On January 24th, 1848 James W. Marshall made the discovery of a lifetime at Sutter’s Mill in Northern California. It was the beginning of a gold rush that brought hundreds of thousands of fortune-seekers to the Golden State from all over the globe. The promise of riches just below the surface still exists today. If you’re looking to start a business, there are fewer better places to do so than in California.

If California was its own country, it would have the 5th largest economy in the world. It’s not just big business striking it rich, either. Entrepreneurs will find that opportunities abound in a state that’s home to over 4 million small businesses. And while the businesses in California are as diverse as its people, there’s one thing all small businesses need to thrive: insurance.

What business insurance am I required to get in California?

California workers’ compensation insurance

Workers’ comp insurance isn’t required in every state, but in California you must legally have a workers’ comp policy if your business has one or more employees. Under the California Labor Code, having illegally uninsured employees is a misdemeanor offense—punishable by up to a year imprisonment or a $10,000 fine.

Workers’ compensation insurance exists to safeguard employees from financial impact related to injuries or illnesses sustained on the job. As a business owner, it also protects you from liability related to employee injuries. Workers’ compensation covers expenses and lost wages caused by the following:

Work-related accidents and injuries, such as repetitive stress injury, and resulting disability Illnesses caused by or related to employment

California auto liability insurance

If you drive a car, truck or van as part of your business operation, you’re required to have auto liability insurance or qualify as a self-insurer. Auto liability insurance can protect you and your business from the following types of third-party claims resulting from auto accidents involving your vehicle:

Bodily injury – If you get into an accident and the driver or a passenger of the other vehicle is injured, your auto bodily injury liability insurance covers the costs arising out of bodily injury, including medical expenses and death benefits.

Property damage – In the above scenario, it’s extremely likely the other car sustained some damage as well. Your auto policy’s Property Damage Liability coverage insures the cost to repair or replace the other party’s vehicle.

Also, depending on the use of your vehicle, the kind of vehicle or if your vehicle is registered or titled under your business name, you may need a commercial auto insurance policy to secure the appropriate coverage and vehicle registration, and avoid penalties.

What other types of business insurance are recommended for California?

California general liability insurance

General liability insurance (also known as CGL—for commercial general liability) is one of the most essential and effective ways to safeguard your business. It protects your business from the financial consequences resulting from liability related to third-party non-employee bodily injury or third party property damage that arises from your business operations. It also provides coverage for personal and advertising injury. Without general liability insurance coverage, you could be in financial trouble in the event of an unfortunate accident involving a customer or other third party.

California professional liability insurance

If you provide professional services and your advice is alleged to have led to one of your clients suffering a financial loss, professional liability insurance can help. When a former customer or client claims—rightly or wrongly—that a mistake in your work led them to suffer a financial loss, professional liability insurance provides you with investigation and defense of the claim as well as making payments of any settlements or judgments.

Inland marine insurance

Inland marine insurance is designed to protect that vital equipment you use to make your business run smoothly. It protects your business by covering costs associated with accidentally damaged, lost or stolen equipment that is on the go with you. Whether you have an expensive tool collection, pricey construction materials, or other equipment you transport to a job site, having inland marine insurance is a no-brainer. At Thimble, we offer inland marine insurance, or Business Equipment Protection as we call it, with coverage for up to $5,000 worth of business property and equipment.

Commercial property insurance

Commercial property insurance protects your company’s building and the contents inside it from all kinds of risks of physical loss or damage, including theft, vandalism, fires and natural disasters such as floods, storms or earthquakes. Commercial property insurance is often included as part of a Business Owners’ Insurance Policy, or BOP.

Professions covered in California

No matter what your business is, if you’re in California, you’ll benefit from being insured. If a non-employee slips and falls due to a workplace hazard or you accidentally damage a client’s property while working in their home, the last thing you need is to pay out-of-pocket for damages. In California, Thimble’s business insurance covers:

Cost of business insurance in California

At Thimble, the cost of your small business insurance depends on a variety of factors. The amount of risk involved in your business, the industry you’re in, and the amount of business you do all play a part in determining your policy premium.

Another important factor is your location. Large metro areas like Los Angeles, San Diego and San Francisco might have higher premiums on average than more rural places in Northern California or the Central Valley.

Finally, Thimble will look at factors such as your crew size, coverage amount and the number of years you’ve been in business before determining how much your premium will be.

Median California insurance costs

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Top cities in California

  • Fresno
  • Los Angeles
  • Oakland
  • Riverside
  • Sacramento
  • San Diego
  • San Francisco
  • San Jose
  • Santa Barbara
  • Santa Cruz

Bottom line: California business insurance

Setting up shop in California means being a part of an economy that keeps the pioneering spirit alive through ingenuity, hard work and outstanding service. As you continue your journey as an entrepreneur in the Golden State, consider how you can protect your investment and mitigate costly setbacks by getting the small business insurance coverage you need.

Even if you’re just starting up, you can find California business insurance coverage that’s right for you. Through Thimble, you can get a quote for your general liability insurance, professional liability insurance or Business Equipment Protection in less than a minute and if you decide to buy, you’ll be able to access your policy and Certificates of Insurance (COIs) in your inbox instantly.