What insurance does a small business actually need?
Published May 21, 2026
There is no single "business insurance" policy. Most small companies assemble a few coverages based on their risks and obligations.
Start with general liability, which clients and landlords often require. If you own or lease space, equipment, or inventory, add commercial property — or bundle both in a BOP.
Once you hire employees, workers' compensation is usually legally required. Service firms that give advice should add professional liability. Any business that stores customer data should consider cyber liability. If you drive for work, you likely need commercial auto.
Review coverage as you grow; revenue, headcount, and new contracts all change what you need.
Frequently asked questions
＋ Is business insurance legally required?
Workers' comp is required in most states once you have employees, and commercial auto is required for business vehicles. Other coverages are often required by clients, lenders, or landlords rather than by law.
＋ What is a BOP?
A Business Owner's Policy bundles general liability and commercial property at a lower cost than buying them separately — a common starting point for small businesses.
Find a commercial insurance agency
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Educational content only — not legal, financial, or insurance advice. Requirements and pricing vary by state.