicles you have on the road.
Commercial auto is often required if the business owner or their employees use a personal vehicle for company business, or own/rent/lease vehicles to run your business.
Commercial property insurance is just like BPP, but it’s designed for business owners who own the building where they operate. It covers both the structure and the contents inside, including equipment, inventory, and furniture.
Commercial property insurance cost between $500 and $5,000 per year depending on factors like location, size, and condition of the property.
Business owners who also own their office spaces or storage facilities. If you lease or rent your workspace, commercial property insurance generally isn’t necessary — business personal property insurance is usually a better fit for protecting what’s inside the space.
Commercial umbrella insurance provides excess limits to a range of commercial liability policies. This means you’d have extra coverage for claims that might have extreme payouts. It typically steps in after the initial policies’ funds are exhausted, subject to the terms of the umbrella policy.
According to Forbes, small businesses pay an average of $75 a month for commercial umbrella coverage.
It’s designed for businesses with higher risk exposure or larger assets and inventories to protect.
Cyber liability insurance helps protect your business from the financial fallout of data breaches, cyber attacks, and privacy-related incidents. It can help cover costs such as:
Security.org states that most small businesses pay between $30 and $125 a month for cyber liability insurance.
If your business stores customer data, processes payments, or relies on digital systems — which most modern businesses do — cyber liability insurance is becoming increasingly important. When buying General Liability from Berxi, a specialist can also help you bind a cyber policy.
General liability insurance is one of the most important policies for small business owners. It helps protect your business from some of the most common third-party claims that can arise during day-to-day operations, including:
If your business interacts with customers, clients, vendors, or the public in any way, general liability insurance is often considered essential. This includes salons, gyms and fitness studios, cleaning businesses, landscapers, healthcare practices, and many others.
Berxi general liability insurance starts at around $100 per year for certain solo professionals, like personal trainers, and $350 per year for small businesses.
General liability insurance is perfect for small businesses that don’t own their office spaces. Examples include independent contractors without office space and small business owners with rented office space.
If your business manufactures, distributes, or sells physical products, product liability insurance helps protect you from claims related to product-related injuries or damage. Think: car brand design defect causes crashes.
This coverage can help if a customer claims a product was defective, unsafe, or caused harm — even if you didn’t directly manufacture it.
Prices vary based on whether you are a wholesale business or a manufacturer, but Forbes reports that annual costs range from $736 to $2,431.
Businesses that make or sell products to consumers.
Professional liability insurance, which is usually called errors and omissions insurance outside of healthcare fields, protects your business if a client or patient alleges that your professional services caused them financial loss, harm, or injury. In this way, it differs from general liability insurance.
Professional liability insurance includes:
Errors and omissions insurance can help cover legal defense costs, settlements, and judgments if someone claims you made a mistake, gave incorrect advice, failed to meet expectations, or didn’t deliver services as promised, resulting in a financial setback for your client or customer.
For lower-risk professions, such as graphic designers, a Berxi errors and omissions policy starts at around $400 per year. For other professionals, such as home inspectors, a policy might start around $1,000 per year. However, your errors and omissions insurance costs will vary depending on a number of factors, including your industry, revenue, and location, so it’s always best to get an online quote.
If your business provides professional services or advice, this coverage is critical. Consultants, real estate agents, financial professionals, creatives and marketing professionals, healthcare providers, and other licensed professionals should consider professional liability insurance essential.
Workers’ compensation insurance covers employee injuries or illnesses that occur on the job. It can help pay for medical bills, rehabilitation costs, and a portion of lost wages.
Most states require businesses with employees to carry workers’ compensation insurance, and the rules vary depending on your location and number of employees. Even when it’s not legally required, having workers’ comp can protect both you and your employees if something goes wrong. Workers’ comp insurance can be added as an optional endorsement to Berxi general liability policies.
The monthly or annual cost is based on the level of risk and the number of employees you have. Most small businesses can expect anywhere from $15 to $80 per month.
Anyone with employees.
Not every business needs every type of small business insurance. The key is understanding your risks and choosing coverage that fits your operations, industry, and growth plans.
Start by looking at what your business actually does. For example:
Some types of small business insurance are required by law, such as workers’ compensation in many states. Others may be required by contracts, landlords, or clients. Insurance requirements are common, so be sure to always review agreements carefully.
Consider how much financial risk your business could realistically absorb. The more assets, revenue, and reputation you have at stake, the more coverage you may need. Many small businesses start with core policies and add specialized coverage as they grow.
You don’t have to figure it all out alone. Berxi’s in-house support team is available to answer questions, explain coverage options, and help you choose the small business insurance that aligns with your goals and the unique risks your business faces. You can reach us Monday through Friday, 8 a.m. to 8 p.m. ET, at 833-242-3794.
Whether you’re a solo professional or managing a growing team, having the right small business insurance helps you operate with confidence. Berxi offers affordable, customizable coverage options for small businesses and professionals, including:
We also partner with trusted insurers to offer cyber insurance, workers’ compensation, and commercial auto coverage — making Berxi a simple, one-stop shop for small business insurance.
Get a quote today and protect the business you’ve worked so hard to build. You can also call and talk to a product specialist who can help answer questions and compile quotes from Berxi and our partners.
Requirements vary by state and industry, but workers’ compensation insurance is commonly mandated for businesses with employees.
Yes. An LLC can offer some personal liability protection, but it doesn’t replace business insurance or cover professional, property, or operational risks.
A business owner’s policy (BOP) bundles general liability, commercial property, and business interruption insurance into one policy, often at a lower combined cost.
Absolutely. Insurance should evolve with your business, and most policies can be adjusted or expanded as your needs change.
Image courtesy of iStock.com/FG Trade
Image courtesy of iStock.com/AsiaVision
Image courtesy of iStock.com/Galdric
More:
The views expressed in this article are those of the author and do not necessarily reflect those of Berxi™ or Berkshire Hathaway Specialty Insurance Company. This article (subject to change without notice) is for informational purposes only, and does not constitute professional advice. Click here to read our full disclaimer
The product descriptions provided here are only brief summaries and may be changed without notice. The full coverage terms and details, including limitations and exclusions, are contained in the insurance policy. If you have questions about coverage available under our plans, please review the policy or contact us at 833-242-3794 or support@berxi.com. “20% savings” is based on industry pricing averages.
Berxi™ is a part of Berkshire Hathaway Specialty Insurance (BHSI). Insurance products are distributed through Berkshire Hathaway Global Insurance Services, California License # 0K09397. BHSI is part of Berkshire Hathaway’s National Indemnity group of insurance companies, consisting of National Indemnity and its affiliates, which hold financial strength ratings of A++ from AM Best and AA+ from Standard & Poor’s. The rating scales can be found at www.ambest.com and www.standardandpoors.com, respectively.
No warranty, guarantee, or representation, either expressed or implied, is made as to the correctness, accuracy, completeness, adequacy, or sufficiency of any representation or information. Any opinions expressed herein are subject to change without notice.
The information on this web site is not intended or implied to be a substitute for professional medical advice, diagnosis or treatment, and does not purport to establish a standard of care under any circumstances. All content, including text, graphics, images and information, contained on or available through this web site is for general information purposes only based upon the information available at the time of presentation, and does not constitute medical, legal, regulatory, compliance, financial, professional, or any other advice.
BHSI makes no representation and assumes no responsibility or liability for the accuracy of information contained on or available through this web site, and such information is subject to change without notice. You are encouraged to consider and confirm any information obtained from or through this web site with other sources, and review all information regarding any medical condition or treatment with your physician or medical care provider. NEVER DISREGARD PROFESSIONAL MEDICAL ADVICE OR DELAY SEEKING MEDICAL TREATMENT BECAUSE OF SOMETHING THAT YOU HAVE READ ON OR ACCESSED THROUGH THIS WEB SITE.
BHSI is not a medical organization, and does not recommend, endorse or make any representation about the efficacy, appropriateness or suitability of any specific tests, products, procedures, treatments, services, opinions, health care providers or other information contained on or available through this web site. BHSI IS NOT RESPONSIBLE FOR, AND EXPRESSLY DISCLAIMS ALL LIABILITY FOR, ANY ADVICE, COURSE OF TREATMENT, DIAGNOSIS OR ANY OTHER SERVICES OR PRODUCTS THAT YOU OBTAIN AFTER REVIEWING THIS WEB SITE.
Click to collapse disclamerWant Berxi articles delivered straight to your inbox? Sign up for our monthly newsletter below!
"*" indicates required fields
Want Berxi articles delivered straight to your inbox? Sign up for our monthly newsletter below!
