If you’ve already set your business up as a limited liability company (LLC), you may be wondering if that’s enough. After all, an LLC separates your personal assets from your business ones. Do you really need to go the extra mile and get LLC insurance too?

Business insurance is a smart buy. Some types of coverage are essential for all businesses—whether you’re a solopreneur with a budding freelance business or the CEO of a construction company. Here’s a closer look at why your LLC might need business insurance (regardless of its size), along with the most common coverage types.

What is LLC Small Business Insurance?

LLC small business insurance refers to coverage types designed to protect business assets. For example, an essential business insurance coverage type is liability insurance. This covers your LLC for problems like accidental property damage and injuries caused to others, such as a customer who trips and falls while shopping in your store.

You can choose between several different small business coverage types. Pick the coverages that best suit your LLC’s needs. For example, if you use a car for business purposes, you can buy a commercial auto insurance policy.

Even with an LLC, small business insurance is important to have. This is because your LLC structure only protects your personal assets from lawsuits. It leaves your business assets completely exposed—unless you have LLC small business insurance.

What’s Covered by LLC Small Business Insurance?

At its core, LLC small business insurance protects your business from financial losses in the event of an accident. What’s covered will depend on the coverage types you buy.

Here are some of the main types of small business insurance.

Business owners policy for LLCs

Think of a business owners policy (BOP) as a bundled insurance package for small businesses. It can be a great fit for LLCs because it covers some of the most common risks you may face, including property damage and liability.

BOPs typically come bundled with these three policies:

• General liability insurance. This covers accidental injuries and property damage to others. General liability insurance also pays for legal costs, judgments and settlements if you’re sued.

“If your LLC has vendors or customers—or if you lease or own property—general liability insurance is highly recommended,” says Dana Beck, Chief Underwriting Officer at Travelers. “In fact, vendors and landlords often require it.”

• Commercial property insurance. As an LLC, you likely have some business property, whether it’s office furniture, equipment or inventory. If that property is damaged or destroyed by a problem covered by your policy (like a fire), commercial property insurance can help you repair or replace it.
• Business interruption insurance. This coverage can help your LLC stay afloat if you have to temporarily close your doors due to a problem covered by your policy. For example, say a severe storm damages your office, and you must close for two weeks while repairs are made. Business interruption insurance can help cover the cost of rent at a temporary location, employee salaries and other necessary expenses.

Other types of business insurance for LLCs

BOPs are a great starting point, but they aren’t the only type of business insurance your LLC may need. In addition to a BOP, you may want to consider one or more of these coverage types, depending on your situation:

• Commercial auto insurance. Your personal car insurance policy most likely excludes coverage for business use. This means you’ll need to purchase commercial auto insurance if you or your employees use your vehicle for work-related purposes.
• Workers compensation insurance. If you have at least one employee, you’re required to have workers compensation insurance in most states. This type of insurance can help you cover the cost of medical bills, lost wages and other expenses associated with workplace injuries or illnesses.
• Professional liability insurance. Also known as errors and commissions insurance, this type of policy is vital for any LLC that provides professional services, such as consulting, accounting or financial planning. It helps cover the cost of claims against professional mistakes.

“Even if you’re doing everything right, people make mistakes,” says Paige Nelson, Director of Product Development at Acuity Insurance. “If you’re a contractor and install the wrong flooring, it didn’t cause any damage, but it still needs to be replaced. This coverage would pay for that error.”

• Product liability insurance. If your LLC manufactures, creates, distributes or sells physical products, then product liability insurance is a good coverage type to have. It can help you cover the cost of litigation if your products cause property damage or injuries to someone else.

Do You Need LLC Small Business Insurance?

In some high-risk industries, like agriculture, construction and manufacturing, LLC small business insurance can be a must-buy. But even in low-risk industries like freelancing, bookkeeping and other home-based businesses, LLC insurance is still highly encouraged.

The future is full of unknowns, and you never know when a thief may steal your laptop, an artist may sue you for copyright infringement or a client may take you to court for breaching a service contract.

“Many businesses operate for years without being sued, but if you are sued, the payments requested by attorneys can be catastrophic,” says Nelson.

Think of it like this: If you don’t have the money to replace expensive equipment or fight a lengthy court battle, you need some type of LLC small business insurance—even if it’s just a professional or general liability policy.

How Much Does LLC Small Business Insurance Cost?

A business owners policy costs $57 per month on average, with 12% of business owners paying less than $33 per month, according to Insureon.

Your LLC small business insurance costs will vary depending on factors such as:

• Your type of business
• The size of your business
• Location of your business
• Number of employees
• Payroll
• Business assets
• The years of experience of your business
• The amount of coverage you buy
• Your insurance deductible amount
• Your insurance claims history

How Do I Get LLC Small Business Insurance?

You can find cheap small business insurance for your LLC in a few steps:

• Determine how much coverage you need. A business owners policy is a good place to start. Then you can add additional coverage types as necessary.
• Shop around. Compare business insurance quotes from multiple insurance companies. You can shop online or speak with an independent insurance agent who specializes in small business insurance.
• Bundle policies. You may need several different coverage types to cover your LLC’s bases. You’ll typically save money by purchasing multiple policies from the same insurance company.
• Manage your LLC’s risk. You may be able to get discounts if you take steps to mitigate your LLC’s risks, such as installing security alarms, creating a safe workspace, reducing your exposure to cyber threats and developing an employee handbook.

To get the most accurate small business insurance quotes, make sure you have all your LLC information ready, such as:

• Your contact information
• Your business location, address and details
• The type of business you operate
• Your estimated business revenue
• How many employees you have

Once your policy is in place, consider reassessing your risk at least once a year or anytime your business liabilities change. For example, expanding the types of services you offer, moving to a new location or hiring more employees could mean you need to add more coverage to your policy.