Business Coverage Scout Small business insurance, surveyed

Small business insurance

Small business insurance, scouted before you buy

The main types of business insurance, the places a quote can come from, and the questions worth asking before you sign. Set out in plain words, with no scores attached.

Start with policy types Questions to ask

The ground to cover

The main kinds of business insurance

Most small businesses need two or three of these, not all eight. Which ones depends on whether you have staff, premises, vehicles, client contracts or customer data.

  • Plot A1

    General liability

    Claims that the business injured someone or damaged their property, along with some advertising claims. Often the first policy a landlord or a client asks to see.

  • Plot A2

    Professional liability

    Also called errors and omissions. Claims that advice or a service you provided cost a client money. Matters most where the business sells expertise.

  • Plot B1

    Commercial property

    The building if you own it, and the equipment, stock and fixtures inside it. Flood and earthquake are usually left out and bought separately.

  • Plot B2

    Business owner's policy

    General liability and commercial property sold together as one policy, often with business interruption cover added. Aimed at smaller businesses.

  • Plot C1

    Workers' compensation

    Medical costs and lost wages for employees hurt at work. Most states require it once you take on staff, and the rules differ from state to state.

  • Plot C2

    Commercial auto

    Vehicles the business owns or uses for work. A personal auto policy may not respond when the car is being driven for the business.

  • Plot D1

    Cyber liability

    The cost of a data breach or a ransomware attack: notifying customers, restoring systems, and claims from people whose records were exposed.

  • Plot D2

    Umbrella

    Extra limits above general liability, commercial auto and employer liability, for the claim that runs past what those policies will pay.

Where quotes come from

Three routes to a business insurance quote

The same business can be quoted through more than one of these. They differ in how many insurers you hear from and how much of the reading you do yourself.

  1. First route

    An independent agent or broker

    Works with several insurers, so one application can come back as more than one quote for the same cover.

    Useful when the business does something an insurer has to think about, or needs several policies at once.

  2. Second route

    A captive agent

    Represents a single insurer, so every quote comes from that company and its range of policies.

    Worth hearing from when you already hold a personal policy with that insurer and want to compare.

  3. Third route

    Direct, or through an online marketplace

    You complete the application yourself, either with one insurer or on a site that passes it to several.

    Quick for simple, low-risk businesses. The work of reading the policy wording falls to you.

Whichever route you take, the application sets the price. Expect to be asked what the business does, where it operates, its revenue and payroll, how many people work there and whether there have been claims before.

Before you buy

Questions to ask before you sign a policy

Two quotes at the same price can cover very different ground. These are the questions that show the difference.

  1. What does the policy exclude?

    Ask for the exclusions in writing, not a summary. What a policy leaves out decides more than what the brochure says it covers.

  2. Is it occurrence or claims-made?

    A claims-made policy answers only for claims made while it is in force. If that is the form, ask for the retroactive date as well.

  3. What are the limits, and do defence costs sit inside them?

    There is usually a limit per claim and an aggregate for the year. Legal costs that eat into the limit leave less for the claim itself.

  4. What is the deductible, and when is it charged?

    Find out whether it applies per claim, per occurrence or once a year, and whether it also applies to defence costs.

  5. Do my contracts ask for anything specific?

    Leases and client contracts often name a minimum limit or ask to be added as an additional insured. Check before you buy, not after.

  6. Does the cover travel with the business?

    Work in another state, at a client site, or from home can sit outside a policy written for one address. Ask where it applies.

  7. Will the premium be audited?

    Workers' compensation and some liability policies are priced on payroll or revenue and checked at the end of the term, which can move the final bill.

  8. What happens at renewal?

    Ask how much notice you get of a price change or a decision not to renew, so there is time to look elsewhere.

Notes in the margin

How business insurance is written about here

  • Nothing is scored

    No ratings, no star counts and no tier boards. Where one route suits a business better than another, it is said in words, with the reason next to it.

  • Premiums stay attributed

    What cover costs depends on the business, the state and the claims history. A price that appears here comes with where it was published and when.

  • Information, not advice

    This is not an insurance agent or broker and it does not sell policies. A licensed agent in your state is the person to confirm what a policy covers.