Business insurance transfers specific financial risks from the business to an insurer in exchange for premium payments. The core types for a small business include general liability (covers injury or damage claims from third parties), property insurance (covers damage to the business’s physical assets), workers’ compensation (covers employee injuries — required by law in most states), and business interruption insurance (covers lost revenue during forced closure).
Additional coverage depends on the business type: food businesses may need product liability or spoilage coverage; businesses with vehicles need commercial auto; professionals may need errors and omissions (E&O) coverage. A Business Owner’s Policy (BOP) bundles general liability and property insurance at a lower cost than separate policies.