If you run a small business, you’ve got a million things on your plate that you need to worry about, and getting sued shouldn’t be one of them. Even if you run a low-risk operation, all it takes is one liability suit to tip your cash cow — if you don’t have commercial insurance.

The most important step any small business owner can take to mitigate risk begins with selecting the right commercial insurance policy. Since no two companies are alike, there are a variety of different commercial insurance plans and coverage options you can choose between.

Because there are so many variations to a commercial insurance plan, we’ll cover the must-haves for any small business.

What is commercial insurance?

At its core, a commercial insurance policy is meant to help a business mitigate the financial impact of various risks that might impact its future. Commercial insurance has some key differences from personal insurance:

  • It typically covers multiple employees, rather than just the policyholder; it considers the actions of anyone acting on behalf of “the business.”
  • It generally has much higher coverage limits because the business’s property, equipment, and assets are all at stake.
  • There is more flexibility since plans will need to be tailored to a business’s specific needs, risks, and industry.

So what does “commercially insured” mean? It means that your business has some level of insurance protection. It doesn’t necessarily mean you have the right type of protection or the right level of protection, but we can help you with that.

There are several types of commercial insurance worth considering to ensure that your business is protected. Depending on your state, some types of commercial insurance are legally required, while others are just highly recommended.

General liability insurance

No matter the size of your business, no matter the industry, you’re going to need a general liability insurance policy. This protects you from having to cover damages that result from your business operations and interacting with clients and the public at large — in other words, people not acting on behalf of your business, referred to as “third parties.” It acts as a buffer from the cost of liability claims made by third parties because of:

So, if a customer gets hurt on equipment that’s been left out, a passerby slips on your unshoveled sidewalk, or an employee accidentally damages a client’s property, your general liability policy could kick in. It helps pay for the cost of a third party’s medical expenses or repairing or replacing their property.

Professional liability insurance

Professional liability insurance protects professionals and experts from claims that they failed to provide their services appropriately, causing financial loss or reputational damage to their clients. Also known as errors and omissions insurance (E&O), this allows businesses to be confident, give advice, and do their job without fear of retribution, should their suggestions not pan out and their clients suffer financial loss as a result.

Some examples of professions that need E&O included in their commercial insurance policy include:

Typically, a commercial liability policy will:

  • Provide the legal defense of a claim
  • Damages or settlement payments arising from negligence claims, regardless of your fault in the matter

Workers’ compensation

Workers’ comp is one of the few types of insurance that is legally required in almost every state. While each state has its own rules, generally speaking, many states will require you to have it if you have three or more employees.

Workers’ comp covers the expenses resulting from an employee’s bodily injury or illness they sustained at work or on the job, such as:

  • Medical expenses
  • Treatment or surgeries
  • Compensation for lost wages
  • Rehabilitation
  • Permanent disability
  • Provides benefits to dependents in the case of a job-related death

On top of that, a workers’ compensation policy would provide the legal defense, should the matter require arbitration in the courts.

Commercial auto insurance policy

If a vehicle is registered to your business or owned by your company, you’re most likely required to purchase a commercial auto insurance policy, especially if you use the vehicle to commute to work, transport clients, employees, or equipment.

Commercial auto insurance is essential if either you or your employees use your vehicle for work purposes since your personal auto policy likely excludes coverage in the case of the vehicle being used commercially. So, if you want to use your car for the day-to-day tasks of the job, you’ll need to buy a hired and non-owned auto insurance policy for collision coverage.

Should an accident occur while you or your employee is driving the vehicle, commercial auto insurance would cover damages to the third party, including:

  • Bodily Injury
  • Medical Bills
  • Property Damage
  • Vehicle Theft or Damages

Although rates vary, almost every state has typical policy minimums such as:1

  • $25,000 for injury or death of one person
  • $50,000 for injury or death of two or more people
  • $20,000 for property damage

Cyber liability insurance

There is a cyber-attack every 39 seconds.2 It’s not just big businesses being hacked. If a cybercriminal intrudes upon your business, they could cause chaos resulting in data breach, cessation of business operations, loss of trust by clients, and a host of other damages.

A cyber liability insurance policy protects you from the likely event of cybercrime and would help cover a variety of damages, including:

  • Settlements
  • Damages
  • Legal fees
  • Ransom payments
  • Notifying impacted customers and then restoring their data
  • Data recovery
  • Repairing or replacing faulty computer systems
  • Enlisting a PR team
  • Lost revenue caused by interruption to the business

Protect yourself with Thimble

Are you in the market for general liability and professional liability insurance?

Thimble’s small business insurance is changing the way businesses get insurance coverage, so you can purchase a policy for when you need it and save when you don’t.

With Thimble, ​​you can choose from a policy by the job, month, or year. Just click “get a quote” or download the Thimble mobile app, answer a quick set of questions online or on the phone, receive your quote, and purchase — all within a few minutes.


  1. Commonwealth of Virginia. Commercial Insurance User’s Guide.
  2. Security Magazine. Hackers attack every 39 seconds.