One of the most overlooked parts of running a business is getting the right insurance in place.

Too many entrepreneurs are one accident, lawsuit, or tech mishap away from financial disaster—and don’t even realize it until it’s too late.

Now let me be clear:
I’m not a licensed insurance broker, and this post isn’t personalized advice. But as a CFO and CPA who’s worked with dozens of small business owners, I can tell you which types of insurance I see most commonly used—and what they’re designed to protect.

Let’s walk through the essentials, and you can take it from there with a licensed professional who understands your specific risk profile.

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Why Business Insurance Matters (Even If You’re Small)

Whether you’re a solopreneur, growing an agency, or running a seven-figure operation, insurance exists to protect your business assets, reputation, and survival in the event of:

• Accidents (onsite or remote)
• Lawsuits or claims (whether justified or not)
• Data breaches or technology issues
• Damage to physical property
• Client or contractor disputes

Without proper coverage, you may end up personally liable for legal fees, settlements, medical bills, or lost revenue.

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Types of Business Insurance to Consider

Here are the most common categories of insurance small businesses may need, depending on their industry, structure, and operations.

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1. General Liability Insurance

What it covers:
Third-party claims for bodily injury, property damage, and reputational harm (like slander or libel).

Example: A client trips in your office. Your general liability insurance helps cover their medical bills and your legal defense.

Who needs it:
Most businesses, especially if you work in-person, have a physical space, or work with clients onsite.

🔗 https://www.sba.gov/business-guide/launch-your-business/get-business-insurance

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2. Professional Liability Insurance (aka Errors & Omissions or E&O)

What it covers:
Claims related to negligence, mistakes, missed deadlines, or failure to deliver promised results.

Example: A client claims your service caused them financial harm and sues. This covers your legal costs—even if you did everything right.

Who needs it:
Service providers, consultants, coaches, agencies, creatives, and professionals who offer advice or deliverables.

🔗 https://www.nationwide.com/business/insurance/professional-liability/

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3. Business Owner’s Policy (BOP)

What it covers:
A bundled policy that typically includes general liability and property insurance. Covers things like fire, theft, and some loss of income.

Who needs it:
Brick-and-mortar businesses, those with physical assets or inventory, or those looking to bundle and save on premiums.

🔗 https://www.hiscox.com/small-business-insurance/business-owners-policy

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4. Cyber Liability Insurance

What it covers:
Costs related to data breaches, hacks, ransomware, and digital liability.

Example: Your client database is compromised. This can cover recovery costs, client notifications, legal claims, and credit monitoring services.

Who needs it:
Any business that stores customer data, uses cloud software, or processes payments online.

🔗 https://www.iii.org/article/cyber-risk-and-insurance

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5. Workers’ Compensation Insurance

What it covers:
Medical expenses and lost wages for employees who get injured on the job.

Required in most states if you have employees—even part-time.

Who needs it:
Any business with W-2 employees (and in some states, even 1099 contractors).

🔗 https://www.sba.gov/business-guide/manage-your-business/pay-taxes#section-header-4

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6. Commercial Auto Insurance

What it covers:
Business use of vehicles—delivery, transport, or travel. A personal auto policy usually won’t cover business-related claims.

Who needs it:
Businesses that own or lease vehicles, or use personal vehicles for business purposes regularly.

🔗 https://www.nerdwallet.com/best/insurance/commercial-auto-insurance

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7. Key Person Insurance

What it covers:
A life insurance policy on a key employee or founder. If that person dies or becomes disabled, the business receives a payout to help cover the loss.

Who needs it:
Businesses that rely heavily on the founder or a few critical team members.

🔗 https://www.investopedia.com/terms/k/keyman-insurance.asp

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8. Business Interruption Insurance

What it covers:
Lost income due to events like natural disasters, fire, or forced closure. Often bundled with a property or BOP policy.

Who needs it:
Businesses with physical locations, storefronts, or warehouses that can’t operate remotely.

🔗 https://www.investopedia.com/terms/b/business-interruption-insurance.asp

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9. Health Insurance for Employees (Yes, It Can Be Affordable)

What it covers:
Medical care for employees and their families. But here’s the part most business owners miss: you don’t have to commit to a high-cost group plan.

Try an ICHRA.
That stands for Individual Coverage Health Reimbursement Arrangement, and it lets you:

• Reimburse employees tax-free for individual health premiums and medical costs
• Avoid expensive, one-size-fits-all group plans
• Set your own budget and control how much the business contributes

Who needs it:
Businesses with W-2 employees who want to offer real health benefits without blowing up their margins.

🔗 https://www.healthcare.gov/small-businesses/learn-more/ichra/

This is one of the most flexible and affordable ways to offer health coverage while still keeping your business lean and compliant.

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Final Thoughts

Insurance won’t prevent things from going wrong—but it can make sure one mistake or lawsuit doesn’t wipe out everything you’ve built.

Start with what’s essential, get the right coverage for your stage of business, and don’t be afraid to lean on experts.

Again: I’m not a licensed insurance professional, and this post is purely educational. Talk to a licensed broker before making any decisions—but go into that meeting knowing what questions to ask.

If you’re inside Financial Foundations Accelerator, we walk through how to budget for insurance, track policy costs, and integrate it into your broader financial plan. (Not an insider? Get the deets, HERE)

And if you’re working with me 1:1, we make sure your insurance costs are factored into your cash flow strategy, your coverage aligns with your business structure, and you’re not leaving yourself or your team exposed by accident. (Need a CFO who helps you with this? Let’s CHAT)

You don’t need to overinsure—but you do need to protect what you’re building.

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Need a referral to a trusted small business insurance broker? Shoot me a message—I’ll connect you.