What does business insurance cover?

Business insurance is a set of policies that pay for the losses a small company can't absorb on its own: a lawsuit, a fire in the shop, a worker hurt on a ladder. Most businesses start with a few core coverages and add as they grow.

General liability

Typically helps pay if your business is blamed for injuring someone or damaging their property, like a customer who slips on the wet floor by your front door in January. It often includes the cost of your legal defense.

Commercial property

Typically covers your building if you own it, plus equipment, inventory, and furniture, against covered causes like fire or theft.

Business owner's policy

A business owner's policy, or BOP, often bundles general liability and commercial property into one policy for smaller businesses. Many also include business income coverage, which can help replace lost income if a covered loss forces you to close for a while.

Commercial auto

Typically covers vehicles your business owns or uses for work. Here's the gap we see most often: a contractor's van, full of tools, sitting on a personal auto policy because that was easier at the time. A personal auto policy may not cover a vehicle used mainly for business. For personal vehicles, see auto insurance.

Workers' compensation

Typically pays medical bills and part of lost wages for employees who are hurt on the job.

Professional liability

Also called errors and omissions, it often covers claims that your advice or professional work caused a client to lose money.

What does business insurance usually not cover?

Each policy has limits and exclusions. Common gaps include:

  • Flood and earthquake damage, which commercial property policies typically exclude unless you add coverage
  • Employee injuries under general liability, which typically fall under workers' compensation instead
  • Mistakes in your professional work, which usually need professional liability coverage
  • Data breaches and cyberattacks, which often need a separate cyber policy
  • Wear and tear, and damage that happens slowly over time

Exclusions vary by policy. If you're about to take on a new kind of work, call before the first job, not after.

Is workers' compensation required in Illinois?

Yes, in most cases. The Illinois Workers' Compensation Commission says that if you have one employee, even a part-time employee, you must obtain workers' compensation insurance.

Sole proprietors, business partners, corporate officers, and LLC members may exempt themselves, the Commission notes. An employer that knowingly and willfully goes without coverage may be fined up to $500 a day, with a $10,000 minimum.

Is workers' compensation required in Arizona?

Generally, yes, if you have employees. Arizona's law covers employers with workers regularly employed in their business, even for only part of the year, with exceptions such as domestic servants (A.R.S. 23-902).

Covered employers must secure coverage through an authorized insurance company or an approved self-insurance or pool arrangement (A.R.S. 23-961). Rules for owners and independent contractors can be detailed, so we'll walk through your situation. For Arizona insurance questions, contact the Arizona Department of Insurance and Financial Institutions.

How we work on business insurance

We ask what you do on a job, in detail. Not "construction," but whether you go up on roofs, whether you sub out the electrical, whether you're ever inside a customer's home. The class code an insurance company assigns to your work drives the price and the coverage. A wrong one causes trouble both ways. You can pay for exposure you don't have, or find out at claim time that the work you do wasn't the work on the policy.

We also read the contracts. If a general contractor or a landlord hands you an insurance requirement, send it over before you sign and we'll tell you whether your policy meets it. If something goes wrong on a job, call us as well as the claims line, and see our claims page for the steps.

What to have ready when you call

When you're ready, call us for a quote.

  • Your business name, address, and type of entity, such as LLC or sole proprietor
  • What your business does, in your own words, and how long you've been open. "We paint interiors, nothing above one story" is more useful than "painting."
  • Number of employees, full and part time, plus estimated yearly payroll and revenue
  • Building details if you own or lease space, such as square footage and year built
  • The value of your equipment, inventory, and furniture, including the tools in the truck
  • Year, make, model, and VIN of any vehicles used for work, and who drives them
  • Any lease or contract that lists insurance requirements
  • Your current policies and any claims from the past few years

Common questions

What is a certificate of insurance?

It's a short document that shows a customer, landlord, or general contractor what coverage your business carries. When someone asks you for one, call us and we'll help you request it.

Do I need business insurance if I work from home?

Often, yes. A home or renters policy typically offers little or no coverage for business equipment and business liability. Tell us about the home business, even a small one, so we can review what's covered.

Does my personal auto policy cover my work truck?

It may not. A personal auto policy may not cover a vehicle used mainly for business, like making deliveries or hauling tools to job sites. Tell us how you use each vehicle.

Does a business owner's policy include workers' compensation?

Typically not. A BOP usually bundles general liability and commercial property, and workers' compensation is generally written as a separate policy. If you have employees, ask us about both.