Small business owners are responsible for managing and growing their businesses and protecting their company’s assets and employees. It’s no surprise, then, why business insurance is so important and mandatory in some cases.
To be fair, most business insurance companies offer similar coverages and are on par in quality. However, there are a few that stand out. Here are some of the best small business insurance companies out there.
1. The Hartford – Best for a Business Owners Policy
The Hartford has been offering coverage to companies for 200 years. It’s one of the best business insurance companies on the market for a business owners policy (BOP). So much so that it’s been recognized with an A+ status by independent insurance rating agency AM Best.
In addition, you can add other individual and custom coverages as needed based on the specific requirements of an industry, such as the restaurant industry.
The Hartford’s BOP also includes business interruption insurance. This type of insurance will replace lost revenue due to a covered loss as defined by the specific policy, such as a fire.
2. Philadelphia Insurance Companies – Best for Professional Liability
Philadelphia Insurance Companies is one of the top-rated business insurance companies. It’s earned an A++ rating from AM Best and an A+ Standard and Poor’s rating.
Policies are available for a variety of professionals:
- Accountants
- Chiropractors
- Integrated technology
- Life coaches
- Mental health counselors
- Media liability
- Temporary staffing agencies
- Allied health professionals
In addition, this company offers professional liability insurance for 70 other professions and industries. Examples include HR consultant, notary, property manager, document analyst, project manager and designer. They also cover various consultant positions in such industries as marketing, business, energy and fundraising.
3. Chubb – Best for Employment Practices Liability
J.D. Power has ranked Chubb No. 1 in its 2020 customer satisfaction survey. While the insurance provider offers various coverages, including general liability and niche solutions, including environmental, cyber and marine insurance, it’s a top pick for employment practices liability. Get coverage for wrongful firings, sexual harassment, discrimination and related claims.
4. Liberty Mutual – Best for Commercial Property
Though Liberty Mutual offers various coverages, including general liability, workers’ compensation, BOPs, third-party administration and excess liability, it makes our list for best commercial property insurer. Not surprisingly, it tied with Erie Insurance for third place on J.D. Power’s 2020 customer satisfaction survey.
Protect your company from property damage, whether an office space or inventory. Commercial property coverage is what you need to insure your building and its contents.
Additionally, Liberty Mutual offers excess coverage for the following:
- Hotels
- Food processing
- Premier properties
- Equipment breakdown
- Commercial real estate
- Inland marine (coverage for materials that move locations)
- Ocean marine (coverage for cargo, hull and marine general liability)
5. AmTrust Financial – Best for Workers’ Compensation
If you’re in business, workers’ compensation is a given. Our vote for one of the best small business insurance companies for workers’ comp is AmTrust Financial.
It’s been in operation since 1998 and is one of the largest providers of workers’ compensation policies in the U.S., specializing in coverage for small businesses. Additionally, it’s earned an A- rating from AM Best.
Coverage is available for more than 350 class codes, though the company typically avoids serving small businesses in industries with high injury risk, such as heavy construction and farming.
Examples of business classes the company favors include the following:
- Artisan contractors
- Beauty shops
- Building operations
- Doctors
- Dentists
- Hotels
- Machine shops
- Light metalworking
- Private schools
- Professional offices
- Restaurants
- Retail stores
- Wholesale stores
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Workers’ Compensation Insurance Alternatives
These days, in addition to insurance carriers, you can look to payroll companies for workers’ compensation insurance (e.g., Paychex). This is a popular choice for many businesses because these companies can detect fluctuations in payroll quickly and adjust their premiums as needed, which reduces the likelihood of surprise year-end audits.
Additionally, many states have funds specifically for workers’ compensation insurance. In many cases, pricing is as competitive as you’d find with a conventional carrier.
Whichever route you choose, ask your carrier if they offer dividend plans. While these vary depending on your state and insurance carrier, your company could earn a portion of your premium back if you have low or no workers’ compensation claims.
6. Progressive Commercial – Best for Commercial Vehicles
Progressive Commercial offers more than 30 types of business vehicle insurance and liability coverages nationwide. If your company relies on delivery or transportation or has a fleet of cars or trucks, this carrier is a good choice for your business insurance needs.
It’s the leading commercial vehicle insurer in the country, covering business trucks, SUVs, cars, buses, RVs and limousines. It also offers commercial insurance for the following tractor-trailers:
- Utility trailer
- Flatbed trailer
- Auto hauler trailer
- Dry freight trailer
- Tank trailer
- Refrigerated dry freight trailer
- Bulk commodity trailer
- Concession trailer
- Transfer box
- Pole trailer
However, emergency vehicles, exhibition vehicles, wheelchair buses, golf carts and double-decker buses are ineligible for coverage.
7. Hiscox – Best for Independent Contractors
If you’re self-employed, Hiscox is one of the top business insurance companies in the country. Head to the carrier’s website, where you can get a quick quote online, and you’ll be greeted with the statement “big coverage for small business.”
Coverage is available for more than 180 professions, and the company currently insures more than 400,000 small businesses.
Protect yourself from business lawsuits with the right coverage. Business insurance policies available include general liability, errors and omissions, business owners policy, cybersecurity, short-term liability, umbrella policies and more.
Hiscox has earned an A+ rating with the Better Business Bureau as well as an A rating with AM Best.
8. CNA – Best for Tech Companies
While CNA is one of the best business insurance companies for professional liability, it’s also a choice for tech companies, offering cyber liability, customized technology errors and omissions and commercial general liability. Not to mention, it’s earned an A+ rating from Standard & Poor’s.
CNA specializes in insuring businesses in the following sectors, whether established or startup companies:
- Software
- Digital media
- Communications
- Information technology
- Electronics manufacturing
9. MedPro Group – Best for Healthcare Industry Professional Liability
If you’re in the market for medical malpractice insurance, MedPro Group is a top pick. This Berkshire Hathaway company has been in operation for more than a century and has an A++ rating from AM Best. It offers coverage to more than 240,000 healthcare providers nationwide, including physicians, dentists, surgeons, senior care providers, hospitals and medical centers.
How to Wade Through Commercial Insurance Companies
Follow these tips to determine what kind of insurance you need and which carrier will be best for you.
Identify Your Risks
While workers’ compensation is mandatory throughout the country, there are other insurance coverages to keep in mind depending on your industry. Consider what kind of natural disasters, accidents or lawsuits could happen that could put you out of business.
A fishing and boating excursion company, for instance, wouldn’t have the same risk as a bookstore. Along the same lines, you could need higher malpractice coverage or more coverage for your building and contents.
Each business is different, so it’s important to look at your company and identify what kind of specialized coverage you might need.
Find an Insurance Agent
When you’re looking for business insurance, you have two options. You can go through a licensed agent who works for a single carrier, referred to as a captive carrier (e.g., State Farm, Nationwide, Allstate). Or you can go to a local, independent agent or broker who may represent several insurance companies.
Independent agents can also offer more accurate, personalized underwriting of your business and work on your behalf to negotiate premiums. Additionally, they can go to bat for you with the carrier if you ever have an insurance claim, as well as assist with workers’ compensation audits.
You can search online reviews and Better Business Bureau ratings to compare local insurance agents. You can also search for carrier ratings and long-term outlook on AM Best (e.g., A+ rating, “stable” outlook).
Compare Prices
Premiums and benefits can vary widely between insurance companies and can be affected by your profession, accident history and length of time in business. Get quotes from several agents and compare the rates, terms and benefits.
Additionally, be sure that you ask your agent if the policy is an occurrence policy or a claims-made policy when you’re given a quote. The latter is less costly upfront. However, you’ll need to buy an extension policy at the end of the period if you want coverage on claims for accidents that took place during the covered period but which are claimed after your policy period has ended.
In contrast, occurrence policies have an initially higher out-of-pocket expense. That said, once the policy period ends, you remain covered in perpetuity for incidents that occurred during the covered period.
Evaluate Your Insurance Needs Each Year
As your business grows and you add employees, your insurance needs will likely change. You may have more property that needs coverage, and your liabilities could increase. Discuss these changes with your insurance agent and learn how they will affect your coverage.
