A Guide To Business Insurance For LLC

Business insurance for LLCs is an important part of your business plan. A limited liability company (LLC) is a type of business structure that helps to separate your personal and business assets and can shield you from personal liability.

However, operating an LLC or any kind of business exposes you to an unavoidable level of additional risk. An accident, property damage, costly mistake, or lawsuit can threaten your business at any time. Business insurance won’t eliminate these risks, but purchasing the right types of business insurance for your LLC offers important protections.

What Is LLC Business Insurance?

LLC business insurance is a collection of business insurance policies that protect your LLC from the costly effects of a lawsuit, property damage, worker mistakes, and other situations. Because every LLC is different, the types of coverage your business needs will be unique.

There is no specific LLC insurance policy a business can purchase, so look for several policies bundled together. Most LLC insurance bundles will have a foundation of general liability insurance or a business owners policy (BOP) that contains both general liability and commercial property insurance.

There is no one perfect fit for each company. Different risks require different policies, and only you and an insurance expert can identify the best choices for your business.

How Does LLC Insurance Work?

LLC insurance protects your business, so you don’t have to worry about how the worst-case scenarios could affect you.

Accidents and missteps are inevitable. While you can do a lot to reduce business risks, some things are beyond your control. When you cover your business with insurance policies specific to your business needs, you can protect your income and assets from whatever comes your way.

Once you decide to purchase insurance for your LLC, an insurance professional can help you identify your business risks and decide on the proper insurance coverage.

What Insurance Does My LLC Need?

Most experts recommend starting with basic general liability coverage. From there, you can add policies that are tailored to your business’s needs.

Most insurers offer a general liability policy or a bundle of basic coverage called a business owners policy (BOP). The most common BOP bundle includes general liability and commercial property coverage, though your insurer may offer a slightly different combination or allow you to customize your business insurance bundle.

In the next section, we’ll discuss the most common types of business insurance policies. Once you’re familiar with the types of coverage available, you’re ready to talk to an insurance agent or apply for coverage online.

12 Types Of LLC Insurance Your Business May Need

The right combination of business insurance for LLCs depends on your business, industry, and specific risks. Here is a rundown of the most common types of business insurance.

How Much Does LLC Insurance Cost?

Many business decisions come down to financial considerations, and it’s hard to decide on your LLC business insurance needs when you’re not sure about the costs of business insurance.

Fortunately, it’s easy to get a personalized price quote for LLC business insurance. Most LLCs will find affordable coverage, especially if you’re a smart shopper who knows what types of coverage you need and is willing to check with several companies to find the right coverage at the right price.

One insurance company surveyed 50,000 small business owners and found the average company pays about $30 a month for general liability insurance, and 95% pay less than $50. This means you’re likely to pay anywhere from $360 to $600 a year for liability coverage for your LLC. That’s a small price to pay when you consider the protection and peace of mind you’re purchasing.

Once you’ve acquired foundational insurance, you can add additional types of coverage. Most LLC business insurance is optional and not legally required. A few exceptions are workers’ compensation, small business health insurance, and commercial auto coverage.

We recommend talking with your insurance agent or broker to make sure you have the right types of coverage for your LLC.

The Bottom Line On Business Insurance For LLCs

Finding the right LLC business insurance doesn’t have to be difficult or expensive. Knowing the types of coverage you want for your LLC and understanding the factors that affect your costs are the key.

Start with an idea of the risks your LLC might face. Do you operate only online? You will have a lower premium than someone with a storefront. Do you need to insure vehicles for employees to drive for doing business? By identifying your needs, you’ll be prepared to pick the right mix of LLC business insurance.

You can apply for business insurance online and gain a personal quote within minutes from some providers. Or consider working with an insurance broker like Coverwallet and Gallagher Business Insurance. They’ll compare different options for you and walk you through the steps required to purchase business insurance. Reputable insurance providers like The Hartford and Nationwide also offer LLC insurance and give you the option of working directly with an agent who can guide you.

No matter what types of coverage and which insurance provider you choose, your business needs protection. Don’t under-insure your business out of a false sense of optimism or risk denial. Protect yourself, your LLC, and your future by starting the process of buying insurance today.

LLC Business Insurance FAQs