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The cost of starting your own business ranges from just a few hundred dollars to thousands of dollars, depending on the nature and size of the business.

After spending so much to get your business off the ground, the last thing you want to see is the business crashing down due to an unexpected setback — like natural disasters, legal disputes or cyberattacks.

Such incidents can be emotionally and financially devastating. They can disrupt operations, deplete resources and in the worst-case scenario, force your business to close down permanently.

Here’s the good news: There are several ways to protect your business investment. In this guide, we’ll introduce you to three invaluable methods — business (commercial) insurance, contracts and site security — that can help safeguard your business.

What is commercial insurance?

Business insurance definition.

Commercial insurance, also called business insurance, protects you from financial losses stemming from unexpected events that can occur during business operations.

There are several types of business insurance, and they provide coverage for various situations.

However, the most important types of insurance cover legal liability, property damage and employee-related issues.

Why you need business insurance

Having a business insurance policy is essential for several reasons. Let’s look at some of the key benefits.

Business continuity

Business insurance ensures business continuity even after significant financial setbacks. This is especially vital for small to medium-sized companies, which are at greater risk than larger corporations because they can’t absorb financial blows as easily.

Certain forms of commercial insurance are mandatory in some jurisdictions. For example, federal laws mandate that businesses that hire employees have workers’ compensation insurance and unemployment insurance.

Additional business insurance coverage requirements vary from state to state. Failure to comply with mandatory legal requirements can result in monetary penalties, legal battles, reputational damage or even a business shutdown.

Peace of mind

Business insurance allows you to operate confidently, knowing you’re protected against unforeseen incidents that could financially wreck your business. Instead of worrying about unexpected events, you can focus on more important business matters, like customer acquisition and retention.


Business insurance communicates trustworthiness. Customers see a company that’s prepared for the unexpected and is proactive about risk management. This perception can strengthen customer relationships and enhance your brand’s reputation, giving you a competitive edge.

Employee protection

Business insurance plays an important role in improving employee welfare. Policies like workers’ compensation provide a safety net for employees and can help them feel secure in their jobs. This sense of security boosts morale, fosters loyalty and improves overall job satisfaction, all of which contribute to a positive and more productive work environment.

The main types of business insurance

Business insurance comes in many forms. Here are the main coverage options.

The main types of business insurance.

General liability insurance

General liability insurance is the most popular type of business insurance. It covers financial losses resulting from a wide spectrum of issues that can occur during everyday business operations. These include personal injury, property damage, bodily injury, vandalism and the costs of defending lawsuits.

Product liability insurance

The very act of selling a product makes your business potentially liable for damage resulting from the use of that item. Product liability coverage protects you from legal actions (e.g., lawsuits) resulting from misuse or accidents associated with your products.

Professional liability insurance

Professional liability insurance is commonly called errors and omissions insurance. It safeguards your business against financial losses resulting from lawsuits for errors, malpractice, negligence and omissions.

Home-based business insurance

This policy targets entrepreneurs who operate home-based businesses. The policy supplements your homeowner’s insurance policy by covering business equipment and inventory, as well as liability for third-party injuries.

Business property insurance

Business or commercial property insurance protects your physical assets or property against loss or damage due to various incidents like fire, theft, vandalism and natural disasters. It covers things like buildings, tools and equipment.

Business interruption insurance

Sometimes called business income insurance, business interruption insurance targets businesses that operate at a physical location. It compensates them for income lost during uncontrollable events that cause significant disruption in everyday business operations.

Workers’ compensation insurance

Workers’ compensation insurance protects you from lawsuits related to job-related injuries, illnesses or deaths of employees.

For example, it might cover lost wages or medical expenses for employees who incur injuries in the workplace. Workers’ comp insurance also pays death benefits to the dependents or spouses of employees who pass away on the job.

Commercial auto insurance

Auto policies are useful for businesses that use vehicles in their day-to-day operations. This insurance option covers the cost of any accidents that involve you or your staff. Such expenses include legal fees, repairs and medical expenses for any injuries sustained.

Cyber liability insurance

Cyber liability insurance protects against the impacts of cyberattacks and data breaches. For example, it can help cover the costs related to recovery as well as any legal consequences if customer data is compromised.

Business owner’s policy (BOP)

Business owner’s policy combines multiple coverages into one single package. It’s designed to provide a broad range of coverage while eliminating the complexity of managing multiple policies separately. This type of policy helps you save money.

How to choose the right insurance for your business

Here is a useful guide for picking the right type of coverage for your business.

Examine your risks

You don’t need to get every type of business insurance — only that which protects you from the unique risks associated with your business. Consider specific areas where your business needs robust protective measures.

Factors such as your industry, geographical location and the nature of your business can help you determine the right insurance product to choose.

Compare different options

There’s no shortage of commercial insurance companies. So, don’t settle on the first insurance provider or policy you come across.

Instead, compare the offerings of multiple providers and ask for an insurance quote. Evaluate not just the premiums but also the comprehensiveness of the coverage, the terms and conditions (including exclusions) and the efficiency of the claims process.

By thoroughly comparing these aspects, you’ll be better positioned to make an informed decision that aligns with both your needs and budget.

Work with a reputable insurance agent

For maximum protection, choose a licensed agent who specializes in your industry. These professionals can help you determine which areas of your business are at risk and the right coverage to protect you.

Look for insurance agents who have a proven track record of accomplishment and are highly recommended by other businesses in your field.

Average cost of small business insurance

Average cost of small business insurance.

According to popular insurer Insureon, the average cost of commercial insurance for small businesses is $14-$147 per month, depending on the type of insurance you choose. A general liability policy, the most common type of insurance, costs small business owners about $42 per month or $500 per year.

Additional methods for protecting your business investment

While insurance offers legal financial protection for your business investment, it works retroactively. This means you’re only covered after something happens.

To fully protect your business, complement commercial insurance with preemptive protective measures, like contracts and site security. Both work hand-in-hand with your commercial insurance to create a comprehensive shield for your business, ensuring you’re covered from all angles.


A contract is a legally binding agreement between two or more parties. It outlines specific obligations, terms and conditions to be met. It also clarifies expectations, deliverables, payment terms and repercussions if any party fails to uphold their end of the agreement.

While it’s not a guarantee that everything will go as planned, a well-written business contract offers you legal protection if others breach the terms of the agreement.

Site security

Whether you’re running a physical or online business, site security can protect it from malicious actors and unauthorized access.

For brick-and-mortar businesses, site security encompasses surveillance cameras, alarm systems, access control mechanisms and security personnel. These protective measures deter theft, vandalism and unauthorized access, safeguarding both assets and personnel.

For online businesses, the threat landscape is different but no less serious. An effective website security protocol is thus equally critical. Here, security measures include firewalls, encryption, malware scanning and regular updates and backups.

Final thoughts: How to protect your company’s assets with business insurance

Whether you’re running a traditional or online business, unforeseen events can strike at any time, threatening the existence of your business.

However, there are multiple ways to protect your business. Through comprehensive business insurance, well-structured contracts and robust site security, you can protect your business from several risks.

If you’re an online entrepreneur, choosing a reliable web host is the first step in protecting your business investment. Bluehost is trusted by millions of entrepreneurs and companies across the globe and offers a variety of top-tier hosting plans tailored to your unique business needs.

Explore Bluehost’s hosting plans today to find the right fit for your business.

  • Devin Sears

    Devin is a Senior Event Marketing Manager for the Bluehost brand. He is our brand steward for all things Bluehost and WordPress. You'll always see him supporting Bluehost at WordCamps around the world!

    Brigham Young University
    Previous Experience
    Social Media, Customer Experience, Field Marketing, Sponsorships, Event Coordinator
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