If you’re a small business owner scratching your head over policies, premiums, and coverage limits, you’re in the right place. This guide explains the main types of small business insurance coverage available, how they differ, and the easiest way to compare small business insurance costs online so you can get back to doing what you love.
Why Are There So Many Types of Business Insurance?
Every business faces completely unique risks. A freelance accountant working from a home office deals with very different threats than a plumber visiting multiple jobsites each day. As a result of this, there are a variety of policies tailored to specific situations.
Most coverage options fall into three main categories:
Liability insurance
Liability coverage steps in when things go wrong with clients, customers, or third parties. General liability insurance covers third-party bodily injury and property damage. So if a customer trips in your retail shop, or you accidentally break a window at a client’s house, general liability helps handle those costs.
Professional liability insurance (also called errors and omissions) covers claims that your work caused financial harm to a client. This might include a missed deadline or negligent professional advice.
Workers’ compensation
If you have employees, most states require you to carry workers’ compensation. It typically covers medical expenses and lost wages if an employee gets hurt or becomes ill as a result of their job. This helps protect your staff while shielding your business from costly injury claims.
Business personal property insurance
This typically covers the physical assets your business relies on, such as your inventory, tools, and workspace. If a fire or a burst pipe damages your equipment, business personal property insurance can help you replace those items.
Business owner’s policy (BOP) insurance
BOP is a bundled insurance package combining general liability, commercial property, and business interruption insurance. It’s designed for small businesses to cover risks such as property damage, third-party bodily injury, and lost income due to closures. It often costs less than purchasing policies separately.
Common Small Business Insurance Comparisons
Figuring out which policies go together can feel confusing. Let’s look at a few common comparisons to clear things up.
General liability vs. professional liability
General liability handles physical risks, for such someone getting hurt on your property. Professional liability most commonly handles financial risks, like a client suing you as a result of your consulting advice causing them a monetary loss. Many small business owners carry both to ensure comprehensive protection. Learn more about the differences between GL and PL.
General liability vs. business owner’s policy
A business owner’s policy (BOP) bundles general liability, commercial property, and business interruption insurance together into one package. A BOP is highly cost-effective if you have a physical location or valuable inventory to protect. If you work entirely online and don’t own significant physical business assets, a stand-alone general liability policy might be enough. Learn more about the differences between BOP and GL.
Business owner’s policy vs. business personal property vs. inland marine
There are a number of small business property insurance policies available to protect your property, tools, and equipment. Here’s a quick overview of their key coverage distinctions:
- Business Owner’s Policy (BOP) is a bundle for general risks.
- Business Personal Property (BPP) covers items and equipment at a fixed location.
- Contractor’s Small Tools and Equipment (a.k.a. Inland Marine Insurance) protects tools and gear while they are in transit or at a jobsite.
Learn more about the differences among BOP, GL, and Inland Marine.
Workers’ compensation vs. employers liability
Workers’ compensation helps pay the injured employee for their medical bills and lost wages. Employers liability protects your business if that same employee decides to sue you over their workplace injury. You’ll typically find employers liability coverage included right inside a standard workers’ compensation policy in most states (excluding monopolistic states like Ohio and Washington).
Do You Need More Than One Policy?
Most small businesses may need at least two types of coverage, and many may require three or more. The correct combination depends entirely on your industry, location, and team size.
For example, a home renovation contractor likely needs general liability, commercial auto, and tools and equipment coverage. Meanwhile, a retail shop owner with two employees might consider a BOP, product liability, and workers’ compensation.
How Much Does Small Business Insurance Cost?
Small business insurance costs vary based on your specific operations and the coverage limits you select. To give you a helpful baseline, here are the average monthly costs1 for the most common policies, based on Simply Business customer data from late 2025:
- General liability insurance: $45 per month
- Professional liability insurance: $37 per month
- Business Owner’s Policy: $52 per month
- Workers’ compensation insurance: $122 per month
1Data from Simply Business customers who purchased at least one or a combination of general liability, BOP, workers’ compensation, and professional liability policies from July 1, 2025 to December 31, 2025.
Comparing quotes online from multiple top-rated insurers is the most accurate way to see your real options side by side.
How to Compare Small Business Insurance Costs Online
We know you need simple and effective solutions, so we take the guesswork out of the entire process, allowing you to find affordable protection in just a few minutes.
Here is how the process works:
- Answer some simple questions about your daily operations, your location, and your employee count.
- Get matched immediately with customized quotes from leading insurers.
- Compare your choices side by side to find a plan that fits your budget.
- Purchase online and receive your certificate of insurance right away with most policies.
Frequently Asked Questions
What is the most important type of insurance for a small business?
General liability is the most common starting point. It covers frequent risks such as bodily injuries and property damage, and many clients will require you to hold this coverage before signing a contract.
Is It cheaper to bundle policies?
Bundling can be a great way to save money. Grouping general liability and commercial property into a single business owner’s policy is nearly always more affordable than purchasing the two coverages separately.
Do I need coverage even if I work from home?
Usually, yes. Your standard homeowner’s or renter’s insurance typically will not cover business-related claims. If you store business inventory in your garage or occasionally meet with clients in your home, you should consider business insurance to stay protected.
Find the Right Coverage for Your Business
Securing the right protection doesn’t have to be an overwhelming chore. Once you understand the basics of what each policy covers, finding affordable tailored coverage becomes incredibly simple.
Let Simply Business help you protect your hard work so you can stay focused on growth and success. Head over to Simply Business today to compare quotes from top-rated insurers and find the perfect fit for your small business.