Learn about coverage, costs and requirements for business insurance for an LLC.
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An LLC, also known as a limited liability company, is a type of business structure that legally separates your business assets from your personal finances. Think of an LLC as a wall between your business liability and your personal liability. It’s designed to help protect your personal assets from being negatively affected if someone sues your business.
Insurance is not always legally required just because you’ve registered your business as an LLC. But registered businesses in some professions can require business insurance for licensing, such as construction and contracting, real estate, beauty and personal care, and transportation and delivery services. In addition, some states require an LLC to carry business insurance coverage for things like protecting employees from injuries at work or driving for business.
Businesses who could benefit most from LLC insurance include those that:
Insurance for an LLC business may include different types of insurance policies that can provide protection from many different risks, including liability, accidents, theft, vandalism, property damage, medical bills and some legal actions. Here are a few examples:
The cost of business insurance for an LLC varies, depending on the types of risks your business faces, including
Start a free, no obligation business insurance quote with ERGO Next. In about 10 minutes you’ll see the exact price you’ll pay, 100% online.
Just one type of business insurance won’t protect your LLC from everything. It’s best to combine several types of business insurance coverage to help cover more risk.
General liability insurance for LLCs can help to provide financial protection if an accident occurs at your business, such as an injury to a non-employee, or you or your employee accidentally damage someone else’s property.
Commercial property insurance could help protect your business equipment on business premises, such as laptops, furniture and fixtures; inventory and products in your stock room; and the building that you work in, including its HVAC systems, a burst water pipe and more. If your shop, storefront, home office, office or warehouse is damaged by a covered event like theft, vandalism or fire, property insurance could help with replacement costs or repairs.
Business interruption coverage, a part of commercial property insurance, can also help with the loss of business income and some extra expenses if you have to close your business temporarily for repairs.
A Business Owner’s Policy (BOP insurance) combines the coverage of two important types of business insurance into a single, often more cost-efficient policy — general liability insurance and commercial property insurance.
Workers’ comp insurance, required coverage for any business with employees in most states, can help cover medical care and lost wages if an employee suffers a workplace injury or illness. Business owner’s coverage for yourself (an optional add-on to the policy) can help cover you if you’re injured as well.
Professional liability insurance can help protect your business if a client or customer files a lawsuit against you if they feel your professional error or inaction caused them financial loss.
In some professions, professional liability coverage is called errors and omissions insurance (E&O insurance) or professional indemnity insurance. This coverage is most sought after (and in some cases, required for licensing) for business consultants, real estate professionals, insurance agents, accountants and financial professionals, IT consultants, engineers and architects.
Cyber insurance coverage can help cover financial losses from cyber attacks, phishing schemes, data breaches or ransomware. You can add it to your general liability insurance at ERGO NEXT.
Commercial auto insurance can help with coverage if you or your employees are involved in an accident while driving for work. It can help protect your business from the unexpected cost of vehicle repair, replacement or rental.
LLCs have a lot of options to help lower the cost of their small business insurance, including:
Legally, no. But in practice, yes. A single member LLC is not required to have insurance if they’re the sole owner and the only worker, if there aren’t any state or license insurance requirements, and if they don’t have any business vehicles, contracts or leases that require proof of insurance.
However, even if you work alone from a home office, if you operate as a single member LLC and run your own business there’s a high likelihood that your business will run into one of these scenarios. If you have small business insurance in place you’ll be ready to bid, sign, compete and get to work.
ERGO NEXT makes it fast, easy and affordable to protect your small business — and you can do it all online.
We’ll ask a few questions about your business and give you a quote. You can select your coverage options and buy your policy in about 10 minutes. Your certificate of insurance will be available immediately, and you can access your policy 24/7 via web or mobile app.
If you have questions, our licensed, U.S.-based insurance professionals are available to help.
Karen Solomon is a senior content editor at NEXT. She has spent decades helping small business owners and startups as a writer, editor and content strategist. She previously served as the small business editor for the San Francisco Bay Guardian.
Her experience includes producing content for leading brands in tech, finance, education and food — including Bank of America, Stanford University, Salesforce, Adobe and Atlassian. Her columns and feature stories have also appeared in Wired, CNET, the Industry Standard, Entrepreneur 2.0, the San Francisco Chronicle and San Francisco Magazine.
