A small company that usually has no more than five workers.


What is a microbusiness?

A microbusiness is a small business that typically operates with fewer than five employees. These businesses are often owner-operated and have limited resources and capital.

Microbusinesses can be found in various sectors, including retail, construction, services, technology and creative industries. While the size of a microbusiness may vary, they are generally characterized by their small team, low investment requirements and localized operations.

What are the advantages of starting a microbusiness?

Starting a microbusiness offers several advantages, making it an attractive option for aspiring entrepreneurs. Some of the benefits include:

  • Low startup costs: Microbusinesses require minimal investment, allowing entrepreneurs to start their ventures with limited resources.
  • Flexibility: As the owner of a microbusiness, you have the freedom to set your own schedule and make decisions without the need for extensive approval processes.
  • Close customer relationships: Microbusinesses often serve a local market, enabling entrepreneurs to build personal relationships with their customers and provide tailored services.
  • Quick decision-making: With fewer layers of hierarchy, microbusinesses can make decisions swiftly, adapting to market changes and customer demands more efficiently.

How can entrepreneurs finance a microbusiness?

Financing a microbusiness can be a challenge, as traditional lenders may be hesitant to provide loans to small enterprises. However, there are several alternative options available:

  • Bootstrapping: Many microbusiness owners rely on personal savings or funds from friends and family to get started.
  • Crowdfunding: Platforms like Kickstarter and Indiegogo allow entrepreneurs to raise funds by pitching their business ideas to a large number of potential investors.
  • Microloans: Microfinance institutions offer small loans specifically designed for microbusinesses, providing entrepreneurs with the necessary capital to kickstart their ventures. The Small Business Administration (SBA) also has resources for microloans.

Learn more about funding a small business.

Insurance needs for microbusinesses

When starting a microbusiness, it is essential to consider the insurance needs to protect your venture from potential risks. While the specific insurance requirements may vary depending on your industry and location, here are some common types of insurance coverage microbusinesses may need:

  • General Liability insurance: This coverage helps protect your microbusiness from third-party claims related to injuries, property damage or advertising injury. It helps provide financial protection in case of lawsuits or claims against your business.
  • Professional Liability insurance: If your microbusiness provides professional services or advice, professional liability insurance, also known as errors and omissions (E&O) insurance, can help protect you from claims of negligence and professional mistakes that may result in costing your clients money.
  • Commercial Property insurance: Property insurance helps cover damage or loss to your business property, including building structures, equipment, inventory or supplies, due to covered events such as fire, theft or vandalism.
  • Workers’ Compensation insurance: If you have employees, workers’ compensation insurance is typically required by law. It helps provide coverage for medical expenses and lost wages in case of work-related injuries or illnesses.

How NEXT simplifies insurance

Microbusiness owners have a lot on their plates and little time to worry about business insurance. That’s why NEXT gives them 24/7 access to manage their account, update their coverage and download a free proof of insurance in minutes.

You can start a quote, customize your options and access your certificate of insurance online — in about 10 minutes.

Start your instant quote today.

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Business insurance is divided into different policies. We offer seven types so it's easy to design the coverage that fits your business.
General Liability insurance
General Liability
Protect yourself from accidents that cause physical injury or damaged property.
Professional Liability or Error and Omissions Insurance
Professional Liability/E&O
Shield yourself from lawsuits that claim your work errors caused financial losses.
Workers' Compensation Insurance
Workers’ Compensation
Cover medical bills and lost wages if your employees have an accident at work.
Commercial Auto Insurance
Commercial Auto
Stay on the road with coverage for dents, tows and damage to someone else’s vehicle.
Tools & Equipment Insurance
Tools & Equipment
Upgrade your general liability coverage to protect any gear that’s stolen, damaged or lost.
Commercial Property Insurance
Commercial Property
Keep your building, inventory and equipment protected from fire or water damage.
Business Owner’s Policy Insurance
Business Owner’s Policy
Combine general liability and commercial property into one policy to protect your business.
* To the extent permitted by law, applicants are individually underwritten, not all applicants may qualify. Individual rates and savings vary and are subject to change. Discounts and savings are available where state laws and regulations allow, and may vary by state. Certain discounts apply to specific coverages only.
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Issuance of coverage is subject to underwriting. Not available in all states. Please see the policy for full terms, conditions and exclusions. Coverage examples are for illustrative purposes only. Your policy documents govern, terms and exclusions apply. Coverage is dependent on actual facts and circumstances giving rise to a claim. Next Insurance, Inc. and/or its affiliates is an insurance agency licensed to sell certain insurance products and may receive compensation from insurance companies for such sales. Policy obligations are the sole responsibility of the issuing insurance company. Refer to Legal Notices section for additional information.

Any starting prices or premiums represented before an actual customer quote are not guaranteed and are representations of existing premiums of active policies as of December 6, 2023. To the extent permitted by law, applicants are individually underwritten, not all applicants may qualify. Individual rates and savings vary and are subject to change. Discounts and savings are available where state laws and regulations allow, and may vary by state. Certain discounts apply to specific coverages only.