Small Business Insurance for LLC

Registering your business as a limited liability company (LLC) separates your business assets from your personal assets. That separation helps to protect your personal assets if your business is ever sued, but an LLC doesn’t protect your business assets. To do that, you’ll need to purchase Limited Liability Company insurance.

What Is Business Insurance for an LLC?

Insurance for an LLC helps protect your business from potential liability claims. If a customer or competitor ever sues for damage caused by your business, employees, or products, your LLC insurance covers related costs, like legal fees and judgment payouts.

What Does Insurance for an LLC Business Cover?

LLC company insurance can vary slightly depending on the insurance provider, so it’s important to thoroughly read your policy. Generally, LLC liability insurance includes:

Professional liability insurance, also called errors and omissions coverage, helps to protect your business if you’re sued for a mistake in the services that you provide. For example, if your business misses a deadline that financially damages a customer’s business, your liability insurance would help to pay for legal costs, judgments, and settlements.
General liability insurance, also called business liability insurance, helps protect your business if you damage someone’s property or cause physical harm to a customer. For example, if a customer slips on a wet floor in your store and breaks their arm, this coverage would pay for any related legal costs as well as the customer’s medical bills.

You can also add on several optional coverages to customize your LLC insurance to your needs:

Workers’ compensation insurance is required by most states and ensures your employees will receive financial support while recovering from an injury that occurred on the job.
Commercial property insurance protects your business’ physical location, as well as tools and inventory, if the location is damaged during an event like a fire.
Commercial auto insurance covers expenses that result if you or an employee are in an accident while driving a vehicle for the business. This policy can cover costs like medical bills and repair expenses.
Business income insurance reimburses you the cost of income you lost if you can’t operate your business because of property damage.

Do I Need LLC Business Insurance?

Even when you’re careful, there are still risks to running a business, and the cost of a single lawsuit can be enough to leave your business bankrupt. If you don’t have LLC insurance, you would have to pay for expenses, including legal fees, out of pocket. Buying small business LLC insurance can give you peace of mind and help protect the business that you’ve worked so hard to build.

How Much Does Small Business LLC Insurance Cost?

The cost of small business LLC insurance depends on many factors, like your business size, number of employees, revenue, location, claims history, and industry.

Paige Cerulli Paige Cerulli is a freelance content writer and journalist who specializes in personal finance topics. She graduated from Westfield State University and brings more than a decade of professional writing experience to the ConsumerCoverage team. Paige’s work has appeared in outlets including USA Today, Business Insider, and more.