Pencil, calculator, and magnifying glass in white toolbox on red background

What is Business Liability Insurance? Do I Need It?

By Steven Lynch on June 3, 2020

This article is written by our friends at Attune, the insurance company dedicated to making small businesses thrive.

A lot of unexpected things can happen when running your business. The right commercial insurance will help you and your business in the long run, especially as your business grows. Business insurance helps you cover costs associated with property damage and liability claims, and will prevent you from paying high out-of-pocket costs for damages.

Business liability insurance will protect you financially in the event of a potentially devastating event.

What are the basic insurance needs for small businesses?

Every business is different, but they’re all required to have insurance in one way or another. There are lots of insurance options out there that allow you to build customized insurance solutions for your needs. To get started, think about your business, how it operates, the number of employees you have, the amount of equipment, and its physical property.

Different types of insurance coverage for small businesses

There are four main types of insurance you should know about:

Businessowners’ Policy

Most businesses are required to have a Businessowners’ Policy (BOP), which is specifically designed for small businesses. BOPs include Property and General Liability Coverages and offer broad coverage for a low cost. With a BOP, you can customize specific coverage based on what your business needs.

General Liability Coverage helps protect you and your business in the event one of your customers is injured on your premises. Property Coverage can cover financial costs due to an outlined and covered loss in your policy. This can include fire, theft, and smoke damage. Get a free customized BOP quote in minutes with Attune, our insurance partner.

Commercial Excess Liability

For businesses that require a bit more protection, you can get a Commercial Excess Liability Policy that provides additional coverage that sits above your BOP. This policy is an added layer of protection from your primary insurance, but it’s important to note that it does not provide additional, separate coverage.

Workers’ Compensation

If you have employees at your business, you’ll need a Workers’ Compensation Policy. Workers’ Compensation provides wage replacement, rehabilitation costs, and medical benefits to employees who become hurt or sick due to their job. This insurance protects both you and your employees.

Employee Dishonesty

This coverage is sometimes referred to as fidelity bond, crime coverage, or crime fidelity. It protects you in the event of fraudulent acts conducted by an employee. These types of acts can include forgery, credit card fraud, alteration, unauthorized fund transfers, computer fraud, money order fraud, and counterfeit fraud.

What happens if I don’t have insurance?

When you don’t have business insurance, your business is liable to pay all damages and legal fees out of pocket. If anything out of the ordinary happens to your business—including getting sued—it could financially sink your business if you don’t have business insurance.

Note: This post is for informational purposes only. Connect with an insurance professional before making any coverage decisions.


This post is to be used for informational purposes only and does not constitute legal, business, or tax advice. Each person should consult his or her own attorney, business advisor, or tax advisor with respect to matters referenced in this post. Bench assumes no liability for actions taken in reliance upon the information contained herein.

Friends don’t let friends do their own bookkeeping. Share this article.

Want a free month of bookkeeping?

Sign up for a trial of Bench. We’ll do one month of your bookkeeping and prepare a set of financial statements for you to keep. No pressure, no credit card required.

Decorative patterns