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    Icons representing insurance: Umbrella, broken foot, broken camera, smashed wedding cake. Business insurance.

    What kind of business insurance do I need?

    General Liability | Professional Liability | Business Owners' Policy
    By: Hiscox Blog

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    You’ve made the important decision to buy business insurance – good for you! But how do you know what type of insurance to buy? And how much is it all going to cost? Don’t worry – we have the answers. 

    What kind of insurance do I need?

    There are two basic types of business insurance, general liability (GL) and professional liability (PL). Both kinds cover third-party claims, meaning claims made by another person (not you or an employee). 

    Related: Deep dive into general liability vs. professional liability insurance

    General liability, sometimes called commercial general liability or CGL, covers:

    • Bodily injury, when, for example, someone slips and falls in your store. It can cover medical expenses and lost wages
    • Property damage, such as damage to a seller’s furnishings while a realtor is holding an open house
    • Personal injury, such as libel or slander
    • Advertising injury, when you inadvertently use someone else’s idea in your advertising 
    • Electronic data liability, such as the costs associated with lost or damaged data  

    Professional liability, sometimes called errors and omissions or E&O insurance, covers negligence when providing professional services. This includes:

    • Errors, like when you do something you shouldn’t have done
    • Omissions, when you didn’t do something you should have done 

    Professional liability insurance also protects you against lawsuits for personal injury, like libel or slander. 

    General and professional liability policies cover your costs to defend yourself in a lawsuit, even if you haven’t made a mistake or if the suit is found to be without merit. 

    There’s also a business owners policy, or BOP, which combines general liability with coverage for your business’s property. 

    Who needs which type of insurance?

    If you see clients or vendors face to face, whether it’s in a store, at your office, or at a job site, you need general liability insurance. 

    If you also have business furniture or equipment, like computers or tools, you need a business owners policy. 

    If you provide advice to clients as part of your business, you need professional liability insurance. 

    Many businesses need more than one kind of insurance, like general liability and professional liability or professional liability and a business owners policy. 

    If you have employees, you need workers compensation insurance, which covers you if an employee gets ill or injured at work. 

    You can also get insurance for specific risks, like cyber security insurance. 

    How much does business insurance cost?

    When you buy business insurance, you want a policy that fits your business and protects you against the specific risks you face. So the best way to find out how much it will cost is to get a quote – it’s fast, easy, and you can do it online in about ten minutes. 

    There are several factors that will influence how much your coverage will cost. They include:

    • The type of business you have
    • Where your business is located
    • The size of your business by revenue or number of employees
    • The limit on your policy, which is the maximum amount that will be paid on each claim and in total
    • The deductible, which is the amount you have to pay before insurance covers a claim. 

    To give you some examples, a business consultant in Texas with a $200,000 annual payroll might pay a premium of $27.19 per month for a general liability policy with a $1,000,000 limit per occurrence and no deductible. An IT consultant in California with $150,000 in annual revenue might pay $36.75 per month for a professional liability policy with a $500,000 limit and a $5,000 deductible. Your costs will probably be different. 

    You’ve worked hard to build your business, and you’re smart to want to protect it. Check coverage and get a quote to see which insurance is right for you. 


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