In 2025, having business insurance is more important than ever. Companies today face many risks like cyberattacks, lawsuits, and supply chain issues. A recent report says small businesses lose about $20,000 a year from unexpected problems, and cybercrime is expected to cost $10.5 trillion globally.
No matter the size of your company—whether you’re a startup or a growing business—having the right insurance helps protect your property, employees, and reputation. This guide will explain the types of business insurance, why it matters, and how to choose the best policy for your needs.
Types of Business Insurance
Business insurance includes different types of policies to cover different kinds of risks. Here are the most common ones:
- General Liability Insurance: Covers injuries, property damage, or advertising mistakes caused by your business. Example: If a customer slips and gets injured in your store (average claim: $30,000), this insurance pays for legal costs and settlements.
- Property Insurance: Protects your business property like buildings, tools, or inventory. Example: If a fire destroys $50,000 worth of inventory, this policy helps cover replacement costs.
- Cyber Insurance: Cyberattacks have increased by 15% in 2025. This insurance covers losses from things like data breaches or ransomware. It can help pay for things like customer notifications, legal help, and recovering data (average breach cost: $4.5 million).
- Workers’ Compensation Insurance: Required in most states for businesses with employees. Covers medical bills and lost wages if an employee is hurt on the job (average claim: $40,000).
- Professional Liability Insurance (E&O): For service businesses, this protects against negligence or bad advice. Example: A consultant sued for a mistake might face $50,000–$100,000 in legal costs. This policy covers that.
Tip: Each policy is made for different risks. Choose based on your industry and business type.
Why Your Business Needs Insurance
Business insurance is not optional—it protects your business and shows you’re serious. Here’s why it’s so important:
- Legal Requirements: Most states require workers’ comp if you have employees. Some industries (like construction) also require general liability insurance. Not having the right coverage can lead to fines or even shutdown.
- Protection from Big Financial Losses: About 40% of small businesses face lawsuits every year. A single claim could cost thousands. Insurance pays legal costs, settlements, and damages, so one mistake doesn’t ruin your business.
- Builds Trust with Clients: Many clients and landlords require proof of insurance before signing contracts. It shows you’re professional and responsible, which can help you get more deals.
Example: A bakery hit with a $20,000 customer injury lawsuit would go out of business without liability insurance. A tech company hit by a $100,000 cyberattack could recover with cyber insurance.
How to Choose the Right Business Insurance
Picking the right insurance starts with knowing your risks and budget. Here’s how to do it:
- Assess Your Risks: Think about what risks your business faces. A store might need liability and property insurance, while a tech firm might need cyber insurance. Use online tools or talk to a broker to help you figure this out.
- Work with a Broker: A broker who specializes in commercial insurance can compare plans from different companies. They’ll help explain complicated details and suggest useful add-ons like business interruption insurance.
- Compare Multiple Quotes: Use websites like Insureon, Hiscox, or The Hartford to get quotes. Compare at least three quotes to save 15–25%. Make sure all the coverages you need are included.
- Consider a Business Owner’s Policy (BOP): A BOP combines general liability and property insurance into one, and it’s often 10–20% cheaper. It’s great for small businesses in retail or consulting but might not fit high-risk industries.
Don’t forget to check what’s not covered and ask about add-ons to fill in the gaps.
Top Business Insurance Providers in 2025
Here’s a comparison of top insurers in 2025 based on coverage, customer support, and price:
| Insurer | Key Features | Best For | Sample Annual Premium(Small Business, $1M General Liability) |
|---|---|---|---|
| The Hartford | Strong BOP options, custom industry coverage, great claims support | Small to medium businesses | $500–$1,200 |
| Travelers | Flexible plans, great cyber insurance, risk tools | Tech and retail businesses | $600–$1,300 |
| Hiscox | Low-cost E&O and cyber coverage, fast quotes, small business focus | Freelancers and consultants | $400–$1,000 |
| Chubb | High limits, global coverage, extras for complex businesses | Large or high-risk businesses | $1,000–$2,000 |
Company Highlights
- The Hartford: Great for small businesses. Offers special coverage for industries like food, retail, and construction.
- Travelers: Ideal for businesses with online risks or valuable property.
- Hiscox: Made for freelancers, consultants, and startups. Easy to get fast online quotes.
- Chubb: Best for larger businesses or companies with global operations. Offers specialized extras like kidnap & ransom insurance.
Common Mistakes to Avoid
Avoid these common errors to make sure your insurance actually helps when you need it:
- Underinsuring to Save Money: Getting the cheapest policy might leave you uncovered in serious situations. A $500,000 policy won’t help much in a $1 million lawsuit. Don’t cut corners.
- Not Updating Coverage: As your business grows—adding employees or equipment—you need more protection. Update your policy after any major changes.
- Ignoring Cyber Insurance: Over 60% of small businesses are attacked by hackers. Without cyber insurance, even one breach could cost you $50,000 or more. If you collect customer data or operate online, you need it.
Work with your broker to review your plan every year or after big business changes.
Final Thoughts
In 2025, business insurance is essential for protecting your company from lawsuits, property loss, cyberattacks, and more.
To get the best coverage:
- Learn about key policies like general liability, property, and cyber insurance
- Identify your risks
- Compare quotes from top providers like The Hartford, Travelers, and Hiscox
- Avoid common mistakes like underinsuring or ignoring cyber threats
You can get personalized quotes by visiting Insureon or contacting a licensed broker. With the right coverage, your business can stay protected and grow—no matter what comes your way.