Starting your own business requires a significant investment of both time and money. Millions of people continue to step up to the challenge with 33 million small businesses active in the U.S. as of 2023. However, without a proper business insurance plan in place, you risk losing everything you worked so hard to build.

According to a survey released by Next Insurance, 90% of business owners weren’t sure if they had adequate coverage. Worse, 29% had no business insurance coverage at all, leaving their business and investments vulnerable to natural disasters, theft or lawsuits.

Small business insurance provides critical protection for your business, but there are several different types of coverage. Understanding the options available and what to expect in terms of cost can help you find the right coverage for your business (and your budget).

7 common types of small business insurance

A customer visits your store and slips and breaks his arm while browsing the store aisles.

A fire breaks out and spreads to your warehouse, destroying your inventory.

Or a thief breaks into the office and steals your laptop.

Whatever the case may be, there are many unexpected and horrifying scenarios that can threaten your business.

Like your personal car or homeowners insurance policy, small business insurance acts as a safety net for your business, protecting your business property and assets against common disasters or accidents.

Whether you’re the sole employee of your own company or you have dozens of workers, your small business likely needs some form of protection. What kind of insurance your business needs depends on the type of work you do, the size of your operation and your location. These are some of the most common business insurance options:

Business owners policies (BOPs)

A BOP is actually an insurance package that combines several forms of coverage together, making it a simple option for small business owners. BOPs usually include general liability, property insurance and business interruption insurance.

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BOPs are often more cost-effective than purchasing each type of coverage separately, and you can customize your BOP with optional add-ons, such as cyber risk insurance or commercial auto coverage.

General liability

General liability insurance protects you against financial losses that may result from bodily injuries or property damage that occur due to your business. For example, if a client is injured on your business premises, general liability coverage would help cover your legal bills, the medical bills of the affected person and any damages resulting from a lawsuit.

Product liability

If you produce or sell products, product liability coverage protects you against losses that result from products that you make, distribute or sell. For example, if a customer needs medical attention after getting hurt by a product you manufactured, product liability insurance would help you with the legal and medical expenses.

Professional liability

Professional liability insurance covers your legal expenses and damages related to issues that result from your professional negligence or mistakes.

Commercial property

If your business property, equipment or inventory is damaged by a storm, fire or theft, commercial property insurance will reimburse you for your losses.

Home-based business

According to the Small Business Administration, more than half of all small businesses are home-based. If you run your business from your home, you’ll need separate coverage from your personal homeowners or renters insurance policy.

Home-based business insurance provides added protection for your business equipment and supplies, as well as protection against liability issues that aren’t covered by your personal policies.

Workers’ compensation

If you have employees, you’re usually required to have workers’ compensation insurance. Workers’ compensation pays for your employees’ medical care and a portion of their wages if they’re injured or become ill while working.

Other types of coverage

Beyond the seven main types of small business insurance, there are many other types of coverage. If your company works in particular industries or has specialized needs, you may need additional insurance. Some common add-ons include:

• Business interruption: If your business were forced to close due to a covered reason, such as storm damage, business interruption coverage will help cover your lost income.

• Commercial auto: If you have vehicles that you use for your business, including delivery trucks, you’ll need a separate commercial auto policy.

• Cyber liability: For businesses that sell or store customer information online, cyber liability insurance is a must. If your information — or your customers’ details — are compromised, cyber insurance covers the costs of system recovery efforts, notification expenses, fines and identity theft protection for your affected customers.

How to purchase small business insurance 

To purchase small business insurance, follow these steps:

1. Think about what coverage you need: Consider what kinds of insurance you need. For example, if you have company vehicles, you’ll likely need commercial auto coverage in addition to general liability and professional liability policies. And if your business operates in areas that are prone to natural disasters, such as floods or earthquakes, you may need separate commercial policies for those issues too.

1. Shop around: Prices can vary significantly by insurer. Many insurers allow you to request quotes for small business insurance online; enter information about your company’s age, revenue, industry and employees, and the insurer will give you an estimate for your desired coverage.

2. Contact an agent or broker: Once you know what kind of insurance you need, you can reach out to commercial insurance brokers or company agents to get exact pricing details and purchase a policy.

According to Mark Friedlander, director of corporate communications with the Insurance Information Institute, a broker can be a valuable resource as you begin the process.

“A qualified broker can help a business owner collect all the information they will need to apply for a policy, and help them comparison shop among several options and quotes,” he said. “Before hiring [a broker], we recommend reviewing the broker’s background and experience as well as the services provided and any fees charged.”

The National Association of Insurance Commissioners has a tool you can use to find insurance agents and brokers in your area.

Small business insurance FAQs

Do I need small business insurance if I’m just starting out?

Many people put off purchasing coverage because of the expense, but according to Chris Rhodes, chief insurance officer of NEXT Insurance, that mindset could be a costly mistake.

“Purchasing insurance should be one of, if not the first, things on your checklist as a new business owner,” he said. “Regardless of revenue or investment level, having insurance is crucial for protecting your future livelihood.”

At a minimum, simple BOP coverage or other basic forms of coverage are a good starting point.

“As a rule of thumb, small business owners should purchase general liability or professional liability coverage as a first line of defense,” Rhodes said.

How much does small business insurance cost?

The cost of small business insurance depends on several factors, including your company’s location, size and industry. BOP coverage, which bundles common insurance types onto one simple policy, typically costs between $40 and $170 per month.

What factors affect small business insurance costs?

Several factors affect cost, including:

• Service or product provided: Certain industries or business types, such as those in construction or transportation, are more likely to be involved in accidents, so premiums tend to be more expensive to offset the higher risk.

• Location: If you live in an area with a high cost of living or with a higher-than-average crime rate, your premiums will typically be higher.

• Size: If you have employees, your premiums will be much higher than that of a business owner who is a solopreneur. The larger the company, the more expensive your premiums will be.

Does my state require business insurance?

If you have employees, federal law requires you to have workers’ compensation, unemployment and disability insurance. But in some states, certain professions have additional insurance requirements.

For example, in Colorado, physicians are required to have malpractice insurance. In Oregon,

lawyers must maintain malpractice insurance with the state Professional Liability Fund.

Visit your state professional association or regulatory commission to find out what coverage you’ll need.

Do freelancers need business insurance?

Freelancers can benefit from business insurance, even if they don’t work in-person with customers. Basic coverage, including professional liability coverage, can protect against issues like lawsuits over mistakes or errors.

The takeaway

To ensure your business isn’t stalled or disrupted by weather, theft, accidents or lawsuits, small business insurance is a crucial purchase. As you begin shopping for insurance, request quotes from leading small business insurance companies.

“As a general rule,” Friedlander said, “small business owners should get business insurance quotes from at least three different companies.”

Shopping around will help you find the best coverage at the lowest rate.

This story was originally featured on Fortune.com