Question 1

What insurance does every small business need first?

Accepted Answer

General liability is the single most important policy for nearly every small business. It is required by most commercial leases and client contracts, and it protects you from third-party injury and property damage claims — the most common lawsuits businesses face. If you have a physical location, immediately upgrade to a BOP (which includes GL). After GL, the next priority is workers comp if you have employees (legally required in most states).

Question 2

How much does a full business insurance package cost?

Accepted Answer

It depends on your business type and size, but here are real benchmarks: Solo freelancer or consultant: $30–$100/month (GL only or GL + E&O). Home service business with 2-3 employees: $150–$400/month (GL + WC). Office or retail location with 5 employees: $300–$700/month (BOP + WC). Restaurant with 10 employees: $500–$1,200/month (BOP + WC + liquor liability). These figures increase with higher revenue, more employees, and additional coverage types.

Question 3

Is general liability enough for a small business?

Accepted Answer

General liability is the minimum foundation, but rarely sufficient on its own for businesses with employees, physical locations, or professional service offerings. You need workers comp if you have employees, commercial property coverage if you own equipment or inventory, and professional liability (E&O) if you provide advice or professional services. Think of GL as the required foundation you build on, not the full structure.

Question 4

Do I need workers comp for 1099 contractors I hire?

Accepted Answer

It depends on your state and the nature of the work. In many states, if a 1099 contractor you hire does not carry their own workers comp, you may be held responsible for their injuries. This is particularly common in construction. The safest approach: require all 1099 subcontractors to carry their own GL and WC, and get a certificate of insurance from each one before work begins. Your insurance agent can advise on your state's specific rules.

Question 5

When should I add professional liability insurance?

Accepted Answer

Add professional liability (E&O) as soon as you give advice, make recommendations, or provide professional services where a client could claim your work caused them financial harm. This includes: consultants, accountants, IT professionals, designers, marketers, real estate agents, therapists, and any licensed professional. Even if you do excellent work, a client can sue over a perceived mistake — E&O covers your legal defense and any settlement.

Question 6

What is a BOP and does my small business need one?

Accepted Answer

A BOP (Business Owners Policy) bundles general liability and commercial property insurance into one discounted policy. It also typically includes business interruption coverage (which pays ongoing expenses if a covered loss forces you to close temporarily). If you operate from a physical location — office, studio, store, restaurant — a BOP is almost always a better deal than buying GL and property separately. The bundled price is typically 15-30% lower than buying each policy individually.

Business Size	Typical Coverage Needed	Est. Monthly Total
Solo freelancer / consultant	GL + E&O	$70–$200/mo
Home service (1 employee)	GL + WC	$150–$350/mo
Small office (3–5 employees)	BOP + WC	$300–$600/mo
Retail or restaurant (5–10)	BOP + WC + (liquor)	$400–$900/mo
Contractor / trades (5–10)	GL + WC + commercial auto	$500–$1,200/mo

The Complete Small Business Insurance Package

Start Here: The Foundation

General Liability (Required First)

BOP (Upgrade if You Have a Physical Location)

Workers' Compensation (Required if You Have Employees)

Professional Liability / E&O (Add if You Give Advice)

Cyber Liability (Add if You Handle Customer Data)

Total Package Cost by Business Size

Get Your Custom Insurance Package Quote

Small Business Insurance Package FAQs

Related Resources