Insurance can feel like an endless list of policies with confusing names. If you're a small business owner trying to figure out where to start, these five are the ones most businesses should have in place before considering anything more specialized.
1. General Liability Insurance
This is the foundation most other coverage builds on. It protects against third-party claims of bodily injury, property damage, and advertising injury caused by your business. Many landlords and client contracts require proof of general liability before you can even sign an agreement, which makes it the natural starting point for almost any business.
2. Commercial Property Insurance
If your business owns or leases physical space, holds inventory, or relies on equipment, commercial property insurance protects those assets against fire, theft, vandalism, and certain weather events. It's often bundled with general liability into a Business Owner's Policy (BOP), which can be more cost-effective than buying each separately.
3. Workers' Compensation Insurance
Required in nearly every state once you have employees, workers' compensation covers medical costs and lost wages for employees injured on the job — and protects you from the direct financial exposure of an uninsured workplace injury claim.
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The core coverage most small businesses should have in place before anything else.
Compare Providers4. Professional Liability Insurance
If your business provides advice, a service, or deliverables where a mistake could cost a client money, professional liability (errors and omissions) insurance covers claims that your work caused a client financial harm — even without any physical injury or property damage involved.
5. Cyber Liability Insurance
Any business that stores customer data, accepts card payments, or depends on digital systems is a potential target for a data breach or ransomware attack. Cyber liability insurance covers breach response costs, business interruption, and liability claims tied to compromised data — protection that's increasingly relevant even for very small businesses.
Where to Start If You Can Only Afford One or Two
If budget is tight, general liability is the most broadly useful starting point for most businesses, followed by workers' compensation as soon as you have employees, since that one usually isn't optional. From there, prioritize whichever of the remaining three maps most directly to your specific risk: a service business leans toward professional liability, a retail or office-based business leans toward commercial property, and a business that's heavily online or handles a lot of customer data leans toward cyber.
Revisit Your Coverage as You Grow
The right mix of these five policies for a two-person startup is rarely the right mix once you've hired a team, opened a second location, or started handling more customer data. Treat this list as a starting point to revisit annually, not a one-time checklist — most businesses' risk profile changes faster than their insurance does unless someone deliberately reviews it.
Comparing all five types doesn't have to mean five separate conversations. Use our provider comparison tool to see how coverage options line up, or request a free quote and we'll match you with an agent who can help prioritize based on your specific business.