Best Business Insurance Options in 2026

Business insurance	Best for	What it generally covers
General liability insurance	Most businesses	Third-party bodily injury, property damage and certain personal/advertising injury claims
Business owner’s policy (BOP)	Many small businesses	General liability + commercial property and typically business interruption coverage
Professional liability insurance	Consultants, agencies and professionals	Claims involving errors, omissions, negligence or professional services
Workers’ compensation	Businesses with employees	Covered work-related employee injuries and illnesses
Commercial property insurance	Businesses with physical property	Buildings, equipment, inventory and other covered business property
Commercial auto insurance	Businesses using vehicles	Business-related vehicle liability and other covered vehicle losses
Cyber liability insurance	Online and technology-heavy businesses	Certain cyber incidents, data breaches and related expenses
Product liability insurance	Product sellers and manufacturers	Certain claims involving products that cause injury or property damage
Employment practices liability insurance	Businesses with employees	Certain employment-related claims
Commercial umbrella insurance	Businesses needing higher liability limits	Additional liability protection above underlying policies

The National Association of Insurance Commissioners (NAIC) identifies general liability, professional liability, commercial property, commercial auto, workers’ compensation, cyber liability and other specialized policies as important forms of coverage depending on the business.

1. General Liability Insurance

Best for: Almost every type of small business

General liability insurance is one of the first policies many small businesses consider.

It can protect a business against certain claims involving:

Bodily injury to third parties
Damage to another person’s property
Certain personal injury claims
Libel and slander
Certain advertising-related claims
Legal defense expenses for covered claims

For example, imagine a customer visits your store, slips on a wet floor and suffers an injury. A general liability policy may help with eligible medical expenses and legal costs associated with a covered claim.

The exact protection depends on the policy, exclusions, limits and applicable law.

Who should consider general liability insurance?

It can be relevant to:

Retail businesses
Restaurants
Contractors
Consultants
Freelancers
E-commerce businesses
Salons
Cleaning businesses
Real estate businesses
Event companies
Home-based businesses
Professional service companies

The SBA lists general liability insurance as one of the major types of insurance small businesses should consider.

2. Business Owner’s Policy (BOP)

Best for: Small businesses that need multiple forms of basic coverage

A Business Owner’s Policy, commonly called a BOP, bundles several types of coverage into one policy.

A typical BOP can combine:

General liability
Commercial property
Business interruption/business income coverage

The precise package varies by insurer and policy.

For eligible businesses, a BOP can be simpler than purchasing several policies separately. NAIC describes a BOP as a package that typically combines property, business interruption/continuation and liability coverage.

Who should consider a BOP?

A BOP can be particularly useful for:

Small retailers
Offices
Restaurants
Professional service companies
Home-based businesses
Small contractors
Businesses with equipment and inventory

However, not every business qualifies.

Businesses with unusual or particularly high risks may require customized commercial insurance instead of a standard BOP.

3. Professional Liability Insurance

Best for: Consultants, freelancers and professional service businesses

Professional liability insurance is sometimes called:

Errors and omissions insurance
E&O insurance
Professional indemnity insurance

It is designed for businesses that provide professional advice, services or expertise.

For example, a client might claim that:

Your advice caused financial losses.
You made a professional error.
You failed to deliver a promised service.
Your work contained an omission.
Your professional negligence caused damage.

General liability insurance generally does not replace professional liability insurance.

The NAIC specifically identifies professional liability as coverage for errors and omissions involving professional services.

Businesses that may need professional liability insurance

Examples include:

Consultants
Marketing agencies
IT consultants
Accountants
Designers
Engineers
Real estate professionals
Business coaches
Technology companies
Freelancers
Management consultants

If your business sells expertise rather than physical products, professional liability deserves particular attention.

4. Workers’ Compensation Insurance

Best for: Businesses with employees

Workers’ compensation insurance helps cover eligible work-related injuries and illnesses suffered by employees.

Depending on the applicable state system and policy, benefits can include:

Medical expenses
Rehabilitation
Lost wages
Other legally required benefits

Workers’ compensation rules vary by state, including rules concerning which employers and workers are covered.

The SBA notes that insurance requirements vary by state and that businesses should check their state requirements.

NAIC similarly notes that nearly all U.S. states require employers to carry workers’ compensation coverage in circumstances defined by state law.

Don’t assume your business is exempt

A common mistake is assuming:

“I only have one employee, so I don’t need workers’ compensation.”

That may not be correct.

Coverage requirements can depend on:

State
Number of employees
Type of business
Employee classification
Business structure
Industry

Always check the requirements applicable to your state and business.

5. Commercial Property Insurance

Best for: Businesses with offices, inventory, equipment or other physical assets

Commercial property insurance can protect eligible business property against covered losses.

Depending on the policy, covered property may include:

Equipment
Computers
Furniture
Inventory
Machinery
Business documents
Supplies
Buildings
Other business property

This can be especially important for businesses that would struggle financially if their equipment or inventory were destroyed.

The NAIC identifies business property coverage as protection for physical assets such as buildings, inventory, furniture, equipment and machinery.

6. Business Interruption Insurance

Best for: Businesses that could lose substantial revenue after a covered property loss

Business interruption insurance, also called business income insurance, can help protect against certain financial losses when a covered event forces a business to temporarily suspend operations.

For example, if a covered fire damages a business location and the business cannot operate normally while repairs are completed, business interruption coverage may help with eligible losses.

NAIC explains that business interruption coverage can help with certain lost revenue and continuing expenses following a covered event that causes physical property damage.

Business interruption coverage is often included in a BOP.

Why this coverage matters

A business can survive the loss of a computer.

It may have a much harder time surviving three months without revenue.

Businesses should therefore consider not only the cost of replacing physical property but also how a serious disruption would affect cash flow.

7. Commercial Auto Insurance

Best for: Businesses that own or regularly use vehicles for business

Personal auto insurance does not necessarily provide the protection a business needs for business-related vehicle use.

Commercial auto insurance can be relevant if your business:

Owns vehicles
Leases vehicles
Makes deliveries
Transports customers
Sends employees to job sites
Uses vehicles primarily for business operations

Examples include:

Delivery companies
Contractors
Moving companies
Landscaping businesses
Transportation companies
Construction companies
Catering businesses

The NAIC notes that commercial auto policies can have different liability limits and provisions from personal auto policies.

8. Cyber Liability Insurance

Best for: Online businesses and companies handling sensitive data

Cyber risk is increasingly relevant to small businesses.

A cyber incident can involve:

Hacking
Malware
Ransomware
Data theft
Customer information exposure
Business interruption
Cyber-related lawsuits

Cyber liability insurance can provide coverage for certain cyber-related losses, subject to the policy’s terms and exclusions.

The NAIC identifies cyber liability insurance as a specialized form of business coverage for risks involving computer systems, hackers and viruses.

Businesses that collect customer information, process online payments or depend heavily on technology should carefully evaluate whether their existing policies provide adequate cyber protection.

9. Product Liability Insurance

Best for: Businesses that manufacture, distribute, wholesale or sell products

If your business sells physical products, you may face liability claims if a product allegedly causes:

Bodily injury
Property damage
Other covered losses

Product liability insurance can help protect eligible businesses against certain product-related claims.

The SBA lists product liability insurance as coverage for businesses that manufacture, wholesale, distribute or retail products.

This can be particularly important for:

E-commerce stores
Amazon sellers
Manufacturers
Importers
Wholesalers
Food businesses
Consumer-product companies

10. Employment Practices Liability Insurance

Best for: Businesses with employees

Employment practices liability insurance, commonly called EPLI, can protect against certain employment-related claims.

Examples can include allegations involving:

Wrongful termination
Harassment
Discrimination
Failure to hire or promote
Other employment practices

General liability insurance generally does not cover these types of employee-related claims.

NAIC specifically identifies employment practices liability coverage as a separate form of protection for these risks.

As a company grows from one employee to 10, 25, 50 or more employees, EPLI may become increasingly relevant.

11. Commercial Umbrella Insurance

Best for: Businesses that need higher liability limits

Commercial umbrella insurance provides additional liability protection above certain underlying policies.

For example, a company might have liability coverage under its general liability policy but want additional protection because it has:

Significant assets
Large contracts
Many customers
Higher-risk operations
Substantial revenue
Multiple employees

NAIC notes that business umbrella liability coverage can provide additional protection above standard commercial liability policies.

How Much Does Business Insurance Cost?

There is no single business insurance price that applies to every small business.

Two companies with the same number of employees could receive dramatically different quotes because their risks are different.

Insurance pricing can depend on factors such as:

Industry
Location
Revenue
Payroll
Number of employees
Claims history
Coverage limits
Deductibles
Property value
Business activities
Vehicles
Products sold
Contract requirements
Cyber exposure

NAIC notes that liability premiums can be influenced by the type of business, sales, payroll, claims history, state laws and the risks associated with the company’s operations.

Don’t choose a policy based only on the cheapest premium

A $500 policy is not automatically better than a $1,000 policy.

You need to compare:

Premium + deductible + coverage limits + exclusions + endorsements + insurer terms

A cheap policy that excludes your biggest business risk may provide little value when you actually need it.

What Is the Cheapest Business Insurance?

For many small businesses, general liability insurance can be one of the simplest starting points.

However, “cheapest” depends heavily on the business.

A freelance writer may need relatively different coverage from:

A construction company
A restaurant
An online retailer
A medical practice
A trucking company
A software company

A home-based freelancer may also have very different property requirements from a business operating a warehouse.

The goal should therefore be:

Find the lowest reasonable cost for adequate coverage—not simply the lowest premium.

Best Business Insurance by Business Type

Business type	Insurance to investigate
Freelancer	General liability + professional liability
Consultant	Professional liability + general liability
Online store	General liability + product liability + cyber
Retail store	General liability + property + BOP
Restaurant	General liability + property + workers’ compensation + specialized coverage
Contractor	General liability + commercial auto + workers’ compensation
Technology company	General liability + professional liability + cyber
Marketing agency	Professional liability + general liability + cyber
Home-based business	BOP or appropriate liability/property coverage
Business with employees	Workers’ compensation + general liability + potentially EPLI
Property owner/landlord	Commercial property + liability and other applicable coverage
Delivery business	Commercial auto + liability + workers’ compensation

This table is a starting point, not a substitute for a business-specific insurance assessment.

Business Insurance for LLCs

One of the most common misconceptions among new entrepreneurs is:

“My LLC protects me, so I don’t need business insurance.”

An LLC can provide important legal separation between the business and its owners, but that does not mean every business risk disappears.

The SBA explains that an LLC or corporation can provide protection for personal property from lawsuits, but that protection has limits. Business insurance can help address risks that the business structure itself does not eliminate.

For an LLC, the appropriate insurance can depend on:

What the company does
Whether it has employees
Whether it owns property
Whether it provides professional services
Whether it sells products
Whether it uses vehicles
Whether contracts require insurance

Business Insurance for Freelancers

Freelancers often make the mistake of assuming they do not need insurance because they work alone.

But a freelancer can still face:

Client lawsuits
Professional negligence claims
Contract disputes
Data breaches
Property damage claims
Copyright-related disputes
Injuries involving clients or third parties

For many freelancers, the first policies worth investigating are:

General liability

Useful for certain third-party injury and property-damage risks.

Professional liability

Particularly relevant when the freelancer provides advice, expertise, design, consulting or other professional services.

Cyber coverage

Worth investigating if the freelancer stores sensitive client information or relies heavily on online systems.

Business Insurance for Home-Based Businesses

Running a business from home does not automatically mean your homeowners or renters insurance will fully cover your business.

Business equipment, inventory and business liability can have limitations under personal insurance policies.

NAIC specifically warns that personal homeowners or renters policies may not adequately cover the unique risks of a home-based business.

A home-based business may need to investigate:

A homeowners policy endorsement
General liability
Professional liability
A BOP
Business property coverage
Cyber insurance

The correct solution depends on the business.

How to Buy Business Insurance

The SBA recommends a process that starts with assessing business risks, finding a reputable licensed agent and comparing coverage and pricing.

A practical process is:

Step 1: Identify your major risks

Ask:

Could a customer get injured?
Could my product hurt someone?
Could my professional advice cause financial loss?
Could my equipment be damaged?
Could my business shut down after a disaster?
Do I have employees?
Do I use vehicles?
Do I store customer data?
Do clients require proof of insurance?

Step 2: Determine which policies apply

You may need one policy or several.

Step 3: Determine your required coverage limits

Some clients, landlords, lenders or contracts may require specific limits.

Step 4: Compare multiple quotes

Do not compare only the monthly premium.

Compare:

Coverage
Deductible
Limits
Exclusions
Additional insured provisions
Claims process
Policy endorsements
Renewal terms
Insurer financial strength

Step 5: Verify the insurer or agent

Use your state insurance regulator to verify licensing and available consumer information.

Step 6: Review your policy annually

Your insurance needs can change as your business grows.

What Documents Do You Need to Get Business Insurance?

An insurer or agent may ask for information such as:

Business name
Business address
Business structure
Industry
Business description
Annual revenue
Payroll
Number of employees
Number of contractors
Claims history
Property values
Vehicle information
Existing insurance
Contracts requiring insurance

The more accurately you describe your operations, the easier it can be to evaluate appropriate coverage.

How to Save Money on Business Insurance

You don’t necessarily have to choose between strong coverage and controlling costs.

Consider:

1. Compare multiple quotes

The SBA specifically recommends shopping around because prices and benefits can vary between insurance offers.

2. Ask about bundling

A BOP may combine several coverages and can be more efficient than buying certain policies separately for an eligible business.

3. Improve workplace safety

Risk-management measures can potentially improve your insurance profile.

4. Review your limits

Avoid paying for inappropriate limits while also avoiding dangerously low limits.

5. Review your policy every year

Revenue, payroll, equipment, employees and operations can change.

6. Avoid unnecessary duplication

Review all policies to make sure you aren’t paying for overlapping coverage while missing an important exposure.

NAIC recommends reviewing policies periodically and keeping detailed records of business property, insurance policies and losses.

What Business Insurance Does NOT Cover

Insurance policies have exclusions.

Depending on the policy, standard business insurance may not cover:

Intentional wrongdoing
Certain professional errors
Certain employee-related claims
Certain vehicle-related losses
Certain cyber incidents
Normal wear and tear
Uninsured business activities
Claims above policy limits
Excluded causes of loss

Never assume a policy covers something simply because it is called “business insurance.”

Read the exclusions.

What Is a Certificate of Insurance?

A Certificate of Insurance (COI) is a document that provides evidence of certain insurance coverage.

A client, landlord, contractor or business partner may request one before allowing you to start work.

A COI is not a replacement for the actual policy.

If a client requires particular coverage, limits or additional-insured status, make sure the actual policy satisfies those requirements.

Business Insurance for Startups

Startups often have limited cash, which can make insurance decisions difficult.

A useful approach is to prioritize risks that could financially destroy the company.

For example:

Startup consultant

→ Professional liability
→ General liability
→ Cyber coverage if appropriate

E-commerce startup

→ General liability
→ Product liability
→ Cyber coverage
→ Property coverage if inventory is stored

Construction startup

→ General liability
→ Workers’ compensation where required
→ Commercial auto
→ Equipment/property coverage

The best insurance strategy changes as the startup grows.

Frequently Asked Questions

Is business insurance required in the USA?

Some insurance may be legally required depending on the business and state. Workers’ compensation is a major example, but requirements vary by state and business circumstances. The SBA recommends checking applicable state requirements.

Do I need business insurance if I have an LLC?

Possibly. An LLC can provide certain legal protections, but it does not replace insurance. The SBA notes that the liability protection provided by an LLC or corporation has limits.

Is a BOP better than general liability insurance?

Not necessarily. A BOP generally combines multiple forms of coverage, while a general liability policy focuses primarily on liability risks. A BOP may be useful for eligible small businesses that also need property and business interruption protection.

Do freelancers need business insurance?

Many freelancers should at least evaluate whether they need professional liability and general liability coverage. The appropriate insurance depends on the services they provide and the risks involved.

Does homeowners insurance cover a home-based business?

It may provide limited protection in some circumstances, but you should not assume it provides sufficient business coverage. NAIC recommends evaluating specialized business coverage for home-based operations.

How much liability insurance should a small business have?

There is no universal amount. Consider your industry, contracts, assets, potential losses, customer exposure and the requirements of clients or landlords.

Can I change business insurance companies?

Generally, businesses can shop for alternative coverage, but the timing and cancellation terms matter. Avoid creating a coverage gap when switching policies.

Should a small business have cyber insurance?

It can be worth considering if your business depends on technology, processes payments, stores customer information or faces significant cyber exposure.

Final Verdict: What Is the Best Business Insurance for a Small Business?

There is no single “best business insurance” policy for every U.S. small business.

For many businesses, general liability insurance is an important starting point.

For eligible small businesses with property exposure, a Business Owner’s Policy (BOP) can combine several important protections.

Professional service providers should evaluate professional liability insurance, businesses with employees should understand workers’ compensation requirements, and online businesses should consider cyber risk.

The smartest approach is to start with your actual business risks rather than choosing the cheapest policy.

Quick recommendation

Freelancer: Professional liability + general liability

Retailer: BOP + product liability where applicable

Consultant: Professional liability + general liability

E-commerce business: General liability + product liability + cyber

Contractor: General liability + workers’ compensation + commercial auto

Technology company: Professional liability + cyber + general liability

Business with employees: Workers’ compensation + general liability + potentially EPLI

Home-based business: Evaluate a BOP or appropriate business-specific coverage rather than relying automatically on homeowners/renters insurance

The SBA recommends assessing your risks, working with reputable licensed insurance professionals and comparing coverage and prices before purchasing.

For 2026, the strongest strategy for a small business owner is not simply to find the cheapest insurance policy. It is to find the right combination of coverage, limits, exclusions and price for the risks your business actually faces.