Small Business Insurance Policy Information
Small Business Insurance. If you own a small business, this article will help you understand some the of most common policies available. Commercial insurance helps protect your business and potentially your personal assets from lawsuits and settlements that can reach into the millions.
Having high enough limits in your commercial liability coverage should be a cornerstone of any business plan. Carrying adequate small business insurance to protect your business shouldn't be a question - it's a must if you want to make sure that you don't get put in a position where you have to lose your business or pay money out of pocket to cover expenses associated with a loss.
Learn about small business insurance requirements, costs and coverages including: Commercial General Liability, Commercial Property Insurance, Workers Compensation, Business Owner's Policy (BOP), Errors & Omissions (professional liability), Commercial Auto Insurance and more.
Below are some answers to commonly asked small buiness commercial insurance questions:
You can skip to the following types of small business commercial insurance using these links:
Small Business Insurance General Information:
- What Are The Commercial Insurance Requirements For Small Businesses?
- How Much Does Small Business Insurance Cost?
- What Is The National Association of Insurance Commissioners?
Types Of Commercial Insurance:
- What Does Business Auto Insurance Cover?
- What Does A Business Owners Policy Cover?
- What Does Commercial Crime Insurance Cover?
- What Does Commercial General Liability Insurance Cover?
- What Does Commercial Property Insurance Cover?
- What Does Commercial Umbrella Insurance Cover?
- What Does Cyber Liability Insurance Cover?
- What Does Directors And Officers Liability Insurance Cover?
- What Does Employment Practices Liability Insurance Cover?
- What Does Equipment Breakdown Insurance Cover?
- What Does Professional Liability Insurance Cover?
- What Does Workers Compensation Insurance Cover?
What Are The Commercial Insurance Requirements For Small Businesses?
Most states on the US only require two types of commercial insurance policies - and only under specific circumstances:
- Workers Compensation: Small businesses with any non-owner employees are required by state law to have workers comp insurance coverage (except Texas).
- Business Auto: If the business owns any vehicles (titled to the business), those cars or trucks must have commercial auto insurance.
Any other policies and coverages are optional for the business to purchase. There is not one small business insurance policy that covers every risk. There are different commercial insurance policies that cover various accidents, damages and lawsuits that could financially devastate a small business without the right protection. Some of the most common risks businesses face are covered in these policies.
How Much Does Small Business Insurance Cost?
Following is a list of the main factors that determine the costs of small business insurance:
- Claims History - Similar to auto insurance, more claims can mean higher costs. If you have claims on your policy, your premium will typically increase.
- Deductibles - Like medical insurance, lower deductibles for small business insurance mean higher premiums. If you raise your deductibles (out-of-pocket costs), your premium will usually decrease.
- Employees - The more people working for your company typically translates into higher insurance costs.
- Experience - A business with more experience can often get lower premiums that newer businesses with less experience.
- Gross Sales - The more revenue you have, the higher your premium can be. So if your small business earns less than $30,000 annually, your premiums may be lower than a larger corporation that earns more than $2,000,000.
- Industry - If you own a white collar business like an accountant, your premiums can be lower than a roofing company, where the potential risks for bodily injury and property damage are higher.
- Location - Your zip code can have a significant impact on your premium. For example, if your business is located in Calistoga, your business insurance costs may be lower than a similar business located in Los Angeles or San Francisco.
- Policy Limits - When you buy a policy, you can decide how much coverage you want, and you typically will pay more for higher limits. For example, a general liability policy with a $1,000,000 limit per claim will cost more than one with a $300,000 limit.
Small Business Insurance Information By State
Click on the links below to read state specific small business insurance information, including information on types, coverages, policies, limits and more:
- Alabama Small Business Insurance
- Alaska Small Business Insurance
- Arizona Small Business Insurance
- Arkansas Small Business Insurance
- California Small Business Insurance
- Colorado Small Business Insurance
- Connecticut Small Business Insurance
- Delaware Small Business Insurance
- Florida Small Business Insurance
- Georgia Small Business Insurance
- Hawaii Small Business Insurance
- Idaho Small Business Insurance
- Indiana Small Business Insurance
- Illinois Small Business Insurance
- Iowa Small Business Insurance
- Kansas Small Business Insurance
- Kentucky Small Business Insurance
- Louisiana Small Business Insurance
- Maine Small Business Insurance
- Maryland Small Business Insurance
- Massachusetts Small Business Insurance
- Michigan Small Business Insurance
- Minnesota Small Business Insurance
- Mississippi Small Business Insurance
- Missouri Small Business Insurance
- Montana Small Business Insurance
- Nebraska Small Business Insurance
- Nevada Small Business Insurance
- North Carolina Small Business Insurance
- New Hampshire Small Business Insurance
- New Jersey Small Business Insurance
- New Mexico Small Business Insurance
- New York Small Business Insurance
- North Dakota York Small Business Insurance
- Ohio Small Business Insurance
- Oklahoma Small Business Insurance
- Oregon Small Business Insurance
- Pennsylvania Small Business Insurance
- Rhode Island Small Business Insurance
- South Carolina Small Business Insurance
- South Dakota Small Business Insurance
- Tennessee Small Business Insurance
- Texas Small Business Insurance
- Utah Small Business Insurance
- Vermont Small Business Insurance
- Virginia Small Business Insurance
- Washington Small Business Insurance
- Washington D.C. Small Business Insurance
- Wisconsin Small Business Insurance
- West Virginia Small Business Insurance
- Wyoming Small Business Insurance
Small Business Insurance Policies
small business insurance needs, costs and coverages are different for each industry and region. While not an exhaustive list, to properly protect your business against lawsuits - consider these additional policies that fall under commercial property and/or casualty insurance:
What Does Business Auto Insurance Cover?
The person injured in an auto accident may be a young child, a wage earner, a surgeon, or a homeless person. The costs of the accident may be relatively small or run into the millions of dollars, depending on the victim and his or her injuries. commercial auto insurance helps protect your business if you hurt a person or damage their property.
What Is Covered - Commercial auto insurance protects your assets in several ways:
- Covered auto liability coverage insures your legal obligations that arise from an accident, including lawsuits and their associated costs. The limits you purchase should be high enough to handle the potentially serious injuries and loss of earnings a victim may sustain.
- Uninsured and underinsured motorists coverages protect you when you are involved in an accident caused by a driver who has no insurance or insurance with relatively low limits. The limits you select for this coverage should be the same as your liability limits.
- Physical damage coverage on vehicles directly protects your assets. Comprehensive, Specific Causes of Loss and Collision are the coverage options available. Deductibles should be as high as you can comfortably absorb to maximize the protection provided relative to the premium cost.
- Medical payments coverage and towing expense costs for private passenger vehicles are other optional coverages to consider
To summarize, commercial auto is coverage for vehicles and their drivers owned by the business and/or used for business purposes, and covers these common claims:
- Physical damage
- Medical payments
- Uninsured motorists
What Does Business Owners Policy Insurance Cover?
Small business insurance offers coverage for business property and casualty exposures. Wouldn't it be great if you could get most or all of them in just one policy? If you qualify, the Business Owners Policy (BOP) may be exactly what you're looking for.
This single BOP package covers your buildings and business personal property, as well as liability imposed on you because of your premises, operations and products. In addition, it has numerous coverage extensions and optional coverages available.
Much like a general liability policy, the liability coverage offered by a BOP:
- Insures bodily injury and property damage liability and the legal obligations that arise from an occurrence. It also covers lawsuits and their associated costs. The limits of insurance selected should be high enough to handle serious claims. This coverage is subject to a number of exclusions.
- It also covers personal and advertising injury liability and related legal obligations arising from an offense as well as lawsuits and their related costs. The limits of insurance selected should be high enough to handle serious injuries and the injured party's loss of earnings. This coverage is also subject to a number of exclusions.
- Medical expenses coverage applies to medical expenses of individuals injured on your premises or due to your operations, without regard to fault.
Covered Building Property
Buildings can be more than just a single building. The structure listed and described that has a limit of insurance on the declarations is covered, along with the following:
- Additions under construction if not covered elsewhere
- Completed additions
- Indoor and outdoor fixtures
- Permanently installed machinery and equipment
- Personal property you own as a landlord in furnished apartments
- Personal property you own used to service or maintain the building or premises
Covered Business Personal Property (BPP)
Business personal property (BPP) is more than just the contents of a building. The following business personal property is covered when a limit of insurance appears on the declarations and when it is in the described building and within 100 feet of the premises or building while in the open or in or on a vehicle:
- Exterior building glass you must cover if you are a tenant
- Leased personal property you are contractually responsible to insure
- Personal property you own and use in the business
- Property of others in your care, custody, or control
- The use interest in any improvements and betterments you made or acquired if you are a tenant
To summarize, a Business Owners Policy (BOP) packages general liability and commercial property into one policy, and covers these common claims:
- Damaged Business property
- Customer injuries
- Business interruption
What Does Commercial General Liability Insurance Cover?
You don't have any control over the ultimate cost of injuries to a person injured because of your operations, products, or services. The person injured may be a toddler, a contractor, an accountant, or a homemaker. The cost of the injuries may be comparatively minor or run into the millions of dollars, depending on the person and the extent of his or her injuries. This is why you need the right amount of small business insurance.
Commercial general liability insures the bodily injury liability, property damage, and personal and advertising injury liability exposures of a variety of commercial businesses, enterprises, and ventures.
What Is Covered - general liability insurance protects your assets in several ways:
- Liability coverage for bodily injury and property damage insures your legal obligations that arise from an accident. It also includes the costs related to lawsuits and other legal proceedings. The limits of insurance should be sufficient to handle serious injuries and the injured person's loss of earnings.
- Liability coverage for damages due to personal and advertising injury insures your legal obligations that arise from an offense. It also includes the costs related to lawsuits and other legal proceedings. The limits of insurance should be sufficient to handle serious injuries and the injured person's loss of earnings.
- Medical Payments coverage pays the cost of medical care to persons injured on your premises or due to your operations, regardless of fault.
Each of these small business insurance coverages is subject to certain policy exclusions, conditions, and definitions. Following a few examples of how a CGL policy can cover third-party bodily injuries, third-party property damage, and advertising injuries;
- A visitor slips and falls on a wet floor in your restaurant.
- A tree trimmer accidentally drops a tree on a customers home.
- A competitor sues your business over an ad that was published that disparages them, damaging its reputation.
To summarize, general liability is typically required for most commercial leases, and covers these common claims:
- Damaged customer property
- Libel or slander lawsuits
- Slip-and-fall accidents
What Does Commercial Property Insurance Cover?
The primary goal of any small business insurance program is to protect the insured's real and business personal property. Tangible property usually represents a significant portion of its total assets, regardless of the size of the business.
Protecting your real and personal property is an important element of your insurance program. No matter the size of your business, a large percentage of your assets and resources are tied directly to your property. A commercial property program can provide the coverage you need if a loss should occur.Covered Building
When there is a limit of insurance for building on the declarations, the building or structure listed and described is covered property. The following is also considered covered building property:
- Additions under construction, alterations, and repairs that other insurance does not cover. The materials, equipment, supplies, and temporary structures that are on or within 100 feet of the premises and used to make the additions, alterations, or repairs are also building.
- Completed additions
- Fixtures. This includes outdoor fixtures.
- Permanently installed machinery and equipment
- Personal property the insured owns and uses to service or maintain the building or premises
Covered Personal Property
When there is a limit of insurance for personal property on the declarations, coverage applies to the following property if it is inside the building or structure at the designated premises. It is also covered if it is outside the building or structure but within 100 feet of the building or premises. Such personal property outside can be either in the open or in or on a vehicle.
- All other personal property the insured owns and uses for business
- Furniture and fixtures
- Labor, materials, or services the insured furnishes or arranges on personal property of others
- Leased personal property the insured has a contractual responsibility to insure
- Machinery and equipment
- The insured's interest in any improvements and betterments it made or acquired if the insured is a tenant
Covered Personal Property
Personal property of others is covered when there is a limit of insurance on the declarations but only when:
- It is in the insured's care, custody, or control.
- It is either inside the building or structure at the listed and described premises or outside within100 feet of the building or premises in either the open or in or on a vehicle.
- The insurance company pays for loss or damage to personal property of others for only the account of that property's owner.
To summarize, commercial property insurance covers these common claim types:
- Theft or vandalism
- Water damage (non-flood)
- Wind damage
What Does Workers Compensation & Employers Liability Insurance Cover?
Do you own, operate, or manage a business which includes at least one employee? Are you familiar with the laws of regarding workers compensation insurance coverage?
The Workers Compensation and Employers Liability Insurance Policy covers your statutory liability as an employer under workers compensation laws. It pays for medical treatment because of injuries and indemnity payments for employees disabled by work-related accidents. It also provides tort liability coverage for legal actions brought against you for bodily injuries to your employees that fall outside state workers compensation laws.
Workers' compensation is a form of insurance that protects a business owner from claims by employees who experience a work-related injury or illness-either sustained on business premises or due to business operations. Typically, workers' compensation covers the employee's medical expenses, rehabilitation costs and at least some portion of their lost wages. If an employee is killed on the job it also pays a funeral benefit.
Workers' compensation benefits are reviewed and voted on by state legislatures each year. The state department of labor has the responsibility of administering benefits for injured workers. In the case of severe injury, judges at the department of labor make rulings on the extent of disability and the amounts that insurance companies are required to pay injured workers.
There are times when the employed worker's injury is not compensable under workers compensation or occupational disease laws. In those cases, Employers Liability coverage responds to the injured worker's allegations of negligence on the employer's part, subject to its terms, conditions, limitations, and exclusions. The coverage the basic policy provides may be broadened, restricted, clarified, or made to comply with specific state regulatory requirements by using a variety of available endorsements.
To summarize, workers compensation is required if businesses has any employees, even one part-time (in most states), and covers these common claims:
- Employee medical expenses
- Lost wages
- Legal costs and fees
What Does Professional Liability Insurance Cover?
Professional liability insurance, also known as errors and omissions (E&O), is a type of liability coverage that protects your company against claims that a professional service you provided caused your client to suffer financial harm due to mistakes you made (errors) or because you didn't perform some service (omissions).
Professional liability can cover the legal costs of defending your company in a civil lawsuit and some damages if awarded, even if you haven't made a mistake. Eamp;O coverage is not included in a general liability insurance policy.
If your business:
- Provides a professional service
- Gives advice to clients
- Is contractually required to carry
you should probably purchase an errors and omissions policy. Common claims that E&O covers are negligence, misrepresentation, violation of good faith and inaccurate advice.
In the medical and legal professions, professional liability is called malpractice insurance.
To summarize, professional liability insurance helps protect professionals against liability incurred as a result of errors and omissions in performing their professional services, and covers these common claim types:
- Business disputes
- Professional negligence lawsuits
- Work errors, mistakes & oversights
What Does Commercial Umbrella Insurance Cover?
Accidents are unpredictable. Some accidents are very small. Others trigger catastrophic events in the lives of the injured parties. Are your policy limits sufficient to protect you if a person you injure must have multiple lifesaving surgeries or requires around the clock care for the rest of her life? If not, your business capital could be required to make up the difference.
Commercial liability umbrella is a stand-alone coverage that contains its own coverage, exclusions, and conditions. It provides excess limits over General Liability, Automobile Liability, Employers Liability, and other underlying liability coverage forms or policies. In addition, and because it is a stand-alone coverage form, it may include coverage that underlying coverage forms or policies do not include or provide.
To summarize, commercial umbrella is excess liability coverage that 'extends' the limits of a general liability and/or other liability policies, and offers:
- Additional general liability limits
- Additional workers comp limits
- Additional commercial auto liability limits
What Does Cyber Liability Insurance Cover?
The law in requires businesses to notify any residents when an unauthorized person accesses unencrypted personal information. Cyber liability insurance helps your business deal with the costs of data breach and recovery by helping to pay for:
- Security Breach Expense - Loss that is the direct result of a security breach.
- Extortion Threats - Loss that is the direct result of an extortion threat.
- Replacement or Restoration of Electronic Data - Loss to stored computer programs or electronic data within a computer system.
- Business Income and Extra Expense - Loss that is the result of an interruption is covered when it is a direct result of a cyber incident or extortion threat.
- Public Relations Expense - Loss that is the result of negative publicity is covered when it is a direct result of a cyber incident or security breach.
- Security Breach Liability - Loss that is the result of a claim which is discovered during the policy period is covered if the insured is legally obligated to pay it and was due to a wrongful act that takes places before the end of the policy period.
To summarize, cyber liability helps cover a business' liability for a data breach in which their customers' personal information is exposed or stolen by a hacker or criminal, and covers these common claims:
- Breach notification expenses
- Data breach lawsuits
- Fraud monitoring costs
What Does Directors And Officers Liability Insurance Cover?
Corporate directors and officers (D&O) have a duty to manage the company in their stockholders' best interests. They are bound to use due care and to be diligent in respect of the management and administration of the corporation's affairs and in the use of its property and assets. Accordingly, they are liable for losses or injuries that are caused by their breach or neglect of duty.
Recognizing the need to have competent directors and officers on executive boards, many corporations have put in their by-laws or charters certain resolutions undertaking to indemnify their directors and officers for legal expenses incurred by them in defending suits based on alleged wrongful acts in their capacities as directors and officers. Such indemnification provisions are permitted by most states' laws. Protection varies from state to state. In general, state statutes do not protect directors from claims brought by governmental agencies, or claims alleging violations of securities and exchange laws or other federal laws.
To summarize, directors and officers is a type of liability insurance that covers individuals for claims made against them while serving on a board of directors and/or as an officer, and covers these common claims:
- Side A - Protects a corporation's directors and officers when the company cannot indemnify the individuals.
- Side B - Reimburses the organization when it indemnifies the individuals, thus protecting the company's balance sheet.
- Side C- Also known as "entity coverage," this eliminates disputes of coverage allocation when both the directors and officers and the insured organization are named as co-defendants in a securities lawsuit.
What Does Equipment Breakdown Insurance Cover?
Commercial property coverage forms specifically exclude most types of equipment breakdowns while the Equipment Breakdown Protection Coverage Form Insures only equipment breakdown - which covers loss or damage to your covered property that results when covered equipment breaks down.
This coverage includes inspection service as a part of the basic coverage because you can eliminate most equipment breakdowns with proper maintenance. These inspections also satisfy any obligation you have to conduct required governmental or statutory inspections.Covered Equipment
Four types of equipment you may own or operate can be covered:
- Mechanical and Electrical Equipment
- Production Machinery
- Pressure or Vacuum Equipment
- Diagnostic Equipment
This small business insurance coverage also applies to your computer equipment, communications equipment, and equipment that generates, transmits, or uses energy.
To summarize, equipment breakdown is coverage for losses due to mechanical or electrical breakdown of nearly any type of equipment, and covers these common claims:
- Lost income
- Expenses incurred during the restoration period
- Spoiled inventory
- The cost to repair or replace damaged equipment, including labor.
What Does Employment Practices Liability Insurance Cover?
The current level of workplace morale, the state of the economy, and legislation such as the Americans with Disabilities Act and the Family Medical Leave Act have all led to a marked increase in employment-related practices claims and lawsuits. Because these legislative and other legal changes have provided significant incentives for employees to file employment-related claims, employers such as you should be more aware of your susceptibility to such actions.
Employment-Related Practices Liability Coverage provides broad insurance protection from employment-related practices claims and lawsuits that are brought against your company, managers and directors and officers. It covers such things as age and gender discrimination, sexual harassment, wrongful discipline and termination and negligent decisions involving hiring, promotion, and compensation. It also applies to breach of employment contract, employment-related emotional distress, and mental anguish, invasion of privacy, libel, and slander.
Claims can come from both current and former employees and even from job applicants you didn't hire! The procedures that you use or don't use in hiring, firing and managing your employees can translate into huge defense costs and legal awards to plaintiffs for your errors or oversights even if they were unintentional.
Allegations are made by employees who claim to have suffered various types of financial loss or emotional injury because of their employers' acts (or failure to act). The list of allegations involves wrongful termination, demoting an employee without justification, failure to hire or promote a worthy employee, unwarranted discipline or abuse (particularly sexual harassment).
Many of these offenses are said to be the result of illegal discrimination on the basis of age, gender, religion, race, nationality, or sexual orientation. Other offenses are claimed to be a violation of the individual's civil rights, or the failure to accommodate a mental or physical limitation or disability.
Sexual harassment by the employer's management or supervisory staff, or by fellow employees, has grown to include allegations of same-sex harassment. In addition to injuries involving sexual abuse, physical, mental or emotional abuses are also being claimed with more frequency.
To summarize, Employment practices liability is coverage for claims made by workers that their legal rights as employees of the company have been violated, and covers these common claims:
- Sexual harassment
- Wrongful termination
- Breach of employment contract, negligent evaluation, failure to employ or promote, wrongful discipline, deprivation of career opportunity, wrongful infliction of emotional distress, mismanagement of employee benefit plans and others.
What Does Commercial Crime Insurance Cover?
Most theft losses are comparatively small, fall under the deductible, are excluded, or are uninsured. However, larger ones can put a company out of business as quickly as an uninsured fire. small business insurance - specifically business personal property coverage forms and policies written on an All Risks or Special Causes of Loss basis usually cover theft of property and merchandise by outside parties.
However, they usually exclude losses due to employee dishonesty, theft of money and securities, computer fraud, safe burglary, extortion, and related criminal acts. This is why every business needs a sound program of crime coverages for employee theft and other types of criminal and fraudulent activities.
Types Of Coverage - The ISO Commercial Crime Coverage Form offer seven types of protection:
- Computer and Funds Transfer Fraud pays for loss or damage to money, securities, and other property fraudulently transferred using a computer from your premises or a financial institution's premises to an unauthorized person or premises. It also covers loss of funds as a direct result of fraudulent instruction to a financial institution telling it to transfer, pay, or deliver funds from your transfer account.
- Employee Theft covers loss or damage to money, securities, and other property that one or more of your employees causes.
- Forgery or Alteration covers loss caused when someone other than an employee forges or alters a negotiable instrument such as a check.
- Inside the Premises–Robbery or Safe Burglary of Other Property pays for loss or damage to property other than money and securities inside the premises. However, this is subject to the conditions that either you or an employee must be robbed or the safe burglarized.
- Inside the Premises–Theft of Money and Securities pays for theft, disappearance, and destruction of money and securities from inside your premises or a financial institution premises. However, it does not cover theft of merchandise or stock.
- Money Orders and Counterfeit Money pays for loss as a direct result of you or your employees accepting fraudulent money orders or counterfeit money in good faith and in exchange for merchandise, money, or services.
- Outside the Premises pays for loss of money or securities outside the premises, in the care of a messenger or armored car service, or as a direct result of theft, disappearance, or destruction. It also pays for loss or damage to property other than money and securities as a direct result of robbery outside the premises that is in the care of a messenger or armored car service.
To summarize, commercial crime insurance is coverage for any dishonest acts of your employees including damage to your property, fraud or theft of a customer's property, and covers these common claims:
- Employee dishonesty
- Forgery or alteration
- Money and securities
- Theft of client's property
What Is The National Association of Insurance Commissioners?Executive Office
444 North Capitol Street NW
Washington, DC 20001
The National Association of Insurance Commissioners (NAIC) is the U.S. standard-setting and regulatory support organization created and governed by the chief insurance regulators from the 50 states, the District of Columbia and five U.S. territories. Through the NAIC, state insurance regulators establish standards and best practices, conduct peer review, and coordinate their regulatory oversight.
NAIC staff supports these efforts and represents the collective views of state regulators domestically and internationally. NAIC members, together with the central resources of the NAIC, form the national system of state-based insurance regulation in the U.S.
According to the NAIC, "The mission of the NAIC is to assist state insurance regulators, individually and collectively, in serving the public interest and achieving the following fundamental insurance regulatory goals in a responsive, efficient and cost effective manner, consistent with the wishes of its members:
- Protect the public interest;
- Promote competitive markets;
- Facilitate the fair and equitable treatment of insurance consumers;
- Promote the reliability, solvency and financial solidity of insurance institutions; and
- Support and improve state regulation of insurance."
Small Business Insurance - The Bottom Line
Speak with an experienced insurance broker who understands small business insurance to find the best fit coverage for your business.
Types Of Small Business Insurance - Requirements & Regulations
Perhaps you have the next great idea for a product or service that you know will appeal to your local area. If you've got a business, you've got risks. Unexpected events and lawsuits can wipe out a business quickly, wasting all the time and money you've invested.
Operating a business is challenging enough without having to worry about suffering a significant financial loss due to unforeseen and unplanned circumstances. Small business insurance can protect your company from some of the more common losses experienced by business owners, such as property damage, business interruption, theft, liability, and employee injury.
Purchasing the appropriate commercial insurance coverage can make the difference between going out of business after a loss or recovering with minimal business interruption and financial impairment to your company's operations.
Insurance is so important to proper business function that both federal governments and state governments require companies to carry certain types. Thus, being properly insured also helps you protect your company by protecting it from government fines and penalties.
Small Business Insurance Information
In the business world, there are many risks faced by company's every day. The best way that business owners can protect themselves from these perils is by carrying the right insurance coverage.
The The National Association of Insurance Commissioners (NAIC) is the U.S. standard-setting and regulatory support organization. Through the NAIC, state insurance regulators establish standards and best practices, conduct peer review, and coordinate their regulatory oversight.
Commercial insurance is particularly important for small business owners, as they stand to lose a lot more. Should a situation arise - a lawsuit, property damage, theft, etc. - small business owners could end up facing serious financial turmoil.
According to the SBA, having the right insurance plan in place can help you avoid major pitfalls. Your business insurance should offer coverage for all of your assets. It should also include liability and casual coverage.
Types Of Small Business Insurance
Choosing the right type of coverage is absolutely vital. You've got plenty of options. Some you'll need. Some you won't. You should know what's available. Once you look over your options you'll need to conduct a thorough risk assessment. As you evaluate each type of insurance, ask yourself:
- What type of business am I running?
- What are common risks associated with this industry?
- Does this type of insurance cover a situation that could feasibly arise during the normal course of doing business?
- Does my state require me to carry this type of insurance?
- Does my lender or do any of my investors require me to carry this type of policy?
A licensed insurance agent or broker in your state can help you determine what kinds of coverages are prudent for your business types. If you find one licensed to sell multiple policies from multiple companies (independent agents) that person can often help you get the best insurance rates, too. Following is some information on some of the most common small business insurance policies:
|Business Insurance Policy Type||What Is Covered?|
|General Liability Insurance||What is covered under commercial general liability insurance? It steps in to pay claims when you lose a lawsuit with an injured customer, employee, or vendor. The injury could be physical, or it could be a financial loss based on advertising practices.|
|Workers Compensation Insurance||What is covered under workers compensation insurance? This type of insurance protects a business and its owner(s) from claims by employees who suffer a work-related injury, illness or disease. Workers comp typically provides the injured employee with benefits to cover medical expenses, a portion of his/her lost wages, rehabilitation costs if applicable, and permanent partial or permanent total disability.|
|Product Liability Insurance||What is covered under product liability insurance? I pays an injured party's settlement or lawsuit claim arising from a defective product. These are usually caused by design defects, manufacturing defects, or a failure to provide adequate warning or instructions as to how to safely use the product.|
|Commercial Property Insurance||What is covered under business property insurance? General liability policies don't cover damages to your business property. That's what commercial property insurance is for. It protects all of the physical parts of your business: your building, your inventory, and your equipment, giving you the funds you need to replace them in the event of a disaster. If you work from home, you might consider a Home Based Business Insurance policy instead.|
|Business Owners Policy (BOP)||What is covered under a business owners policy (BOP)? This is a policy designed for small, low-risk businesses. It simplifies the basic insurance purchase process by combining general liability policies with business income and commercial property insurance.|
|Commercial Auto Insurance||What is covered under business auto insurance? This type of insurance covers automobiles being used for business purposes. This could include a fleet of business-only vehicles or a single company car. In some cases it might cover your car or your employee's car while they're being used for business. These policies have much higher limits, ensuring you can cover your costs if one of these vehicles gets into an accident.|
|Commercial Umbrella Policies||What is covered under commercial umbrella insurance? This type of policy is a sort of "gap" insurance. It covers your liability in the event that a court verdict or settlement exceeds your general liability policy limits.|
|Liquor Liability Insurance||What is covered under liquor liability insurance? It covers bodily injury or property damage caused by an intoxicated person who was served liquor by the policy holder.|
|Professional Liability (Errors & Omissions)||What is covered under professional liability insurance? This type of business insurance is also known as malpractice oe E&O. It covers the damages that can arise from major mistakes, especially in high-stakes professions where mistakes can be devastating.|
|Surety Bond||What is covered under surety bonds? Bonding is a contract where one party, the SURETY (who assures the obligee that the principal can perform the task), guarantees the performance of certain obligations of a second party, the PRINCIPAL (the contractor or business who will perform the contractual obligation), to a third party, the OBLIGEE (the project owner who is the recipient of an obligation).|
Who Needs General Liability Insurance? - Virtually every business. A single lawsuit or settlement could bankrupt your business five times over. You might also need this policy to win business. Many companies and government agencies won't do business with your company until you can produce proof that you've obtained one of these policies.
Business Insurance Required by Law
If you have any employees most states will require you to carry worker's compensation and unemployment insurance. Some states require you to insure yourself even if you are the only employee working in the business.
Your insurance agent can help you check applicable state laws so you can bring your business into compliance.
Other Types Of Small Business Insurance
There are dozens of other, more specialized forms of small business insurance capable of covering specific problems and risks. These forms of insurance include:
- Business Interruption Insurance
- Commercial Flood Insurance
- Contractor's Insurance
- Cyber Liability
- Data Breach
- Directors and Officers
- Employment Practices Liability
- Environmental or Pollution Liability
- Management Liability
- Sexual Misconduct Liability
Whether you need any or all of these policies will depend on the results of your risk assessment. For example, you probably don't need an environmental or pollution policy if you're running an IT company out of a leased office, but you would need data breach and cyber liability policies to fully protect your business.
Also learn about small business insurance requirements for general liability, business property, commercial auto & workers compensation including small business commercial insurance costs. Call us (855) 767-7828.
Small Business Insurance By Industry And/Or Type
Select the general industry or small business insurance type link below to find more detailed information on coverage, costs, exclusions and more:
- Advertising, Marketing and Media
- Arts and Recreation
- Auto Sales, Service And Repair
- Children And Pets
- Commercial Property
- Construction Contractors
- Contractors And Home Improvement
- Education, Colleges, Universities And Schools
- Financial Institutions
- Food And Drink
- Health And Beauty
- Information Technology And Internet
- Local, State And Federal Government
- Lodging Places
- Marine, Boat And Watercraft
- Medical And Dental
- Professional Services
- Real Estate
- Small Business Commercial Auto
- Small Business Insurance
- Sports And Fitness
- Warehouse And Storage
- Wholesale And Distribution
- Workers Compensation
Advertising, Marketing and Media
Learn about media liability insurance - a specialized form of professional liability insurance policy that provides protection for legal claims brought by third parties.
- Advertising Agency
- Book Publishers
- Call Center
- Direct Mailing Services
- Graphic Arts
- Graphic Designers
- Magazine Publishers
- Market Research Firm
- Marketing Consultant
- Podcast Insurance
- Printers & Publishers
- Public Relations
- Radio Stations
- Search Engine Services SEO
- Social Media Consultant
- Television Stations
Learn about small business agribusiness insurance - a type of commercial insurance protects farmers against loss of, or damage to crops or livestock.
- Aquaculture Fish Farm
- Commercial Fishermen
- Dairy Farm
- Equine & Horse Farm
- Farm And Ranch
- Farm Equipment Dealers
- Farm Labor Contractors
- Livestock & Cattle
- Mushroom Farms
- Nursery And Greenhouse
- Nut Farm
- Orchards & Groves
- Poultry Farm
- Sheep & Goat Farm
- Swine, Hog & Pig Farm
- Tobacco Farm
Arts and Recreation
Read up on small business arts and recreation insurance.
- Amusement Parks
- Archery Ranges
- Athletic Fields
- Billiard And Pool Halls
- Bowling Alleys
- Cave Tours
- Dance Studio
- Disc Jockey DJ
- Drive-In Theaters
- Entertainers And Performers
- Event Planning
- Fairs And Fairgrounds
- Film Production
- Fine Art
- Guides & Outfitters
- Handball & Racquetball Courts
- Horse & Dog Racetracks
- Indoor Sports Complexes
- Interior Decorator
- Interior Design
- Motorsports Racetracks
- Photo Booth
- Recording Studio
- Recreation Centers
- Riding Stables
- Roller Skating Rinks
- Shooting Ranges
- Skeet & Trap Shooting Ranges
- Ski Resorts
- Talent Agency
- Tennis Centers
- Video Arcades
- Wedding And Special Event
Auto Sales, Service And Repair
Read about auto sales, service & repair insurance, which provides protection for damages done to customers vehicle's and other property as well as injuries resulting from the work done.
- Auto Dealers
- Auto Detailing & Mobile Car Wash
- Auto Dismantlers
- Auto Garage
- Auto Glass Repair Shops
- Auto Paint Shops
- Auto Service Repair
- Auto Supply Parts Store
- Car Rental
- Car Wash
- Gas Station
- Motorcycle Dealers
- Parking Lot
- RV Dealers
- Snowmobile Dealers
- Truck Rental
- Used Car Dealer
Learn about aircraft and aviation liability insurance - a specialized form insurance that provides coverage for hull losses as well as liability for passenger injuries, environmental damage and third-party damage caused by aircraft accidents.
- Aerial Applicators
- Flight Schools
- Hot Air Balloon
- Unmanned Aerial Vehicles (UAV) Drone
Learn about surety and fidelity bonds which are types of insurance that are used to protect against damage or loss in commercial transactions.
Children And Pets
Discover what business insurance policies cover for children and pet related small businesses.
Read up on commercial property insurance coverage, including how business property insurance protects your company's building's and/or their contents from damage, destruction, theft and vandalism.
- Apartment Building
- Business Interruption
- Commercial Flood Insurance
- Commercial Property
- Condo Association
- Duplex Rental Property
- Equipment Breakdown Protection Insurance
- Homeowners Association Insurance
- Inland Marine
- Manufacturing And Mercantile Rental Property
- Mobile Home Park
- Non-Residential Building Operators
- Office Buildings
- Shopping Center & Strip Mall
- Vacant Land
- Vacant Property
Learn about construction contractors insurance, including how much the premium costs and what is covered - and how liability insurance can help protect your construction business from lawsuits.
- Blasting & Drilling Contractors
- Bridge Contractors
- Building Contractors
- Cable Layers
- Construction Contractors
- Demolition Contractors
- Dock & Pier Contractors
- Dredging Contractors
- Excavation Contractors
- Foundation Layers
- Framing Contractors
- General Contractors
- Masonry Contractors
- Mechanical Contractors
- Millwright Contractors
- Paving Contractors
- Road Contractors
- Roofing Contractors
- Sewer Contractors
- Steel Erection Contractors
Contractors And Home Improvement
Learn about contractor's insurance, including what it covers, how much it costs - and how business insurance can help protect your small business from lawsuits.
- Air Conditioning Systems Installation Repair
- Appliance Repair & Service
- Blacksmith & Metal Workers
- Boat Repair & Dry Docks
- Boiler Contractors
- Builders Risk
- Building Cleaning & Maintenance Services
- Cabinet Installer
- Cable And Satellite TV Installer
- Chimney Sweep
- Cistern Contractors
- Contractor Liability
- Curtain Cleaners
- Deck Builders
- Dryer Vent Cleaning
- Door And Window Installers
- Drywall Contractor
- Electrical Contractors
- Environmental Remediation Contractors
- Fence Installation
- Fire Sprinkler Contractor
- Fire & Water Restoration Contractors
- Flooring Contractor
- Furniture Repair
- Garage Door Installer And Repair
- Glass Contractor
- Gutter Installation And Repair
- House Cleaning
- HVAC Contractor
- Insulation Contractor
- Janitorial Cleaning Services
- Lawn Care
- Lawn Irrigation Sprinkler System Installation
- Oil And Gas Well Drilling Contractors
- Paperhanging Contractors
- Plastering And Stucco Contractor
- Pressure Washing Contractors
- Propane And Fuel Dealers
- Rug, Upholstery & Carpet Cleaning
- Sandblasting Contractors
- Security Alarm
- Septic Tank Cleaning
- Siding Contractor
- Sign Installation & Repair
- Solar Panel Installers
- Snow Plow
- Stone And Tile Installer
- Swimming Pool Contractor
- Swimming Pool Service And Maintenance
- Tank Cleaners
- Tool Grinding And Repair
- Tree Surgeon
- Tree Trimming
- Upholstery Shop
- Waste Haulers & Garbage Collection
- Water Well Drilling
- Welding Contractor
- Wildlife & Pest Control
- Window Cleaning
Education, Colleges, Universities And Schools
Learn about insurance for educators that helps protecting your professional reputation and other legal liabilities arising from your educational services.
- Art School
- Beauty School
- Charter School
- Chiropractic Schools
- Colleges, Universities & Professional Schools
- Driving Schools
- Educational Services
- Language School
- Music Schools
- Private Schools
- Real Estate School
Discover the types of commercial insurance that banks, finance companies and other financial institutions need to protect their asset management, deposit, lending, investment and other operations.
- Check Cashing
- Credit Union
- Currency Exchanges
- Finance Companies
- Insurance Company
- Mortgage Broker
Food And Drink
Learn about restaurants, bars, liquor stores insurance coverages. See how food service insurance help protect against accidents, oversights and lawsuits resulting from business operations.
- Bagel Shop
- Beer Distributor
- Coffee Shop
- Concession Stand
- Farmers Market
- Grocery Store
- Ice Cream Shop
- Internet Cafe
- Liquor Liability
- Liquor Store
- Sandwich Shops
Health And Beauty
Learn about small business health and beauty insurance coverages that help protect tattoo artists, salons, spas, estheticians, cosmetologists, barbers, hairdressers, nail salons and more from legal liability.
- Barber Hair Dresser
- Beauty Salon
- Day Spa
- Diet Nutrition Services
- Massage Therapy
- Medical Spa
- Nail Salon
- Permanent Cosmetics And Microblading
- Personal Trainer
- Tanning Salon
- Weight Loss Center
Information Technology And Internet
Learn about IT technology insurance policies that help protect IT businesses, consultants & subcontractors from the unique risks that small tech businesses face when they work.
- Application Development
- Amazon Seller
- Artificial Intelligence
- Computer Electronic Repair
- Computer Programming
- Computer System / Network Developer
- Cyber Liability
- Data Breach
- eBay Sellers
- Electronic Data Processing
- Electronic Data Processing Equipment
- Internet Business
- Internet Service Provider
- IT Consultant
- Online Store
- Social Media
- Software Developer
- Technology Services
- Website Design
Local, State And Federal Government
Discover what types of commercial insurance government entities need.
- County Administration Offices
- Fire Departments
- Government Buildings
- Law Enforcement Entities
- Public Buildings
Find out what types of business insurance that hotels, motels and other lodging places should have to protect their varied operations.
Learn all about manufacturing insurance. Manufacturers face many unique risks such as product liability and/or product recall exposures due to the nature of their business operations.
- 3D Printing
- Audio & Video Equipment
- Auto Parts
- Bottling Plants
- Brooms & Brushes
- Camping Equipment
- Canned Fruit & Vegetables
- Canvas Products
- CBD Oil And Hemp
- Clock & Watch
- Commercial Air Conditioning
- Commercial Electronics
- Communications Equipment
- Construction Equipment
- Cork Products
- Dairies & Creameries
- Down And Feather Products
- Dry Ice
- Dyes & Pigments
- Electronic Toys & Games
- Exercise Equipment
- Farm Equipment
- Feed & Grain
- Flavoring Extracts
- Frozen Foods
- Fruit Juice
- Fur Garment
- Garage Door
- Gypsum Products
- Ice Cream
- Iron & Steel Foundries
- Lawn Mowers
- Leather Apparel
- Lighting & Wiring
- Lumber & Wood Products
- Machine Shop
- Major Electrical Appliances
- Marijuana Products
- Mattresses & Box Springs
- Metal & Plastic Furniture
- Metal Heat Treating
- Metal Toys
- Musical Instruments
- Nonferrous Foundries
- Ornamental Metalwork
- Paper & Allied Products
- Pet Food
- Plastic & Rubber Toys
- Plastic Goods
- Plastics Molding, Forming & Extruding
- Product Liability
- Psychedelic Drugs
- Pulp & Paper Mills
- Residential Air Conditioning & Heating
- Rubber Goods
- Sawmills & Planing Mills
- Screw Machine Products
- Sheet Metal
- Soap & Detergent
- Small Electrical Appliances
- Sporting Goods
- Stone Products
- Textiles Finishing & Coating
- Tool & Die Shops
- Vegetable Juice
- Vending Machines
- Wire Rope
- Wood Furniture
- Writing Instruments
Marine, Boat And Watercraft
Learn about marine, boat and watercraft insurance - a specialized form insurance that provides coverage for hull losses, cargo losses as well as liability for passenger injuries, environmental damage, and third-party damage caused by watercraft accidents.
- Boat Dealers
- Boat Repair & Dry Docks
- Dock & Pier Contractors
- Dredging Contractors
- Ocean Marine
- Ship Chandlers
- Boat & Watercraft Insurance
Medical And Dental
Discover small business insurance for medical and dental professionals. Medical malpractice insurance is a type of professional liability policy that protects health care professionals from liability causing in bodily injury, medical expenses and property damage.
- Ambulatory Surgical Center
- Art Therapy
- Assisted Living Facilities
- Blood Banks
- Dental Lab
- Dental Office
- Diagnostic Imaging Centers
- Health Maintenance Organizations
- Healthcare Facilities
- Home Medical Equipment Dealers
- Marriage & Family Therapy
- Medical Clinics
- Medical Laboratories
- Medical Marijuana Dispensary
- Medical Practice
- Medical, Surgical & Hospital Supply Store
- Mental Health Counseling
- Nurse Registry
- Occupational Therapy
- Osteopathic Physicians
- Physicians Office
- Plastic Surgeons
- Skilled Nursing Facility
- Speech Therapy
- Substance Abuse Counseling
- Telemedicine Business Insurance
Find informative articles on miscellaneous businesses including the types of insurance policies and coverage they need, costs and other considerations.
- Adult Daycare
- Agriculture, Forestry, Fishing & Hunting
- Bail Agent
- Control of Well
- Electric Utilities
- Employment / Staffing Agency
- Engraving Business
- Facility Support Services
- Mail Order
- Oil And Gas Lease
- Personal Concierge
- Photofinishing Lab
- Private Water Districts
- Process Server
- RV Parks & Campgrounds
- Security Guards
- Waste Disposal Landfill
- Wedding Planner
Find useful articles on business insurance for non-profit 501(c)(3) organizations, charities and associations.
- Animal Shelter & Pet Rescue
- Classic & Collector Car Clubs
- Fraternal Organization
- Goodwill Industries
- Labor Union
- Parent Teacher Organization
- Public Administration
- Red Cross Chapters
- Salvation Army
- Social Work Services
- Veterans Groups
- Volunteers of America
- Youth Groups
Get informed about professional services insurance, including Professional liability, aka errors and omissions (E&O insurance), that protects your small business against claims that a professional service you provided caused your client financial loss.
- Answering Service
- Armored Car
- Attorney Lawyer
- Background Music Services
- Business Consulting
- Chemical Engineers
- Civil Engineers
- Claims Adjuster
- Commercial Laundries
- Commodity Broker
- Corporate Wellness
- Court Reporter
- Credit Bureaus
- Debt Collection Agency
- Detective Agency
- Diaper Services
- Electrical Engineering
- Environmental Consultant
- Executive, Career & Life Coaching
- Executive Search Firm
- Expert Witness
- Financial Planner
- Financial Services
- Funeral Directors
- HR Consultant
- Inspection Bureaus
- Insurance Agents & Brokers Insurance
- Mediator - Arbitrator
- Medical Billing
- Music, Drama & Dance Therapy
- Office Machine Repair & Maintenance
- Piano Tuners
- Project Management
- Safety Consultants
- Speakers Bureaus
- Temporary Staffing
- Tax Preparer
- Title Abstractors
- Valet Parking
Learn about real estate insurance coverages including liability and commercial property policies for realtors, mortgage companies and more.
Read valuable retail insurance policy information. In a retail business, you need to have the right type of business insurance coverage so that your store, employees, and inventory are protected.
- Adult Novelty
- Antique Dealers
- Appliance & Electronics Store
- Army Navy Surplus Stores
- Art Dealers
- Art Gallery
- Arts & Crafts Supply Stores
- Bicycle Shop
- Boat Dealers
- Book Store
- Bridal Shop
- Candy Confectionery Store
- Carpet Store
- Cell Phone Stores
- Clothing Store
- Collectibles Memorabilia Store
- Consignment Stores
- Convenience Store
- Cosmetics Store
- Costume Stores
- Dry Cleaning
- Embroidery Services
- Equipment Rental
- Fabric Stores
- Fish Markets
- Flea Markets
- Funeral Home
- Furniture Store
- Gift Store
- Greeting Card Stores
- Hardware Store
- Harness & Saddle Shops
- Home Improvement Store
- Infant, Baby & Children's Clothing Stores
- Jewelry Store
- Lamp Stores
- Lingerie Store
- Luggage Store
- Meat Market & Butcher Shop
- Men's Clothing Stores
- Music Store
- Office Supply Store
- Paint & Wallpaper Store
- Pawn Shop
- Pet Store
- Pharmacy Liability
- Plumbing Supplies Fixtures Store
- Poultry Dealers
- Rent To Own Stores
- Scrap Metal Dealers
- Sewing Store
- Shoe Store
- Sporting Goods Store
- Stationary Store
- Thrift Store
- Ticket Agency
- Tire Store
- Tobacco Store
- Toy Store
- Travel Agency
- Trophy Stores
- Tuxedo And Formal Wear Rental Store
- Vending Machine Operators
- Wig Store
- Women's Clothing Stores
Small Business Commercial Auto
Learn about commercial auto insurance which includes liability and physical damage protection for vehicles that are used for business purposes.
- Amazon Delivery Drivers
- Ambulance Services
- Big Rig Truck
- Bobtail Non-Trucking Liability
- Charter And Tour Bus
- Commercial Auto
- Commercial Auto Liability
- Commercial Van
- DoorDash, GrubHub & Uber Eats Drivers
- Dump Truck
- Food Truck
- Freight Forwarder
- Household Goods Moving
- Motor Truck Cargo
- Non-Owned And Hired Auto Liability
- Owner Operator
- Pizza Delivery
- Tow Truck
- What Does Commercial Auto Physical Damage Insurance Cover?
Small Business Insurance
Protect your company and employees with insurance coverage. Read informative articles on small business insurance policies - and how they can help shield your company from legal liabilities.
- Small Business
- Business General Liability
- Business Interruption
- Business Liability
- Business Owners Policy (BOP)
- Certificate of Insurance
- Commercial Auto
- Commercial Crime
- Commercial Electric Vehicle Insurance
- Commercial Package Policy
- Commercial Umbrella
- Comprehensive General Liability
- Directors and Officers Liability
- Cyber Liability
- Employment Practices Liability
- Event Cancellation
- Fiduciary Liability
- General Liability
- Home Based Business
- Independent Contractor
- Liability Insurance Certificate
- Liability Insurance
- Ocean Marine
- Professional Liability
- What Are Businessowners Policy Insurance Endorsements?
- What Are Commercial General Liability Insurance Endorsements?
- What Are Workers Compensation Insurance Endorsements?
Sports And Fitness
Learn about sports & fitness insurance policies and what they cover so that your customers, employees, and equipment are protected.
- Golf Course & Country Club
- Gym Fitness
- Hole-In-One Insurance
- Ice Skating Rinks
- Martial Arts
- Professional Sports
- Sports Team
- Swim Clubs
- Yoga Teacher
Warehouse And Storage
Learn about warehouse and storage insurance - which protects storage and warehouse facilities and protects their inventory from property damage from fire and weather, vandalism and theft and liability coverage as well.
Wholesale And Distribution
Read informative articles on wholesale distribution insurance. Distributors and wholesalers face specific risks including fire, flood and weather damage that can destroy products in the distribution center - and every part of the supply chain including late supplier shipments to unpaid invoices - can effect the entire operation.
- Air Conditioning And Heating
- Audio And Video Equipment
- Beer & Ale
- Cameras & Musical Instruments
- CDs, DVDs And Videos
- Dairy Products
- Dry Goods
- Electrical Appliances
- Electrical Equipment
- Electrical Supplies
- Electronic Equipment
- Greeting Cards
- Importer & Exporter
- Liquor Wholesaler
- Manufacturers Representative
- Motion Picture
- Plate Glass
- Plumbing Supplies
- Restaurant Equipment
- Roofing Materials
- Seed Merchants
- Theatrical Supplies
- Wholesale Florist
- Wholesaler Distributor
Learn about workers compensation insurance - a policy provides medical, wage and other benefits to employees who are injured or become ill at work.
- Employers Liability
- What Are Workers Compensation Insurance Endorsements?
- Workers Compensation Class Codes
- Workers Compensation Insurance
- Workers Compensation Insurance Laws
Small Business General Liability Insurance Information
Additional Resources For Small Business Insurance
Your small business faces many potential disasters including: fire, floods, theft, equipment breakdown, lawsuits from clients or customers and current & former employees. Any many other risks you haven't even thought about.
A small business commercial insurance program should provide protection for both larger and smaller disasters. The obvious things like fire, flood and theft most business owners think about... but what if a hacker infects your computers with a virus - and files containing private customer information like credit card and Social Security numbers are stolen?
Who is going to pay to fix your customers credit rating etc...? Will your insurance pay for the cost? You need to know that.
Your commercial insurance program should cover events that can close down your company, or cause it to lose revenue. Anything less than that is not enough coverage. Commmercial insurance doesn't cover everything, and all policies have exclusions and limits.
You need a written plan that allows you to get your operations back up and running as quick as possible.