Business insurance (GL, E&O, etc.)

Business insurance protects your company from financial losses due to lawsuits, property damage, theft, employee injuries, and other risks. Most small businesses need multiple types of coverage.

78 steps across 10 sections

1. 1. General Liability Insurance (GL)

  • Bodily injury to third parties (customer slips and falls at your business)
  • Property damage to third parties (your employee damages a client's property)
  • Personal and advertising injury (libel, slander, copyright infringement)
  • Medical payments (minor injuries regardless of fault)
  • Legal defense costs
  • Every business that interacts with customers, clients, or the public
  • Often required by landlords, clients, and contracts
  • The most fundamental business insurance policy
  • Professional mistakes or negligence (need E&O)
  • Employee injuries (need workers' comp)

2. 2. Professional Liability / Errors & Omissions (E&O)

  • Negligence in providing professional services
  • Errors (doing something incorrectly)
  • Omissions (failing to do something you should have)
  • Breach of duty, misrepresentation
  • Legal defense costs even for frivolous claims
  • Consultants, advisors, and service providers
  • Technology companies (software errors, data loss)
  • Accountants, architects, engineers, real estate agents
  • Marketing/advertising agencies
  • Any business that gives professional advice or delivers services

3. 3. Business Owner's Policy (BOP)

  • General liability insurance
  • Commercial property insurance (building, equipment, inventory, furniture)
  • Business interruption insurance (lost income if you cannot operate due to a covered event)
  • Small to mid-sized businesses with physical locations
  • The most common type of coverage for SMBs (per the Insurance Information Institute)
  • Typically 20-30% cheaper than buying GL + property + business interruption separately
  • Not available for all business types (home-based businesses, large companies, high-risk industries may not qualify)
  • Does not include professional liability, workers' comp, commercial auto, or cyber coverage

4. 4. Commercial Property Insurance

  • Business-owned buildings and structures
  • Equipment, furniture, inventory, supplies
  • Damage from fire, storms, theft, vandalism
  • May include outdoor signage, fencing, landscaping
  • Any business with physical assets (equipment, inventory, office furnishings)
  • Required by landlords and mortgage lenders
  • Often included in a BOP

5. 5. Cyber Liability Insurance

  • Data breach response costs (notification, credit monitoring, forensic investigation)
  • Ransomware payments and system restoration
  • Business interruption from cyber events
  • Regulatory fines and penalties
  • Third-party lawsuits from data breaches
  • Social engineering/phishing attacks
  • Any business that stores customer data (names, emails, payment info, health records)
  • E-commerce businesses
  • Technology companies
  • Healthcare and financial services (regulatory requirements)

6. 6. Key Person Insurance

  • Life insurance or disability insurance on a critical individual (founder, top salesperson, lead developer)
  • Pays the business (not the individual's family) if the key person dies or becomes disabled
  • Provides funds to recruit a replacement, cover lost revenue, pay debts, or wind down operations
  • Small businesses dependent on one or a few individuals
  • Businesses with outstanding loans (lenders may require it)
  • Partnership and LLC buyout funding

7. 7. Directors & Officers (D&O) Insurance

  • Lawsuits against company directors and officers for decisions made in their official capacity
  • Allegations of mismanagement, breach of fiduciary duty, regulatory violations
  • Legal defense costs, settlements, and judgments
  • Covers personal assets of directors/officers
  • Corporations with a board of directors
  • Companies seeking investment (VCs and investors often require D&O)
  • Nonprofits (protects board members)
  • Any business where management decisions could trigger lawsuits

8. 8. Commercial Auto Insurance

  • Vehicles owned or leased by the business
  • Liability for accidents involving business vehicles
  • Physical damage to business vehicles
  • Hired and non-owned auto (employees using personal cars for business)
  • Any business that owns vehicles
  • Businesses where employees drive for work purposes
  • Delivery, transportation, and service businesses

9. 9. Employment Practices Liability Insurance (EPLI)

  • Claims from employees alleging wrongful termination, discrimination, harassment, retaliation
  • Wage and hour disputes
  • Failure to promote, breach of employment contract
  • Any business with employees (risk increases with more employees)
  • Particularly important in states with strong employee protection laws

10. Coverage Priority Order

  • Workers' compensation — legally required in most states if you have employees
  • General liability — foundational protection; often contractually required
  • Professional liability / E&O — if you provide services or advice
  • Property insurance / BOP — if you have physical assets or a location
  • Cyber insurance — if you handle any customer data
  • Commercial auto — if business vehicles are used
  • Umbrella/excess — extra liability coverage beyond standard limits

Sources

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