What Insurance Does a Small Business Need?
Running a small business is all about managing risk while maximizing opportunity. But too often, the question of protection gets pushed aside — until a lawsuit, fire, or data breach forces the issue. So, what type of insurance is best for a small business? The answer depends on your operations, location, and exposure, but certain policies are must-haves across the board. With the right combination of policies — and the right partner — small-business insurance can be a smart, proactive step toward long-term stability. Oakwood Risk’s business insurance solutions are designed to do exactly that.
Why Do Small Businesses Need Insurance?
A single uncovered event can derail your business overnight. Whether it’s a customer slip-and-fall, flood damage to your storefront, or an employee injured on the job, insurance is what stands between recovery and ruin.
Today’s risks go far beyond the obvious, too. Increasingly, small businesses face cyberattacks, wrongful termination claims, and regulatory headaches — all of which carry steep costs without proper coverage.
According to the U.S. Chamber of Commerce, even the smallest companies should have multiple insurance policies in place to address liability, property, and personnel concerns. Every business is unique, but the financial risk of going without coverage is universal.
Core Small-Business Insurance Coverages
There are three foundational policies every business should consider:
- General liability insurance covers third-party bodily injury, property damage, and personal injury (like libel or slander). It’s often required for leases and client contracts.
- Commercial property insurance protects your building, contents, and equipment from fire, theft, vandalism, and some types of weather damage.
- Workers’ compensation insurance is required in most states. It covers medical costs and lost wages for employees who are injured or become ill due to work-related causes.
Bundling these essentials into a business owner’s policy (BOP) can offer cost savings and streamlined coverage. If you’re launching or scaling your business, a BOP should be in place from day one.
Optional Coverages That Could Save You Later
Basic insurance is just the beginning. Depending on your operations, you may need additional protection.
- Cyber liability: Data breaches and ransomware attacks are becoming more common, even among the smallest firms. This policy helps cover recovery costs, notification requirements, and legal expenses.
- Professional liability (errors and omissions): If your business gives advice or provides professional services, this coverage protects against claims of negligence, misrepresentation, or failure to deliver.
- Directors and officers (D&O): For companies with a leadership team or board, D&O insurance shields personal assets from legal actions tied to business decisions.
- Employment practices liability (EPLI): This coverage helps handle claims of harassment, discrimination, and wrongful termination.
- Commercial auto: If your business uses vehicles for deliveries, client meetings, or transporting goods, this coverage is essential.
- Umbrella insurance: This coverage adds an extra layer of protection over your liability policies, useful for businesses with high foot traffic or elevated exposure.
These add-ons may not be top of mind when first launching, but they often prove invaluable as your business grows and your risks evolve. Use this business insurance checklist to evaluate what’s missing.
Choosing the Right Small-Business Insurance Partner
There’s no one-size-fits-all insurance strategy, and that’s why working with a broker like Oakwood Risk is crucial. Experienced business insurance companies understand the nuances of different industries, state requirements, and evolving risks.
Whether you’re wondering, “How much is business insurance?” or you’re ready to reassess your current policies, Oakwood Risk provides the insight and flexibility to keep your coverage aligned with your growth. We’ll help you identify gaps, reassess annually, and stay protected without overpaying.
Contact us today to learn more.
About Oakwood
Oakwood Risk provides industry-leading insurance services, solutions, and counsel to our clients. Our professionals are valued for their ability to provide outstanding customer service, with a commitment to the relentless pursuit of value-added solutions, results, and comprehensive coverage.
