Essential Business Insurance Policies for Small Companies

Running a small business comes with many responsibilities — one of the most critical is making sure your company is protected from financial loss. The right insurance policies help you stay resilient through unexpected events, lawsuits, property damage, or employee issues.

This guide outlines the essential business insurance policies every small company should consider to stay secure and compliant.

1. General Liability Insurance (GLI)

Why you need it: General liability insurance protects your business from third-party claims related to:

• Bodily injury (e.g., a customer slips in your store)

• Property damage (e.g., damaging client property)

• Personal or advertising injury (e.g., slander or copyright issues)

💡 Most landlords, vendors, and clients require GLI before doing business with you.

👉 Learn more: Understanding Liability Insurance for Small Business Owners

2. Commercial Property Insurance

Whether you own or rent your space, this policy covers:

• Your building (if owned)

• Equipment and inventory

• Furniture and fixtures

It protects you from fire, theft, vandalism, and certain weather events. For businesses with physical locations, this is non-negotiable.

3. Business Owner’s Policy (BOP)

A BOP combines general liability and commercial property insurance in one cost-effective package. It’s perfect for small businesses seeking broad coverage at a lower premium.

💡 Often includes business interruption insurance to help cover lost income if your operations are paused due to a covered event.

4. Professional Liability Insurance (Errors & Omissions)

For service-based businesses, professional liability covers legal expenses if you’re sued for mistakes, negligence, or failure to deliver promised services.

• Consultants

• Accountants

• Designers

• Real estate agents

• IT professionals

This is crucial if your business provides advice or services.

5. Workers’ Compensation Insurance

Required in most states, this policy covers:

• Medical costs

• Lost wages

• Rehabilitation

• Death benefits (if applicable)

Even if you have just one employee, you likely need workers’ comp to comply with the law.

6. Commercial Auto Insurance

If your company owns or uses vehicles for business purposes, personal auto insurance won’t cover them.

Commercial auto policies cover:

• Accidents involving your work vehicle

• Third-party bodily injury

• Property damage

• Vehicle theft

7. Cyber Liability Insurance

Cyberattacks and data breaches are growing threats. This policy protects your business from:

• Data breaches

• Ransomware

• Legal fees

• Notification costs

• Reputation damage

If you store customer information online, this policy is a must.

8. Employment Practices Liability Insurance (EPLI)

EPLI covers your business if you’re sued by an employee for:

• Discrimination

• Harassment

• Wrongful termination

• Retaliation

With workplace lawsuits on the rise, EPLI helps mitigate this growing risk.

Why Choose THAgency?

At THAgency, we work with nearly 100 top-rated insurance carriers to find the best price and the most suitable coverage for your specific needs. Whether you’re a new business owner or looking to reassess your existing policies, our experts are here to help you protect what you’ve built.

✅ Nearly 100 carrier options
✅ Customized coverage
✅ Competitive pricing
✅ Expert guidance every step of the way

FAQ: Small Business Insurance

What insurance is mandatory for small businesses?

It varies by state, but most businesses need general liability and workers’ comp insurance at a minimum.

Can I bundle policies to save money?

Yes! A Business Owner’s Policy (BOP) is a great way to bundle general liability and property coverage at a reduced cost.

How much does small business insurance cost?

Costs vary by industry, location, and size. Most small businesses pay between $500 and $2,000 annually for essential coverage.

When should I review my policies?

Annually or whenever your business undergoes major changes (e.g., hiring employees, relocating, launching new services).