Seven benefits of business insurance

Business insurance offers the financial protection your small business needs against unexpected events. Some types of insurance are required by law.

Not all companies need the same coverage. Our experts can help you understand the benefits of business insurance and create a strategy tailored to your needs.

What are the advantages of having business insurance?

Thanks to a variety of coverages, all businesses can benefit from the peace of mind that insurance provides. But there are more advantages than you might think. If you have a small business, here are some of the most important ways that business insurance can help you:

1. Complying with legal regulations

In some cases, business insurance is necessary to comply with state laws. For example, many states require workers' comp protection for employees. Other regulations, like commercial auto insurance laws, also vary by location. Be sure to check business insurance requirements in your state.

Carrying the right business insurance coverage keeps you in good legal standing.

2. Meeting contract and industry requirements

Business insurance may be necessary to meet contractual obligations, licensing requirements, or industry regulations, even when it isn't required by law. It can give your customers confidence while protecting you from claims.

For example, financial consultants may need to carry professional liability insurance (also called errors and omissions insurance), which protects your clients if you make a mistake.

3. Protection against lawsuits and other expenses

One of the most common types of business insurance is liability, which offers dual benefits: It can help you manage the cost of defending yourself against claims that you caused harm to others, and it can help pay for damages if you did make a mistake.

There are several kinds of liability insurance, each designed to cover specific risks. Helpful options for small business owners include general liability, professional liability, and employers liability.

4. A safety net for your property

It's not all about damage to others. Insurance can also protect against damages to your own business. Depending on the coverages you choose, you can build a safety net for your property, data, operations, and more.

For example, commercial property insurance benefits businesses by protecting their office space, buildings, equipment, and other assets from covered events like fire or theft. If a fire damages your office, property coverage on a business owners policy (BOP) may help with repair or replacement costs for your computers, desks, and more.

5. Improved reputation

The benefits of business insurance extend beyond financial protection. Good business insurance coverage also shows people that you're serious about your work and ready to take responsibility if you make a mistake or something goes wrong. That accountability can improve your reputation and open the door to new opportunities.

For example, bigger clients are more likely to require coverages like professional liability, so a good business insurance policy can also be an investment in your bottom line.

6. Avoid lost income

Business insurance can also help if you need to take a pause after a covered loss. Business interruption insurance helps pay for lost income if an event like a fire disrupts your operations. It can also cover other costs like rent, relocation expenses, and even payroll while you get back to business as usual.

7. A healthy company long-term

Insurance is an investment in your business's future. The cost of your policy is tax-deductible, and the many benefits of a BOP mean that if something does happen, your income is protected, your costs are lower, and your business is safer. All of that can save you money in the moments that matter most and make it easier to build something that lasts.

How do I find the right business insurance?

Your business insurance needs depend on many factors, including location, industry, and company structure. There are several types of business insurance you might need:

Liability insurance

The kind of liability insurance that's right for you depends on your industry:

• General liability: Covers damage to others you're directly responsible for, such as property damage and injuries.
• Product liability: This type of liability coverage protects you if a client claims that your products or services caused harm to them or someone else. Product liability is part of your general liability insurance or BOP.
• Professional liability: Also called errors and omissions, this kind of business insurance covers you against claims that your mistakes or negligence caused indirect damages to a client.

Small business owners should explore the basics of business insurance and then think about how much protection they should have. For example, while a general liability policy includes product liability, the coverage limits you select would depend on the products you work with.

It's normal for businesses to need more than one type of insurance, too. If you offer advice and services for a living, you may want both general and professional liability.

Progressive Commercial experts can help match you with the right liability insurance for your business. We'll walk you through your options so you can select coverages and limits that work for you.

Workers' compensation insurance

Workers' compensation insurance covers employees who get sick or injured at work, helping with medical expenses, lost wages, and disability benefits. This coverage takes care of your staff and minimizes losses.

Commercial auto insurance

Commercial auto insurance covers you and your employees in case of accidents. Depending on the policy details, it can pay for liability, injuries, and damages. Some businesses can benefit from commercial auto insurance with add-ons or higher coverage limits. For example, cargo insurance covers the materials being transported by for-hire truckers.

Additional coverages that might benefit you

Businesses face different risks, and no one wants to pay for coverage they don't need or miss out on protection that would help them. Fortunately, there are many types of insurance tailored to specific industries and needs, such as liquor liability, cyber insurance, and excess and surplus lines insurance.

The right coverage depends on how your business works. Our team is here to help you look at your options and find a policy that fits just right.

When do I need to get business insurance?

Most small businesses need insurance. The coverages you need depend on factors like the size of your business and what your business does.

Businesses with employees usually require insurance that protects their workers, and most businesses should have general liability insurance. Whether other coverages — like professional liability or commercial auto insurance — are necessary depends on the kind of business you run.

Even when it isn't required, you should consider coverage to protect your business from risks.

Contact our experts to find the right business insurance and build a customized policy that meets your needs.