What Insurance Do You Need to Start a Business in The United States?

What insurance do you need to start a business in the United States and start immediately? The economy of the country is growing and the projections for the future are impressive.

As an entrepreneur, tapping into such opportunities is on your to-do list. But you need to know the type of insurance policy to buy for protecting your business. You will find out about that in this article.

Do You Need Insurance to Start a Business?

Business insurance is needed if you intend on building a sustainable brand. The policy also covers your business property and its content in the event of accidents.

According to the U.S. Chamber of Commerce, “getting insurance to cover your small business is an important part of starting a business.”

Therefore, you need to get business insurance to kick off fully in the United States.

What Insurance Do You Need for a Business?

Let us now discuss some of the common insurance types for your small business. The following are some of the popular business insurance policies:

1.    Commercial Property Insurance

This type of insurance policy is relevant for businesses with physical structures. Apply for this if your small business has an office or offline outlet.

Note that commercial property insurance is ideal for businesses with lots of physical assets.

The coverage offered in the policy protects your business properties and office furniture. Attention is particularly paid to insurance of properties damaged as a result of vandalism, hail storms, and fire outbreak.

2.    General Liability Insurance

This type of business insurance policy protects your business against lawsuits and slander. This comes in handy when someone is injured on your business premises.

General liability insurance also protects your small business from:

  • Settlement bonds
  • Medical expenses for injured persons on your property.
  • Libel
  • Out-of-court settlements

3.    Home-Based Business Insurance

This type of business insurance policy is not as popular as the others, but it is relevant. Home-based business insurance is ideal if you are running a remote business. If your business is run from your home or remote location, this is the policy you need.

The reason why it is not so popular is that it is added as a rider. A rider means that the coverage is an add-on. It is added to an existing home insurance policy. That way, the insurance company covers both your home-based business and your home.

Because of the limited operational space, the coverage is smaller. The home-based business insurance only covers the following:

  • Bodily injuries are caused to customers who visit your home for transactions.
  • A few business properties, including equipment and mini-office furniture.

4.    Product Liability Insurance

Your business needs to apply for product liability insurance if it manufactures something. The policy also covers businesses that retail/sell or distribute products in the United States.

The insurance typically protects your business from financial loss emanating from a defective product. In this instance, a customer may sue your business in court. The insurance company saves the day by covering the costs of settling the case out of the court. In some cases, the insurer settles the medical bills to treat the injured customers.

5.    Vehicle Insurance

Vehicle insurance is also called automobile insurance. It is a type of business insurance policy that protects company-owned vehicles.

There are some things to know about how automobile insurance works. First, the policy protects your business against accident-related liability.

This includes when an employee drives into someone while conveying the company’s products to customers.

The policy also covers the cost of repairing or replacing damages caused to other people’s properties and vehicles with your company vehicle.

However, automobile insurance may not be covered if it causes liability outside of work. For example, if the driver is going for a ride with the company vehicle, the policy cannot be activated. In such an instance, the personal liability of the driver covers the costs of repairing the damaged properties. The driver will also be responsible for fixing the company vehicle and settling the medical bills of the accident persons.

6.    Liquor Liability Insurance

This type of business insurance is required for liquor-selling businesses. Maybe, you run a pub or bar. This policy protects your business if someone gets injured during work hours.

Third-party bodily injuries are deemed insured for customers and property owners. The insurance policy covers the cost of hiring a lawyer and seeing through the court proceedings.

7.    Cyber Liability Insurance

What does insurance do for a business offering cyber-based services? The name of the insurance is Cyber Liability Insurance. It protects your business when there is a data breach that led to the loss ofcustomer data.

By default, Cyber Liability Insurance protects a cyber-offering business from blame from customers. They are not only blaming your business for being insecure with their data. They are also likely to sue your business because they wouldn’t want such an incident to be repeated.

Cyber Liability Insurance covers the cost of sending instant notifications to customers about their data. It also covers the cost of monitoring the customer’s credit.

8.    Business Interruption Insurance

This insurance policy protects your business if its operations are interrupted. The interruption ranges from repairs to the facility and damages caused by fire outbreaks or massive property damage.

Your business, being a physical outlet, may be unable to generate profits or revenues. By insuring it with the Business Interruption Insurance policy, finances can be controlled.

This type of business insurance policy compensates your business to pay staff salary and make certain expenses.

9.    Business Owner’s Insurance Policy

The Business Owner’s Policy or BOP is an encompassing insurance policy. It is recommended by the top insurers because of the extensive coverage.

The policy covers rolls multiple insurance policies into one. You can get property insurance and general property liability insurance in this bundle.

10.  Workers’ Compensation Insurance

We saved the best for the last. The Workers’ Compensation Insurance protects your workers or employees from bodily injury and disability sustained while working for you.


We are sure you now have answers to the question, “what insurance do I need for a business in the United States.” Contact a reliable insurance agent to help you go through the options to pick the best policy for your business.


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