Business Tool

Business Insurance 101 – What You Need and How to Choose the Right Coverage

No one starts a business thinking about what could go wrong. But smart entrepreneurs know that protecting your time, your money, and your peace of mind is just good business. That’s where insurance comes in!

Business insurance isn’t just for construction companies and doctors, it’s for Etsy shop owners, consultants, online coaches, photographers, and everyone in between.

Here’s what you need to know about the different types of business insurance and how to pick the right coverage for your business!

Why Business Insurance Matters (Even If You’re Just Starting Out)

Even if you’re small, accidents can still happen. A slip-and-fall in your home office, a fire that damages inventory, or a client who claims your advice caused financial harm are REAL risks!

Without insurance, you could be personally on the hook!

Business insurance helps you:

Cover unexpected costs from accidents, injuries, or lawsuits
Comply with lease, client, or licensing requirements
Protect your income and assets during emergencies
Sleep better at night (for real)

1. General Liability Insurance (A Must for Almost Everyone)

This is the most basic and widely recommended type of business insurance. It covers things like:

Bodily injury (a customer slips on your property)
Property damage (you accidentally damage a client’s laptop)
Legal fees from claims or lawsuits

Best for: All businesses, from freelancers to storefronts. Many clients or landlords require it.

2. Professional Liability (aka Errors and Omissions Insurance)

If you give advice, offer services, or create content, this one’s for you! It covers claims related to:

Negligence or mistakes
Missed deadlines or deliverables
Financial loss caused by your services

Best for: Coaches, consultants, designers, therapists, accountants, marketers, realtors, notaries, and anyone selling expertise.

3. Business Owner’s Policy (BOP)

A BOP bundles general liability and property insurance into one easy policy, usually at a lower cost than buying separately! It covers:

General liability
Commercial property (equipment, tools, inventory)
Business interruption (loss of income after a disaster)

Best for: Brick-and-mortar shops, salons, cafes, and service-based businesses with physical assets.

4. Workers’ Compensation Insurance

If you have employees, this one’s often legally required! It covers:

Medical expenses if an employee gets hurt on the job
Lost wages during recovery
Legal costs if they sue

Best for: Any business with W-2 employees. Requirements vary by state.

5. Cyber Liability Insurance

If you collect customer data or accept payments online, cyber insurance helps protect against:

Data breaches
Hacks and ransomware
Identity theft and recovery costs

Best for: E-commerce businesses, SaaS companies, virtual service providers, and anyone with an online presence.

6. Product Liability Insurance

If you sell physical goods, this insurance protects you from claims related to product defects or harm caused by your product!

Best for: Product-based businesses, including handmade items, resellers, and manufacturers.

How to Pick the Right Policy (Without Getting Overwhelmed)

Ask yourself:

Do I sell a product, a service, or both?
Do clients visit my space?
Do I collect personal or financial info online?
Do I work with sensitive data or give advice?
Do I have employees or subcontractors?

Then:

Get a few quotes from small-business-friendly providers like NEXT, Hiscox, or Thimble.
Work with an insurance broker who specializes in small businesses (your accountant may know someone).
Read the policy. Ask questions. Make sure you understand coverage limits, exclusions, and deductibles.

Insurance isn’t just a safety net, it’s a smart business tool! The right coverage protects your time, reputation, and future earnings, so you can keep building your dream without worrying about the what-ifs!

Set it up early, review it yearly, and get back to doing what you do best: running your business! Need some suggestions? Myles Ink can help you!

Sources:

SBA – Business Insurance

Hiscox Small Business Insurance Guide

NEXT Insurance

Thimble Insurance