Best small business insurance companies for August 2024

Small business insurance coverage, tailored to the needs of the company it covers, can take that burden off a business owners’ shoulders and protect them from financial risk due to theft, fire or lawsuits.

There are many companies offering small business insurance in the U.S. Here, we review some of the top providers.

Our picks for small business insurance

Best for ease of use: NEXT Insurance

Next Insurance

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Next Insurance

Am rating

A-

Available coverages

BOP, commercial auto, commercial property, cyber insurance, errors and emissions (E&O), general liability and workers’ compensation

NEXT Insurance offers online quotes for coverages including BOP, commercial auto, commercial property, cyber insurance, errors and omissions (E&O), general liability and workers’ compensation. The company was not included in J.D. Power’s 2023 Small Business Insurance Satisfaction rankings. It has an A- rating from AM Best.

As an insurtech company, NEXT invests heavily in technology to improve underwriting, claims handling, customer service and other operations and features a user-friendly web experience. It also offers coverage packages tailored to the needs of small businesses ranging from contractors to retail to fitness providers and even Amazon sellers. Customers can download certificates of insurance through the website or the company’s app.

NEXT is not sold through agents. However, the company recently announced a partnership with Allstate that seems to hint at possible availability through that company’s agent network in the near future.

Best for companies that do business internationally: Chubb

As one of the largest insurers in the United States, Chubb notes that it offers “tailored policies for hundreds of professions.” The company offers a variety of insurance products for small businesses, including BOP, cyber insurance, general liability, umbrella and workers’ compensation. Chubb also offers a foreign package for companies that do business outside of the U.S.

The company provides online quotes, along with useful information to help business owners think through their coverage needs. Customers can report a claim online as well. The company is also supported by a network of agents.

Best for loss control services: Cincinnati

Cincinnati offers a wide range of business coverages, including business auto, business liability, business property, cyber risk, inland marine, professional liability, umbrella and workers’ compensation. The company also offers a range of personalized loss control services to help businesses minimize risks and avoid claims.

Cincinnati does not offer quotes online (though it does offer compelling reasons why you should work with an agent when buying insurance). And while the company may not be as recognizable as some larger brands, it does offer coverage in 46 states and ranked third out of 13 companies in J.D. Power’s most recent small business insurance customer satisfaction rankings.

Best for building and construction: Farmers

Farmers offers business coverages such as business auto, crime, liability, property, umbrella and workers’ compensation. Farmers offers a coverage package tailored to the needs of builders, plumbers, electricians, landscapers and other contractors.

Get a quote either online, by phone or through a local agent. Farmers has an A rating from AM Best and was ranked No. 4 on the business insurer list by J.D. Power.

Best for customer satisfaction: Nationwide

Another well-known insurance brand, Nationwide offers a wide range of coverage types for businesses. These include BOP, builder’s risk, business income, business liability, commercial property, crime, cyber liability, errors and omissions (E&O), employment practices liability insurance (EPLI), equipment breakdown, inland marine and workers’ compensation. Customers can get a quote online, by phone or through a local agent.

Nationwide was first out of the 13 companies ranked in the 2023 J.D. Power U.S. Small Commercial Insurance study. J.D. Power noted that even though business insurance premiums are increasing, insurers that proactively communicate with customers and work with them to find ways to minimize their insurance costs tend to see an increase in customer satisfaction.

Best for commercial auto insurance: Progressive

Progressive claims to be the No. 1 commercial auto insurer in the U.S., insuring more than 1.9 million vehicles. The company offers specialized coverage for business autos, contractors, heavy trucks and trailers.

Besides commercial auto, Progressive offers BOP, cyber insurance, general liability, group health, professional liability and workers’ compensation coverages. Its website offers online quotes and includes articles and other resources to help customers determine their coverage needs. Progressive also sells through a large network of independent insurance agents. Claims can be reported online or by phone.

Progressive has an A+ rating from AM Best but was not included in J.D. Power’s most recent rankings of small business insurers.

Best for coverage options: State Farm

The largest property and casualty insurer in the world, State Farm offers insurance for more than 300 professions. Everyone from accountants to window treatment store owners can get the coverage they need from this financial services giant.

State Farm offers BOP, builder’s risk, commercial auto, commercial umbrella, farm and ranch insurance, inland marine, group life, professional liability, workers’ compensation and other coverages.

State Farm has a B rating from AM Best, and came in second out of 13 insurers in J.D. Power’s 2023 ratings of small business insurance companies. State Farm runs most of its business insurance customer service through its local agents who provide quotes and are the first point of contact when a customer reports a claim.

Methodology

We reviewed several leading providers of small business insurance, evaluating those companies on their coverages offered, independent ratings and rankings and overall ease of use (including a choice of how to get a quote). Our picks are based on each company’s standout features. All websites were accessed April 24-26, 2024.

Note about third-party sources:

• AM Best is a leading global provider of analytics and ratings specializing in the insurance industry. Its ratings indicate a company’s financial strength and ability to pay claims.
• J.D. Power provides insights into consumers’ interactions with brands in various industries, including insurance. Its 2023 small business insurance customer satisfaction rankings were based on a scale of 1,000 possible points.

How much does small business insurance cost?

The cost of small business insurance varies based on the insurer, the business size and industry, number of employees and other factors.

A recent study by Insureon, an online insurance agent, found that its customers pay an average of $684 per year for BOP, $1,764 for commercial auto and $540 for workers’ compensation coverage.

Who is small business insurance for?

Small business insurance can help reduce a company’s financial risk due to theft, property damage caused by fires, storms or other catastrophes and lawsuits. There are numerous ways to define “small business.” The Small Business Administration, for example, offers tables that define small businesses in various industries based on their number of employees or amount of revenue.

What are the different types of small business insurance?

Small business insurers typically offer a range of coverage options. These can be “mixed and matched” to the needs of a specific small business, ensuring the company has exactly the insurance it needs (and isn’t paying for insurance it doesn’t need).

The most common types of small business insurance

General liability (GL)

This coverage comes into play if a business causes harm (injury or property damage) to a customer or the general public.

Property insurance

This applies if any business property is damaged by catastrophes such as fires and storms, or is stolen and not recovered.

Business interruption

This helps reimburse lost income if a business is forced to shut down operations due to a covered incident.

Business owners policy (BOP)

While GL, property and business interruption may be purchased separately, it’s common to buy them packaged in a BOP. As a package deal, a BOP usually costs less than buying separately. Plus, the business owner has only one policy to deal with.

Additional types of small business insurance

A business may need to consider purchasing additional insurance, depending on its needs.

Commercial auto insurance

While similar in many ways to a personal auto policy, commercial auto is tailored to the needs of a business that owns, leases or rents vehicles and has employee drivers.

Commercial umbrella insurance

This is an extra layer of liability coverage that kicks in if a claim exceeds a policy’s standard liability limits.

Cybersecurity insurance

Helps reimburse costs a business may incur following a cyberattack, including recovering and replacing lost/stolen data, customer notification and legal counsel.

Employment practices liability insurance (EPLI)

This coverage applies if current or former employees sue a business for issues such as discrimination, wrongful termination or harassment.

Inland marine insurance

This helps reimburse a business if property shipped overland by truck, train or other transport is damaged or stolen.

Professional liability insurance

Typically for professional services such as accountants, doctors and lawyers, this coverage applies if clients sue for negligence. Some companies refer to this as errors and omissions (E&O) insurance.

Workers’ compensation

This pays for medical expenses, lost wages and rehabilitation expenses if an employee is injured or becomes ill on the job.

How much insurance does a small business need?

No two businesses are exactly alike, and no two businesses’ insurance needs are the same either. The amount of coverage a small business needs varies depending on its size, number of employees, assets, type of business and other factors.

Most small businesses typically need GL, property insurance and business interruption coverage, which they can purchase as a BOP. Some coverages, such as workers’ compensation or commercial auto, may be required by law for certain businesses. Other coverages, such as professional liability, are advised for businesses in industries prone to customer litigation.

How to get small business insurance

As with other types of insurance, small business insurance company websites are often loaded with information and tools to help a business owner decide what coverages they need. Many sites even offer “get a quote” functionality. This can be extremely useful to a business owner wanting to get an idea of how much insurance will cost.

However, we recommend buying insurance through an agent. Insurance agents are licensed professionals who are trained to understand their clients’ financial risks. They can take time to understand a small business’ insurance needs and get them a policy that provides adequate financial protection. Independent insurance agents typically represent multiple companies, so they can shop around to help you find coverage that works for your budget.

The AP Buyline roundup

Many small business insurance companies offer coverage tailored to the needs of small business owners, protecting against fire, theft, lawsuits and other risks. Business owners owe it to themselves to have that protection. An insurance agent can help match a small business to the right coverage.

Frequently asked questions (FAQ)

How do I know if I need small business insurance?

Laws in many states and municipalities require businesses to have coverages such as liability, workers’ compensation and commercial auto. Small business insurance limits a company’s financial risk. An insurance agent can help you determine your coverage needs and make sure you buy the right policy or policies.

What does business insurance exclude?

Virtually every type of insurance policy has exclusions — specific acts or incidents the insurer doesn’t cover. Some typical exclusions include:

• Damage or destruction related to large catastrophes such as watershed flooding and earthquakes. Note that coverage endorsements or separate policies may be available to protect against these risks.
• Damage caused by improper or inadequate maintenance.
• Losses resulting from illegal business activity.
• Intentional damage by the business.

Your insurance policy spells out any exclusions. Be sure you understand what yours does and doesn’t cover and ask your agent for help.

Does a business auto policy cover personal use of a company vehicle?

A business auto policy typically provides coverage for the personal use of a company vehicle, provided that the employee is listed on the policy as a permitted driver. For example, a sales representative can use her company car to pick up her daughter from softball practice or to run errands on the weekends.

Check your business auto policy to understand exactly how your coverage works. Again, your agent can help.

What’s the difference between general liability and professional liability insurance?

General liability insurance provides coverage for any harm your business might cause in the regular course of operations, including injuries to customers or property damage. Meanwhile, professional liability insurance protects certain service providers, such as doctors, attorneys, accountants and others, from legal damages caused by their professional mistakes.