The 10 best insurance companies for small businesses
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Running your own business can be satisfying with the perks of being your own boss, higher potential of success, and independence. But it also has its own challenges and stresses. One of the most significant challenges is protecting your business from liabilities or losses, which is why small business insurance is so important. Whether you’re the victim of a data breach or a customer is injured on your premises, the right insurance policy provides peace of mind and keeps your business operational.
To help you find the best insurance for your company, we evaluated 22 insurance companies based on their available coverages, customer service and financial stability (view our full methodology) and identified the top 10 small business insurers.
The 10 best small business insurers of February2024
- Best overall: State Farm
- Best for customer service: Nationwide
- Best for financial stability: Chubb
- Best for commercial auto coverage: Allstate
- Best for coverage add-ons: The Hartford
- Best for landlord coverage: American Family
- Best for data breach or cyber insurance: Travelers
- Best for policy discounts: Farmers
- Best for home-based businesses: The Hanover
- Best insurance marketplace: CoverHound
Whether you’re a solopreneur or you manage a growing team, running your own small businesses is a booming trend. The Economic Innovation Group reported that Americans submitted 5.5 million new business applications in 2023, an increase of 8% from the prior year.
For new business owners and those who have been managing a company for years, it’s a good idea to shop around periodically and review your business insurance needs to ensure you have adequate coverage. To help you get started, here are our picks for the best small business insurers of 2024.
1. Best overall: State Farm
About: Founded in 1922, State Farm has been providing insurance coverage for over 100 years, and it has an outstanding reputation in the insurance industry. It has the highest-possible AM Best Financial Strength Rating of A++, signaling its financial stability and reliability, but it also stands out due to its innovative products, award-winning mobile app, online platform, and other tools. And it also has high scores for customer support.
- Am Best Rating: A++ (Superior)
- J.D. Power Customer Satisfaction Index Ranking: 2nd out of 13 issuers
- Number of Small Business Products: 14 small business insurance products and add-ons
- Customer support: State Farm’s customer support is available via chat or phone, or you can contact a local agent; State Farm has over 19,000 agents in the U.S.
Our verdict
State Farm is best for companies in a broad range of industries, from bakeries to plumbing. It is particularly useful for newer companies or business owners who are unsure of what kind of coverage they need; State Farm has several tools— including a simple online quiz— that can help you identify what insurance products and add-ons are right for your business. State Farm has comprehensive solutions, including coverage for liabilities, property, employees and even life insurance for the business owner.
2. Best for Customer Service: Nationwide
About: Nationwide has been in operation since 1925, and it provides customers with a variety of insurance products, including both personal and business coverage options. For small business owners, Nationwide offers a broader-than-usual range of insurance solutions, including business liability coverage, workers’ compensation insurance and commercial umbrella policies.
- Am Best Rating: A (Excellent)
- J.D. Power Customer Satisfaction Index Ranking: 1st out of 13 issuers
- Number of Small Business Insurance Products: 14
- Customer support: Nationwide allows business owners to get quotes online, or you can connect with an agent over the phone or in person.
Our verdict
Nationwide is best for small business owners with fewer than 100 employees and under $5 million in revenue because that’s the company’s requirements for its business owners policies (BOPs). BOPs are packages of coverage that combine business liability, commercial property, business income and equipment breakdown insurance into one policy.
Nationwide has an outstanding reputation for customer service, and you can reach customer support in several different ways. Additionally, the company has many optional add-ons you can use to customize your policy for added protection.
3. Best for Financial Stability: Chubb
About: Chubb is a major insurer for both small and large businesses. It has a separate website and division for small businesses, with products specifically designed for small business owners, such as BOP and general liability coverage.
- AM Best rating: A++ (Superior)
- J.D. Power Customer Satisfaction Index Ranking: 9th out of 13 issuers
- Number of small business insurance products: 7
- Customer support: You can contact Chubb customer support through a local agent or by phone.
Our verdict
As a business owner, you hope your business will be in operation for years to come, so you want to know your insurer will be able to protect you for the long-term. Chubb has the highest-possible AM Best rating of A++ (Superior), indicating that it should be able to honor any claims today and in the future.
4. Best for Commercial Auto: Allstate
About: Allstate is known for both its personal and business insurance, but it may be an especially appropriate choice for those who need commercial auto coverage. Allstate insures a wide variety of vehicles, including box trucks and service utility trucks.
- AM Best rating: A+ (Superior)
- J.D. Power Customer Satisfaction Index Ranking: 5th out of 13 issuers
- Number of small business insurance products: 6
- Customer support: Customer service is available through a local agent, phone or online chat.
Our verdict
If you have a fleet of commercial vehicles for deliveries, moving inventory or shipping supplies, Allstate can provide necessary protection. Through Allstate, your vehicles will be protected with liability, collision, comprehensive and uninsured/underinsured motorist protection. Plus, you can also get rental car coverage to keep your business in operation if one of your vehicles is damaged in an accident
5. Best Coverage Add-Ons: The Hartford
About: The Hartford is a leading commercial insurance provider, offering both commercial business insurance and employee benefits. The Hartford has robust coverage options, including specialized insurance policies for a broad range of industries and optional add-ons you can use to customize your coverage.
- AM Best rating: A+ (Superior)
- J.D. Power Customer Satisfaction Index Ranking: 10th out of 13 issuers
- Number of small business insurance products: 17
- Customer support: The Hartford’s customer support is available through phone or local agent.
Our verdict
The Hartford is an insurance company best-suited for business owners in specialty industries, such as shipping companies that send goods overseas or those that operate in areas prone to flooding; the Hartford has commercial flood insurance and inland marine insurance options, which aren’t commonly found from all insurers.
6. Best Landlord Coverage: American Family
About: American Family has been in operation since 1927, and it sells personal, business and farm and ranch policies. For landlords that rent out houses, condos or apartment buildings, American Family has unique options to protect your building structures, and offer liability coverage.
- AM Best rating: A+ (Superior)
- J.D. Power Customer Satisfaction Index Ranking: 7th out of 13 issuers
- Number of small business insurance products: 7
- Customer support: You can reach American Family’s customer support through an agent or by phone.
Our verdict
Getting adequate coverage as a landlord can be challenging, so American Family may be a valuable resource. Its complete coverage option for landlords provides comprehensive insurance, and includes an extensive loss control program to reduce potential losses in the future.
7. Best for Data Breach or Cyber Insurance: Travelers
About: Travelers has a longstanding history and presence globally; it operates offices and has agents in the U.S., Canada, the United Kingdom and Ireland. Besides essential business insurance products like business owner’s policies and general liability, it also has specialized options for a range of industries, including companies who do most of their business online and need cyber insurance.
- AM Best rating: A++ (Superior)
- J.D. Power Customer Satisfaction Index Ranking: 12th out of 13 issuers
- Number of small business insurance products: 14
- Customer support: Travelers insurance policies are sold through independent agents, and the agent is who you can go to with any questions about coverage.
Our verdict
If you’re part of the 29% of businesses that conduct business online, Travelers provides cyber insurance coverage and added features for digital businesses. In addition to cyber insurance, it also provides customers with cyber security training modules, risk assessment tools and other resources to help you protect your business.
8. Best for Policy Discounts: Farmers
About: Farmers Insurance can trace its history to 1928, and it offers a variety of business insurance products for small businesses. And it has a larger-than-usual number of discount options which can make your small business insurance policy more affordable, including:
Corporation discount: If your business is a corporation, you can save 15% on your premiums.
Vehicle safety discount: If you have commercial vehicles with safety features like lane departure notifications, you may qualify for added savings.
Multi-policy discounts: If you purchase multiple insurance products, such as BOPs, worker’s compensation or personal auto or homeowners insurance, you may qualify for a reduction in your premiums.
- AM Best rating: A (Excellent)
- J.D. Power Customer Satisfaction Index Ranking: 4th out of 13 issuers
- Number of small business insurance products: 7
- Customer support: Farmers’ customer support is available via chat, phone or agent. You can reach customer service Monday through Friday, from 7:00 a.m. through 11:00 p.m. CST, and Saturday and Sunday from 8:00 a.m. through 8:00 p.m. CST.
Our verdict
Small business owners looking to save money may benefit from Farmers’ small business insurance. Particularly if you have a corporation, need to purchase a BOP or have commercial auto vehicles, Farmers’ discounts can be especially valuable.
9. Best for Home-Based Businesses: The Hanover
About: Founded in 1852, The Hanover is one of the oldest insurance companies on our list. It has coverage options for both personal and business insurance. The company has several specialized small business insurance products, including four separate packages for those who run home-based businesses.
- AM Best Rating: A (Excellent)
- J.D. Power Customer Satisfaction Index Ranking: Not rated
- Number of small business products: 12
- Customer support: Customer support is available via phone or agent.
Our verdict
If you have a home-based business, such as listing your property on homeshare sites, tutoring or graphic design, The Hanover could be a good match. It has several packages designed for the unique needs of home-based businesses of different sizes, ensuring you have protection for your business, inventory, equipment and any clients.
10. Best Insurance Marketplace: CoverHound
About: CoverHound is an insurance marketplace that connects users to personal and business insurance policies. It sells policies to residents of all 50 states, and it partners with major insurers like Chubb, Liberty Mutual and Nationwide.
- Number of small business products: 13
- Number of partner carriers: 7
- Customer support: You can reach CoverHound’s customer service team via email, phone or secure message. Customer support is available Monday through Friday, from 10:00 a.m. through 8:00 p.m. EST.
Our verdict
CoverHound is a good match for people looking to purchase coverage quickly and streamline their research efforts; you can get quotes from several major insurer carriers at once. Once you find a match you like, you can buy a policy online, and it will go into effect in as little as 24 hours.
What to know about Small Business Insurance
As a business owner, you likely need some kind of small business insurance. But what kind of coverage depends on the type of business you run, its size and its revenue.
The most common small business insurance products include:
- Business owner’s policy (BOP): A BOP is a basic package of business insurance products combined into one policy. It combines essentials like property insurance, liability coverage and business interruption insurance.
- Commercial auto: If you make deliveries, transport clients or use vehicles for other business operations, you’ll likely need a commercial car insurance policy.
- Liability insurance: Liability insurance protects you against lawsuits resulting from bodily or personal injuries or property damage incurred by clients or vendors in dealing with your business.
- Property insurance: Property insurance is a must if you have valuable equipment, supplies or a physical business space; it protects you from losses that may occur due to storm damage, fires or theft.
- Workers compensation: If you have employees, you’ll likely need to get workers’ compensation coverage to protect your employees in cases of work-related injuries or illnesses.
- Errors and omissions (professional liability) insurance: Businesses that give advice, such as financial planners, or provide physical care need professional liability insurance. It covers your legal expenses and other fees if you’re sued due to negligence or a failure to provide services.
Besides those basic coverage options, you can often customize your policy by adding additional coverages to your policy. Common add-ons include:
- Cyber liability: If you do most of your business online, handle sensitive information or store customer data like email dresses or payment information, you’ll need a cyber liability policy. These policies provide protection in cases of hacks or data breaches that compromise sensitive information.
- Business interruption insurance: If your business operations are interrupted and you lose revenue for a covered reason, such as building damage after a fire, business interruption coverage provides you with some compensation.
How to choose a small business insurance company
To choose a small business insurer, consider the following factors:
- Company size: Some insurers specialize in policies for freelancers or solopreneurs, while others may offer policies to businesses with 20 to 100 employees. Your company size — and how much you expect it to grow — will affect which insurer is a good fit.
- Equipment and buildings: If your business operations involve a brick-and-mortar store or warehouse, equipment, vehicles and several employees, you’ll need a much more robust policy than someone operating a small, online business from their home office. Depending on your company’s operations, you may even need specialized coverage add-ons, such as cyber insurance or commercial auto coverage.
- Risks: Businesses vary in risk based on their industry and business model. For example, an academic tutoring business will likely have less of a liability risk than a roofing company. Think about what risks your company faces, such as what kind of equipment you work with, how often clients or customers will come onto your property and if you handle sensitive information.
- Cost: Small business insurance can vary significantly in cost between companies, so it’s a good idea to get quotes from several leading small business insurers to find the best deal.
Frequently asked questions
What does business insurance cover?
Business insurance coverages and exclusions vary by policy; a basic BOP covers the following:
- Property insurance for the business’ buildings and equipment
- Business interruption insurance for the loss of earnings that may occur from fires, storm damage or other major disasters
- General liability protection that covers your legal responsibility if another party is injured or experiences damages from your business
What is general liability insurance?
General liability protects you from losses related to injuries, property damage or misleading advertising. If you have clients who visit your business premises — and therefore are at risk of becoming hurt in an accident on your property — general liability coverage is a necessity.
How much does business insurance cost?
The cost of coverage depends on a wide range of factors, including your company size, industry and location. In general, you should expect to pay anywhere from $500 to $5,000 per year for a basic business owners policy (BOP).
Our methodology
We reviewed 22 insurance providers and insurance comparison marketplaces to help you find the best small business insurer for your unique needs. To evaluate the companies and come down with our final list, we ranked the companies based on the following factors:
- Financial stability: We looked for companies with AM Best Financial Strength Ratings of A (Excellent) or better.
- Availability and eligibility: Preference was given to companies that issue policies in the majority of the U.S. states., and that insured companies with one to 100 employees.
- Product options: We looked for companies that offered at least 10 small business insurance products, including essentials like BOPs, commercial liability and business property coverage.
- J.D. Power ranking: Companies with scores above the study average were given extra weight.
- Online quote availability: Companies that allow customers to get small business insurance quotes were given additional consideration.
- Complaint index: We reviewed the complaint index, number of commercial liability complaints and types of complaints submitted about each company to the National Association of Insurance Commissioners (NAIC).
- Potential discounts: We looked for companies that offered at least one discount option for small business insurance customers.
