Last updated: November 29th, 2022
Reviewed by
Paige Geisler
Licensed Insurance Agent
This category includes errors and omissions coverage, general liability protection, and business travel insurance, among other policy types. Anyone who owns a limited liability company (LLC) should consider purchasing business insurance to protect their assets. The following outlines how the owner of an LLC should go about evaluating the value of business insurance.
Table of Contents
LLC insurance refers to the many types of business insurance available to LLCs. Although it is possible to structure a business as a sole proprietorship, doing so leaves the owner’s personal assets at risk. The LLC structure separates personal assets from business assets, protecting members in the event of a lawsuit or business bankruptcy.
This type of insurance adds an extra layer of protection by covering a wide variety of losses, such as medical expenses associated with work-related injuries or income lost due to a natural disaster.
Yes. Every LLC should have comprehensive insurance coverage. In fact, some states require companies operating within their borders to carry some type of business insurance. For example, most states have laws requiring certain businesses to buy workers’ compensation insurance, which covers an employee’s medical expenses in the event of a work-related injury or illness.
Even if your state does not require insurance, it is a good idea to have a policy that covers several types of losses. Getting the right insurance in place helps manage risk, leaving you in a much stronger position.
What business insurance covers depends on what type of business insurance you purchase. The table below lists some of the most common types of business coverage and explains what each one covers.
Although business insurance provides comprehensive protection against covered losses, it does not cover everything. Generally, business insurance does not cover illegal acts or intentional damage to company property. There may also be some exclusions depending on the type of policy you buy.
For example, general liability insurance only covers property damage, personal injury, and bodily injury for other people. If a customer sustains an injury on the premises, your general liability policy will cover their medical expenses. However, if one of your employees is injured, general liability insurance will not cover it. In this instance, you will need to submit a claim under your workers’ compensation policy.
On average, business insurance costs between $14 and $124 per month. Several factors influence the cost of business insurance, such as what type of insurance you buy and how many employees you have. The table below shows the average monthly cost of five common types of business insurance for LLCs.
* This is the median monthly cost for commercial property insurance.
Business insurance protects you against many types of losses, including employee injuries, property damage, cyber threats, and business interruptions. The best way to guard against significant losses is to do a thorough risk assessment and build a policy that covers the risks inherent in your business.
Brian is the founder and CEO of Insurist and carries Life, Health, and Property & Casualty licenses in all 50 U.S. states. Since 2013, Brian has been a member of Million Dollar Round Table, a designation for the top 1% of financial advisors worldwide. Brian has been featured in Yahoo! Finance, Money.com, Entrepreneur.com, Life Happens, Forbes, MSN, and Good Financial Cents. Brian’s goal is to show customers the best products, the quickest answers to their questions, and provide expert advice.
Paige is an assistant agent for State Farm and is licensed to sell property and casualty, health, and life insurance in Virginia. She handles all different types of insurance and financial services and is currently working on a securities and bonds license. Paige has a degree from Radford University in English and is a certified notary.
