Running your own small business gives you entrepreneurial freedom but also comes with substantial risk. Faced with a lawsuit, for example, your company risks losing its assets—in the worst cases, it could spell the end of your venture. If you’re a sole proprietor, you could see lawyers come after your personal property, from money to real estate.
Commercial insurance policies protect businesses from ruin if catastrophe strikes—because even the most prudent business owner can’t foresee inevitable mishaps. With commercial insurance, like a general liability insurance policy, your business lessens the risk of losing its assets to theft, disasters, and lawsuits.
What is commercial insurance?
Commercial insurance coverage, also known as business insurance coverage, is designed to protect commercial property and assets in the event of lawsuits, theft, property damage, and disasters. Much like a personal policy, a commercial insurance policy collects monthly premiums from its clients and then provides cash payments to cover losses.
State laws often require businesses to carry certain types of insurance, including workers’ compensation insurance (which provides payments to employees injured on the job) and commercial auto insurance (which covers the business liability for commercial vehicle accidents). Beyond these mandated policies, companies frequently purchase other insurance coverages that align with their business type, including:
- General liability insurance. A general liability insurance policy is the first defense against damaging business exposures. It protects your business in the face of property damage, personal injury, misleading advertising, slander, and libel. A good professional liability policy pays out on your behalf if someone sues your company for compensatory damages, punitive damages, or general damages (including “pain and suffering”).
- Commercial property insurance. A commercial property insurance policy protects equipment, real estate, furniture, appliances, and even cash used for business purposes. Because this property tends to be expensive, most companies don’t have enough money on hand to cover damage or loss. Commercial property insurance can also provide funds for repairs or replacements.
- Cyber liability insurance. Today’s businesses face rising cyber threats—including ransomware and data breaches—aimed at companies and customers. The right coverage from cyber liability insurance can protect you if you leak customer data like credit card numbers or Social Security numbers.
The seven best commercial insurance companies
- Berkshire Hathaway
- Next Insurance
- The Hartford
You have ample options when shopping for commercial insurance for your business. As you consider different providers, you’ll note differences in coverage limits, monthly premiums, and specialized policies. These seven commercial insurance companies are generally well regarded in the industry and popular among business owners for various reasons. They are listed in no particular order.
Unlike other prominent insurers, Chubb doesn’t run extensive TV ad campaigns and may not be as well known among the general public. Don’t let this sway you—Chubb is often considered the gold standard within the industry.
- Policies offered. Chubb offers commercial insurance for over a thousand types of businesses. Its clients range from multinational corporations and famed fine art dealers to simple startups with a few employees. Chubb’s popular Customarq General Liability plan bundles policies that relate to your work while eschewing those you’d never use.
- Advantages. Chubb’s sterling reputation is its most significant selling point. Chubb routinely wins industry accolades and was rated top in the 2020 JD Power US Small Commercial Insurance Study. AM Best—owned by Chubb’s competitor, Berkshire Hathaway—rated Chubb’s Financial Strength Rating (FSR) as A++ (Superior).
- Disadvantages. Chubb doesn’t provide insurance quotes online. You can only purchase a policy through a licensed agent in person or over the phone.
2. Berkshire Hathaway
The average American might know Berkshire Hathaway as the profitable conglomerate controlled by billionaire investor Warren Buffett. With the second-largest market share of any insurer, Berkshire Hathaway plays a significant role in the commercial insurance marketplace.
- Policies offered. Berkshire Hathaway has two signature insurance offerings. The first is biBERK, which combines general liability insurance with commercial property insurance. This alone covers the liability exposure of many businesses. Then there’s THREE, named for the three pages that outline the policy’s coverage. THREE bundles workers’ comp, commercial auto, and cyber liability insurance with general liability insurance and commercial property insurance.
- Advantages. Berkshire Hathaway’s THREE policy conveniently bundles policies required by law (workers’ compensation, commercial vehicle insurance) and policies that are legally optional but highly recommended (general liability insurance, commercial property insurance, cyber insurance). The company is well-funded and has a strong national reputation.
- Disadvantages. Although Berkshire Hathaway has been in the insurance business since the 1960s, its biBERK and THREE policies debuted in the 2010s, meaning there are fewer real-world use cases to attest to their value over time.
3. Next Insurance
Next is a new entrant in the commercial insurance space. It targets small businesses and sole proprietors without a large number of employees or multiple commercial properties. If you’re self-employed and need coverage, Next might offer the coverage you need at a premium you can afford.
- Policies offered. Next offers most policies a small business owner would need, including general liability, commercial property, professional liability, and errors and omission insurance. It also provides limited workers’ compensation policies.
- Advantages. Most American companies are small and may not reap the business income to bankroll a policy from the big insurance conglomerates. Next policies are structured with these small businesses in mind, focusing on the coverage they need at prices that work with modest revenue streams.
- Disadvantages. Next makes a lot of sense for smaller businesses, but its policies may be insufficient for larger companies with large corporate footprints. Next gives instant online quotes, so it’s easy to find out if they have workable offerings for you.
Hiscox also offers policies designed for smaller businesses. It distinguishes itself by providing niche businesses with highly targeted insurance policies.
- Policies offered. Hiscox policies can be comprehensive, like general liability insurance, or incredibly specific, like snow removal insurance. The company prides itself in customization and provides policies that may be hard to find from other insurers.
- Advantages. Hiscox is anything but a one-size-fits-all insurance provider. Hiscox’s website offers tailored policy recommendations based on your business type, and you can further customize your policy by speaking to an agent.
- Disadvantages. Some of Hiscox’s policies are underwritten by other insurance companies, with Hiscox serving as a middleman. Other policies only apply to tiny businesses with minimal employees.
Travelers Insurance, which dates back to 1853, ranks behind only Chubb in terms of commercial insurance premiums written. Today, it offers an array of individual and commercial policies.
- Policies offered. Travelers’ commercial insurance offerings start with standards like general liability, professional liability, property, and commercial vehicle insurance. Policies expand to include things such as cyber insurance, global insurance, and boiler and machinery insurance.
- Advantages. Travelers combines a broad array of policies with competitive prices. It offers some of the best one-stop shopping of any major insurance provider.
- Disadvantages. Travelers does not provide online quotes, so you’ll need to work directly with an agent to explore policies that fit your budget.
6. The Hartford
The Hartford was founded in 1810, making it one of the oldest insurance providers in the United States. In the present day, the company stands out for its quick online insurance quotes. Famously associated with property and casualty insurance, The Hartford offers group insurance (shared among a group like a trade association) and mutual funds.
- Policies offered. The Hartford provides over a dozen commercial insurance policies, ranging from the standard (general liability insurance, commercial property insurance, workers’ compensation insurance) to the niche (marine insurance, management liability insurance).
- Advantages. The Hartford has centuries of experience. It can appeal to all types of small businesses. It enjoys a strong reputation within the insurance community, including a recent accolade as the industry’s US Environmental, Social and Governance (ESG) leader.
- Disadvantages. The Hartford mostly appeals to smaller businesses and may not be right for the larger corporate clients. Despite its seniority, The Hartford is now smaller than the biggest American insurers—the 13th largest in the industry, to be exact.
Progressive promotes itself aggressively, giving it high-level name recognition. It offers several commercial insurance policies and has built a solid reputation for its commercial automobile insurance.
- Policies offered. Progressive offers five central commercial policies: general liability, professional liability, workers’ compensation, commercial auto, and a bundled business owners policy that combines these policies under a single monthly premium.
- Advantages. Progressive is well known among the general public and within the insurance industry. Its vehicle insurance policies have won acclaim for their versatility and comprehensive coverage, with a policy for just about every type of vehicle.
- Disadvantages. While Progressive offers an impressive array of vehicle policies, its commercial liability policies are fewer and less specific than many competitors.
Commercial insurance companies FAQ
What are the common types of commercial insurance?
The most common commercial insurance policies are general liability insurance, professional liability insurance, commercial vehicle insurance, and commercial property insurance. Some insurers bundle all of these policies into a single plan with a single premium.
What is the difference between personal insurance and commercial insurance?
Personal insurance is for individuals and covers property and casualty claims related directly to the individual who holds the policy. Commercial insurance, on the other hand, covers an entire business.
What type of insurance do you need for a commercial property?
Commercial properties must be insured through a commercial property insurance policy.