The Best Business Insurance for Entrepreneurs in 2025

Business insurance is a set of protection plans designed to safeguard companies against various risks and potential financial losses. Just like you have health insurance to protect yourself, business insurance protects your company from unexpected events that could harm its financial health or operations.

There are many types of business insurance, which we’ll cover in more detail below. Some of the most common types are general liability insurance, commercial property insurance, workers’ compensation insurance and commercial auto insurance.

You are likely required by law to carry at least some business insurance. The types of business insurance that you are legally required to have can vary depending on your country, state, region and the nature of your business. Some of the most common types of insurance that many businesses legally need include workers’ compensation and commercial auto insurance.

Even when they’re not legally required, there are many types of insurance that you will likely want to purchase to protect your business from devastating financial losses caused by accidents, disasters and lawsuits. These policies may include general liability and professional liability insurance.

“As a DJ, I run lots of big equipment and lighting so having insurance is crucial for me in case someone falls or trips on a cable,” said Billy Heany, owner of Limitless Events DJs. “Plus, many of the high-end venues we work with require it. So after hearing a story of another DJ who got sued, I Googled different providers.” Heany opted for both general liability and professional liability, in addition to marine coverage, which “covers all theft or damage of my equipment in my van or while being transported.”

Jay Barton, CEO of ASRV, said that as his company grew, “I realized how important it was to have the right insurance in place — not just to meet requirements but to actually protect what we’ve built.” He, too, chose general and professional liability insurance. “With our brand, we have a strong digital presence and custom designs, so I needed policies that could support that,” Barton explained.

Business insurance costs vary widely by company, industry and policy type. Your business’s size, revenue, assets, location and claims history will also affect your prices, as will the coverage limits you select. This is why insurers provide custom quotes and why you should shop around. To accurately compare quotes between two or more insurance providers, make sure you supply each one with the exact same information when requesting a quote.

Premiums

Generally speaking, rates for a single policy can range from $25 per month to more than $600 per month. A quote may show your yearly premium, monthly premium or both. This premium is how much you pay for coverage. Some providers give a discount if you pay your annual premium upfront.

While your premiums will be tailored to your specific business needs, a small business that’s just starting out might expect to pay the following for new policies:

• Business owner’s insurance: $84 per month
• Professional liability insurance: $81 per month
• General liability insurance: $65 per month
• Workers’ compensation insurance: $72 per month

Deductibles

Some policies, such as commercial property and business owner’s insurance, may have a deductible associated with claims. In such instances, you must pay the deductible out of pocket before the insurance provider will cover the rest of the claim. Deductibles can start at $500 per loss. The higher your deductible, the less expensive the insurance premium will be because you are assuming more risk in the event of a loss.

Even though it may be tempting to go with a high deductible to keep your premium low, you need to ensure you’ll be able to afford the deductible should you need to pay it. When it comes to commercial auto insurance deductibles, you’ll pay the deductible directly to your auto shop when you get the vehicle repaired. In other cases, you’ll pay the deductible to your insurer.

After comparing quotes, you should negotiate with your preferred insurance provider to see if they will lower your premium. You can even tell them how much a rival company is quoting you, as an incentive to reduce their quote to win your business.

Bundles

To save money on business insurance, bundle policies with the same provider or opt for packaged insurance policies. You can also lower your costs by engaging in risk mitigation and loss prevention programs in which you proactively take steps to reduce your risks.

For example, to reduce the likelihood of a workers’ compensation claim, you can implement a workplace safety program. Insurers may give you discounts for certain preventive actions like these, or for having a claims-free history. You should also make sure you’re not getting coverage you don’t actually need. A company that doesn’t operate vehicles, for instance, doesn’t need commercial auto insurance.

Business insurance works on a simple principle: You pay a regular fee to an insurance company, and in return, it agrees to cover specific risks or losses your business might face.

Here’s a general breakdown of how it works:

1. You choose the types of coverage you need based on your business risks.
2. Once you enroll in a policy, you pay premiums monthly or annually to maintain your coverage.
3. If something goes wrong, such as property damage or a lawsuit, you file a claim with your insurance company.
4. If your insurance policy covers your claim, the insurer will cover a portion or all of the costs associated with it.

That may seem simple, but insurance policies themselves can be pretty complicated.

To determine the types of coverage you need, consider the risks your business faces. Some coverage, like workers’ compensation insurance, is usually required by law. Others, like cyber insurance and general liability insurance, are often optional.

Every business’s insurance needs will be different. At a minimum, most businesses need a general liability insurance policy and, if they have employees, workers’ compensation insurance.

There are many types of business insurance. Here’s an overview of some of the most popular types of commercial insurance that businesses typically obtain.

This video breaks down six common types of business insurance.

General Liability Insurance

General liability insurance is a standard policy that protects the company from third-party losses. Among other situations, a loss may occur when someone falls on your property and gets injured or when a lawsuit claims you infringed on another company’s copyright. General liability covers the loss and assigns legal representation to protect your rights in court.

Commercial Property Insurance

A commercial property insurance policy covers your business from any loss to the company’s assets, such as furniture, computers and inventory. This coverage typically protects you from theft, fire and vandalism. There is usually a deductible you must pay in a commercial property loss.

Business Owner’s Policy

A business owner’s policy (BOP) combines general liability and commercial property insurance into one comprehensive package. This bundled approach typically saves businesses 15 to 30 percent compared to purchasing separate policies, making it an attractive option for small to midsize businesses. BOPs can often be customized with additional coverage options like business interruption insurance or equipment breakdown coverage.

Professional Liability Insurance

Professional liability insurance covers your business from third-party losses resulting from mistakes in your professional work, such as professional negligence. This policy is the same as errors and omissions insurance or medical malpractice insurance. If a professional error is made, this policy covers the loss and your legal defense.

“I picked general liability and professional liability insurance because it’s important to have both when you have guests, suppliers and the odd problem that comes up out of the blue,” said Drew Wiard, owner of Clear Skye Properties. “I want to be sure that I’m safe in case something goes wrong.”

Jessica Wright, who is also in real estate as the owner of Buy My Home Chattanooga, made the same choice. “Both are key in my line of work since I’m regularly entering people’s homes and handling contracts,” she told us.

Product Liability Insurance

Product liability insurance covers a business, such as a product manufacturer, against third-party claims of bodily harm, illness or damage related to the business’s product. This can extend to individual parts or components that your small business manufactures.

Commercial Auto Insurance

If your business owns vehicles, commercial auto insurance can cover damage or injury caused by those vehicles. Personal auto insurance policies often don’t cover vehicles used for business purposes.

Business Interruption Insurance

Business interruption insurance provides crucial financial protection when your operations are disrupted by covered events like natural disasters, fires or equipment failures. According to the Federal Emergency Management Agency (FEMA), 40 percent of businesses never reopen after a disaster, making this coverage essential for business continuity. The policy typically covers lost income, ongoing expenses like rent and payroll, and temporary relocation costs during the recovery period.

Crime and Financial Liability Insurance

Crime and financial liability policies cover losses due to the theft of business property, which can include stolen money; employee financial fraud; workplace violence; electronic and computer crime; and kidnapping, ransom or extortion.

Cyber Insurance

Cyber insurance has become increasingly critical as cyber threats evolve. The FBI’s Internet Crime Complaint Center reported that cybercrime losses exceeded $12.5 billion in 2023, with small businesses being particularly vulnerable targets. Cyber insurance policies typically cover data breach response costs, business interruption from cyber events, ransomware payments and legal fees associated with privacy violations.

Andrew Lokenauth, who initially went with a business owners policy for his consulting business, added cyber insurance after a client was hacked. The experience led him to realize he was “better safe than sorry.”

Workers’ Compensation Insurance

Workers’ compensation insurance covers losses to employees who get injured on the job. It pays for medical expenses, lost wages and rehabilitation services for those who get hurt. In most states, workers’ compensation is required for most businesses with at least one employee.

When you’re investigating insurance policies, regardless of the type of insurance, these features are among the most important to consider. Together, they affect how much you will pay both to keep the policy active and your out-of-pocket costs should an incident occur, as well as how much your insurance policy will cover and whether there are circumstances it won’t cover.

Premiums

The rates you’ll pay for a given insurance policy are determined by actuaries who work for the insurance company, and they are based on the perceived risk of your business.

For example, if you purchase commercial auto insurance and have one delivery driver who makes local trips in a modest car, your premium is likely to be lower than a premium for a business with a fleet of expensive trucks making long-distance trips and hauling a lot of cargo daily. This is because there is less perceived risk that the single, local driver will trigger a claim.

Coverage Limits and Deductibles

Coverage limits determine the maximum amount your insurance will pay for a claim. Most small businesses opt for general liability limits between $1 million and $2 million per occurrence, though specific needs vary by industry and risk exposure. Higher limits mean higher premiums, but inadequate coverage could leave you vulnerable to significant out-of-pocket expenses.

Deductibles work inversely with premiums — higher deductibles typically result in lower monthly costs. However, you need to balance affordability with your ability to pay the deductible when filing a claim. Many businesses find that deductibles between $1,000 and $2,500 offer the best balance of premium savings and manageable out-of-pocket costs.

Policy Exclusions

Understanding what your policy doesn’t cover is just as important as knowing what it does. Common exclusions include intentional acts, professional errors (unless you have professional liability coverage), employee injuries (covered by workers’ compensation), and certain natural disasters like floods or earthquakes. Review exclusions carefully and consider additional coverage for significant gaps that could impact your business.

Business insurance can make the difference between growing into a successful company and shutting down prematurely. While each type of insurance has pros and cons, they generally protect you from a wide variety of potential issues.

Here are some of the many benefits of obtaining business insurance:

• It reduces financial liability. Your insurance pays for costly claims. For example, certain policies cover bodily injury to others who come into your business. This reduction in financial liability is especially valuable for those who might not have the resources to pay a claim out of pocket.
• It protects against advertising injury. Business insurance may protect against claims of false advertising, libel, slander or copyright infringement. For example, if you put out an ad that mentions one of your competitors in a bad light and they sue you with a claim that the ad hurt their business, your insurance covers the costs of defending your business.
• It protects your business property. Business insurance safeguards against damage to property you rent. This enables you to quickly repair or replace damaged equipment or property and continue business as usual.
• It fosters trust. Clients and customers want to work with responsible companies, and those with insurance demonstrate this credibility by engaging in responsible practices.
• It helps you comply with laws. While much insurance is voluntary, some policies, like workers’ compensation insurance, are required by law. Legally mandated insurance policies are required to keep your business compliant with state and federal regulations.
• It helps you establish risk assessment plans. Insurance companies want to help you reduce the risk of loss and often assist businesses in developing risk assessment plans that include safety protocols and employee training.

In general, business insurance allows you to focus on your business even when you’re facing a claim of damage, injury or negligence.

To choose business insurance and a provider, start by evaluating the risks in your business. Next, identify the types of insurance policies that can protect your business from those risks in the event of an incident. From there, request multiple quotes to compare what each insurer is offering, and see which company will give you the most coverage at the most affordable rate.

To help you during this decision-making process, business.com spoke with business owners and leaders to find out what they prioritized when choosing business insurance and insurance agencies to work with. Below are some of the top factors they recommended keeping in mind.

Costs

Misty Spittler, who owns the online education company Insurance Claim Academy, said she’s willing to pay “slightly higher premiums to work with a reputable company.” She warned fellow business owners “not to make a decision based solely on cost.”

“Ask about renewal rates,” Spittler recommended. “Some companies lure you in with a low initial rate [and] then hike premiums substantially after the first year. Do your homework and find an insurance partner, not just a policy.”

Coverage Inclusions and Exclusions

Make sure you know the specific coverage your policy includes. “Look closely at what each policy actually covers, and speak to others who have filed claims,” Spittler said. “An extra few hundred dollars in premiums is worth the coverage and service you’ll receive should a claim arise.”

Although David Weisselberger, founding partner at Erase The Case, considers “coverage scope” one of his top priorities, he admitted, “If I had to do it over, I would take more time to compare the exclusions and restrictions of the policies.”

Geoff Stanton, president of Stanton Insurance, expressed a similar regret. “One thing I would do differently is take more time exploring additional riders and endorsements to ensure maximum protection,” he told us. “An insurance policy is only as good as the coverage it provides.”

Claims Process and Customer Service

The true test of an insurance company comes when you need to file a claim. Research the insurer’s claims satisfaction ratings and average claim processing times. Look for insurers that offer 24/7 claims reporting, dedicated claims representatives and digital claims tracking. Some insurers now provide mobile apps that allow you to photograph damage and submit claims instantly, significantly speeding up the process.

Financial Stability and Reputation

Verify the financial strength of any insurer you’re considering through independent rating agencies like A.M. Best, Standard & Poor’s or Moody’s. An insurer with an “A” rating or higher from A.M. Best indicates strong financial stability and ability to pay claims. Additionally, check with your state’s insurance department for complaint ratios and regulatory actions against the company.

To determine the best business insurance on the market, our team of financial analysts and business operations experts evaluated an initial list of 18 insurance providers. We narrowed the list to eight after considering the types of insurance policies each provider offered and whether they were ideal for small and midsize businesses across industries throughout the country.

To choose our six best picks, we studied each insurance company’s policies, quote process, terms and conditions, and costs. We questioned providers about their bundled policies, and we experimented with enrollment, claims filing and customer support resources. We also read through customer reviews, looking for testimonials that highlighted each insurer’s strengths and weaknesses to see how customers’ real-life experiences aligned with our own.

In the end, our experts and analysts studied each insurance provider and evaluated their business insurance products on more than 20 factors. We weighted each of these factors differently in our overall conclusion, based on how much business owners prioritize each of these criteria when shopping for business insurance and making purchasing decisions.

• Pricing (30 percent): Our experts and analysts compared and contrasted each insurer’s average and median insurance rates and coverage limits for stand-alone and packaged policies, judging which products offered the best bang for your buck. We took into account premiums, deductibles, discounts, renewal price increases, contract terms and exclusions.
• Services (25 percent): We looked for standard insurance company services, like online quote generation, rate comparison tools, fast claims processing, and loss prevention programs. We also assessed the available bundles and awarded extra points for advanced services, like coverage matching tools, mobile apps and perks programs.
• Ease of use (25 percent): We tested the quote generation, enrollment and claims-filing processes ourselves, gauging each service’s learning curve, user-friendliness and customization options. We also considered whether there were mobile apps for mobile claims filing, premium payments and other tasks.
• Customer service (20 percent): We evaluated the range of each insurance provider’s customer service options, including whether phone assistance was available 24/7. We also examined each insurer’s online resources for businesses interested in self-help, insurance information guides, and topical business blogs and podcasts.

Based on these criteria, we determined which insurance providers our readers could trust, as well as the ways each company could best serve different business needs. Some insurers were better at certain policies or services than others, or more suited to a particular type of business. These takeaways informed the “best for” use cases you see on this page.

To learn more about our methodology, see our full editorial process.