California business insurance

California’s booming entrepreneurial spirit is no accident – it’s a state brimming with opportunity. With over 4.2 million small businesses in California, the dream of success is alive and well.

But even the most exciting ventures face risks. California business insurance provides protection against unexpected accidents that could result in costly lawsuits. Not sure what insurance your California business needs? We break down the two types of insurance that are required for a business in California and explore valuable add-ons to keep your venture thriving.

What type of business insurance is required in California?

California workers’ compensation insurance

Workers’ comp insurance isn’t required in every state, but in the State of 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 imprisonment or fines.

Workers’ compensation insurance safeguards employees from financial impact related to injuries or illnesses sustained on the job. As a business owner, it also protects your small business from liability related to employee injuries. Workers’ compensation provides coverage for 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 must 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 are found to be at-fault and someone is injured, the bodily injury coverage in your auto liability insurance policy will help protect you against financial loss resulting from claims arising out of bodily injury, including medical expenses and death benefits.

Property damage – In the above scenario, the other car likely sustained some damage as well. Your auto liability insurance policy’s property damage coverage will pay costs required to repair or replace the other party’s vehicle. The maximum amount that will be paid in the event of a claim is based on the limits you purchase for your auto liability policy.

Also, depending on how you use your vehicle, the kind of vehicle you have, or if your vehicle is registered or titled under your business name, you may need to purchase a Commercial Auto Insurance Policy to secure the appropriate coverage and vehicle registration to avoid penalties.

What other types of business insurance are recommended for California?

While there are many types of coverages for businesses in California, we have highlighted several below that most business should consider when going into business:

California general liability insurance

General liability insurance (also known as commercial general liability – CGL – or business liability insurance) is one of the most essential and effective ways to safeguard your business. It protects your business from the financial consequences resulting from third-party, non-employee bodily injury or third-party property damage claims arising from your business operations. General liability insurance also provides coverage for claims alleging a personal and advertising injury has occurred.

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. General liability insurance can help cover the costs of legal fees, medical expenses, and damages that may arise from a claim filed against your business. It can also help protect your business’s reputation and credibility.

Here are some common incidents that general liability insurance typically provides coverage regarding:

• Slip-and-fall accidents.
• Property damage caused by your business operations.
• Advertising injuries such as defamation or copyright infringement.

General liability insurance can give you peace of mind knowing that your business is protected in case of any unexpected incidents. Some landlords, clients, or vendors even require it before doing business with them.

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 (also known as errors and omissions coverage) can help.

Professional liability insurance helps protect your business from claims alleging you made a mistake or were negligent in the professional services you provided, and such mistake or negligence resulted in a financial loss for your client.

For example, if a former customer or client claims that you made a mistake that cost them money and you have professional liability insurance coverage, your professional liability coverage will provide investigation of the claim, defend you in court if necessary, and pay any settlements or judgments awarded.

Inland marine insurance

Inland marine insurance, or business equipment protection as we call it, is designed to protect vital equipment that you use to make your business run smoothly. It provides coverage for your business equipment when such equipment is accidentally damaged, lost, or stolen, even if not on your premises. 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.

Commercial property insurance

Commercial property insurance provides protection for loss to your company’s building, if you own it, and the contents inside it from the risks of accidental physical loss or damage, including theft, vandalism and fire.

Commercial property insurance coverage can also be found in a Business Owners’ Insurance policy, also called a BOP. Many businesses elect to purchase a BOP because it bundles commercial property and general liability coverages into a single coverage form.

Types of Professions covered in California through Thimble

No matter if you’re a small business owner, or if you run an enterprise business, 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. Here are a few examples of professions that Thimble offers business insurance coverage for in California:

Types of professions covered in California through Thimble

• Photographers
• Handymen
• Contractors
• DJs
• Event & Party Planners
• Cleaners and Janitors
• Landscaping
• Janitorial Services
• Vehicle Washing
• And more

Cost of business insurance in California

The cost of your California small business insurance depends on various factors including the level of risk involved in your business, industry type, business income, and the volume of business you do.

Location is another important factor. 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, factors such as your crew size, coverage amount, and the number of years you’ve been in business will be considered before determining how much your policy’s premium will be.

Median California state insurance costs

*Costs are subject to change

Top cities for businesses in California

If you’re deciding where in California to set up shop or plan to take your business mobile, here’s some inspo. The following are some of the top cities for businesses in California:

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

Minimize risk, maximize success: small business insurance in California

If you’re just getting started, help your small business by getting California business insurance coverage that’s right for you. Through Thimble, you can get a quote for the coverages offered by Thimble’s partners in minutes. Once purchased, access your policy and get a Certificate of Insurance (COI) (or as many COIs as you need) in your inbox, almost instantly.

Establishing a business in California means joining an economy that embodies innovation, dedication, and exceptional customer service. Small businesses in California can safeguard their investments and reduce potential financial setbacks by obtaining small business insurance. Get started today with a small business insurance quote.

FAQs

How do I get a business insurance quote from Thimble?

You can get a business insurance quote online from Thimble by simply clicking this link or you can also get a quote in the Thimble app.

What is the California state law for business insurance requirements?

In California, if you have employees and vehicles used for your business, state law requires you to have workers’ compensation insurance & auto liability insurance, respectively. Although not required by law, you should also look into other coverages based on your business needs.

Thimble offers the following coverages through its partners:

• Workers’ Compensation Insurance
• Commercial General Liability Insurance
• Professional Liability Insurance
• Business Owners Insurance
• Commercial Property Insurance
• Cyber Insurance
• Business Equipment Insurance (Inland Marine)
• The California Department of Insurance also has a list of resources regarding additional types of insurance.