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Best Health Insurance Companies for Small Businesses for June 2024

Blue Cross Blue Shield stands out as the best health insurance company for small businesses because of its range of coverage options. The company offers a nationwide preferred provider organization (PPO) network and extra benefits for employees, including an extensive discount program. 

Depending on your state, you may have a few options for finding health coverage for your employees, including through the Small Business Health Insurance Options Program (SHOP)—a government marketplace for small business health plans—and by purchasing a traditional group health plan from a broker or directly from an insurer. 

To choose the best health insurance companies for small businesses, we evaluated major health insurance carriers based on financial strength, customer satisfaction, coverage options, telehealth and wellness benefits, digital tools, and more. These are our top picks. 

• Best Overall: Blue Cross Blue Shield
• Best for Customer Satisfaction: Kaiser Permanente
• Best for Part-Time and Seasonal Workers: UnitedHealthcare
• Best for Self-Funded Plans: Aetna
• Our Top Picks

Blue Cross Blue Shield

Kaiser Permanente

UnitedHealthcare

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The Bottom Line

• Insurance Options
• Pros & Cons

Why You Should Trust Us

• Methodology

Guide to Health Insurance Companies for Small Businesses

Best overall : blue cross blue shield.

Blue Cross Blue Shield (BCBS) offers flexible options to small business owners, including the option to access the nation’s leading PPO network. In many states, BCBS employee plans come packed with extra benefits, and most plans include an extensive discount program.

Nationwide availability

Health and wellness discounts

Workplace wellness programs in many states

Poor J.D. Power ranking in some regions

Blue Cross Blue Shield, which is also our pick for the best health insurance company overall, offers employers many options. Among them are plans that include access to the BlueCard PPO network, which gives employees coverage when traveling nationwide. In some states, BCBS offers fully insured, level-funded, and self-funded plans. Blue Cross Blue Shield is a group of companies, so benefits and plans vary by region, but many member companies offer extra benefits. 

For example, the member company Anthem provides an employee assistance program at no extra cost to help members manage stressful events, from legal issues to the search for care. In many states, BCBS plans also come with 24/7 telehealth and access to mobile app plan management. Most members also get access to Blue365, an extensive discount program that also offers a $25 gym membership in some states. 

BCBS and Anthem companies had a combined average of 3.5 stars out of 5 stars from the National Committee for Quality Assurance (NCQA), an independent body that judges insurance plans on the quality of their providers, as well as customer satisfaction. But customer satisfaction ratings vary by region. Check the 2023 J.D. Power U.S. Commercial Member Health Plan Study to see how BCBS fared in your region. While rankings are poor in many regions, BCBS was top-ranked in Florida. 

BCBS companies also have an A or A- financial strength rating from AM Best . 

Best for Customer Satisfaction : Kaiser Permanente

Kaiser Permanente has top customer satisfaction ratings from the NCQA and J.D. Power, along with an award-winning app and a suite of virtual care options.

4.2-star average NCQA rating

Top-ranked by J.D. Power in most regions where available

Administers HRAs, HSAs, and FSAs

Robust support for chronic conditions

Only available in eight states and D.C.

Kaiser Permanente has better customer satisfaction ratings than any of the major health insurance providers we reviewed, with a 4.2-star average NCQA rating and top J.D. Power rankings in four regions. The company offers employers many options. While Kaiser is known for its health maintenance organization (HMO) plans , it also offers preferred provider organization (PPO) plans . Employees can pair some plans with a Kaiser-administered health reimbursement arrangement (HRA) , health savings account (HSA) , or flexible spending account (FSA) . Members can even submit HRA and FSA claims using their mobile phone cameras. 

Free wellness coaching is included at no cost. Members who are at risk for chronic conditions are automatically enrolled in a disease management program with comprehensive support and remote patient monitoring. And Kaiser offers several additional employee benefits, including dental, vision, acupuncture, and chiropractic. Kaiser is also our top pick for the best digital tools, with an award-winning app, 24/7 virtual care, mental health apps, and online physical therapy. 

The main drawback is that Kaiser Permanente isn’t available everywhere. The company only offers plans in eight states and the District of Columbia. Kaiser does offer a SHOP (Small Business Health Options Program) plan in Georgia and Virginia.

Best for Part-Time and Seasonal Workers : UnitedHealthcare

UnitedHealthcare offers small business plans nationwide, including a unique coverage solution for contractors, part-time workers, and seasonal employees.

Offers a unique program for non-benefit-eligible workers

Offers wellness resources and incentives

A+ financial strength rating from AM Best

J.D. Power ratings vary by region

UnitedHealthcare is our top pick for small businesses with several types of employees and contractors, including part-time and seasonal workers. Its FlexWork program offers coverage for non-benefit-eligible employees nationwide. The program provides group-premium-equivalent rates for three plan types designed for different types of workers, and you can add extra benefits like $0 telehealth, dental, and vision. 

UnitedHealthcare also offers members access to Self Care (a wellness app), fitness incentives, an online weight loss program, a smoking cessation program, and more. Plus, UnitedHealthcare offers a large provider network of more than 1.3 million healthcare providers. 

UnitedHealthcare also boasts an A+ financial strength rating from AM Best and a 3.5-star average NCQA rating. Though J.D. Power ratings vary by region, UnitedHealthcare was the top-scoring company in Texas and Virginia. The company also offers SHOP plans in Maryland, Massachusetts, New York, and D.C.

Best for Self-Funded Plans : Aetna

Aetna is one of the few health insurance companies to offer self-insured plans tailored to small businesses. We also like that it offers virtual primary care and a CVS allowance.

Offers self-funded plans for up to 25% upfront savings

Offers a variety of health expense funds

Optional robust behavioral health benefits

Members of some plans can access affordable care at MinuteClinic locations

Fully insured group plans in some states don’t include MinuteClinic benefits

Self-funded plans from Aetna offer up to 25% savings upfront, plus stop-loss insurance if your claims for a particular month go over your maximum claims amount. When you renew your plan, Aetna will refund 50% of any surplus funding to you. 

Members get access to CVS Health virtual primary care plus up to a $100 allowance for health and wellness products at CVS. The company also offers HRAs, HSAs, FSAs, and retirement reimbursement arrangements (RRAs) in most states. In addition, you have the option of adding behavioral health benefits that include virtual counseling, mental health tools, and an employee assistance program. Many plans offer MinuteClinic benefits as well, but fully insured plans in some states are excluded. 

Aetna has a 3.5-star average NCQA rating and a financial strength rating of A with AM Best. The company also came out on top in the East South Central, Northwest, and Southwest regions in the 2023 J.D. Power U.S. Commercial Health Plan Study, but ratings vary by region. Aetna offers SHOP plans in Maryland and D.C.

Blue Cross Blue Shield offers the most options for employers, with many plans providing access to the BlueCard PPO network and 24/7 telehealth, along with a variety of funding options in some states. If you’re looking for a self-funded plan, Aetna offers the best option tailored to small businesses in many states, as well as CVS benefits and optional robust behavioral health benefits. Kaiser Permanente takes the cake for customer satisfaction, with high third-party ratings and great digital tools, while UnitedHealthcare’s unique FlexWork program makes it our top pick for nontraditional employees.

Types of Health Insurance Companies for Small Businesses

You have a few options when choosing small business health insurance , according to Robert Slayton, owner of a Naperville, Illinois, employee benefits consulting firm called Robert Slayton & Associates.

Small Group Health Insurance

One option is to purchase a small group plan directly from a commercial health insurance company that serves small businesses or through a broker. “It gives the employer control over which plans to offer and [assurance] that people will remain covered while employed,” said Slayton. However, you may also need to offer COBRA or mini-COBRA plans. Mini-COBRA plans are required by some states for companies with fewer than 20 employees.

Self-Funded Plan

You may be able to save money by taking on the responsibility of paying out employee health claims yourself. This is known as a self-funded or self-insured plan, which typically relies on a commercial health insurer to administer the provider network and provide assistance with enrollment and claims processing. 

Health Reimbursement Arrangement (HRA) 

Another option is for the employer to offer a health reimbursement arrangement (HRA), which is an employer-funded group plan that pays employees back for qualified health expenses up to a certain dollar amount each year. Expenses may include premiums for an employer-sponsored plan, as well as copays and coinsurance. There are several types of HRAs, including a qualified small employer HRA (QSEHRA) for companies with fewer than 50 full-time employees. Another type is an individual coverage HRA (ICHRA), which lets employees use the funds to buy their own health insurance with pretax dollars. Funds can also be used for copays and deductibles. “[Employers] choose an amount to give each employee so that the employee can purchase coverage on their own,” said Slayton. “Employees who claim this reimbursement must have an underlying individual plan or Medicare.” 

The Small Business Health Insurance Options Program allows you to compare small business plans offered on the ACA Marketplace and offer one or multiple options to your employees. These plans are typically the only route to the Small Business Health Care Tax Credit. However, they’re only offered on the federal marketplace in eight states and on state-run exchanges in 13 states. 

Pros & Cons of Health Insurance Companies for Small Businesses

Access to PPO networks

Wellness plans

Limited options

Pros Explained

• Access to PPO networks: Insured employees will have access to discounts and other perks that come with being part of a PPO .
• Wellness plans: Insurance programs often include programs designed to incentivize health and wellness. This sometimes includes access to tools that can help with diet, exercise, or other health-related decisions.

Cons Explained

• Limited options: Businesses with fewer employees don't always have the same number of options as larger operations with many employees.

Investopedia analyzed health insurance providers on 27 criteria. We gathered data from state and federal insurance marketplace databases and websites as well as from the National Committee for Quality Assurance, which independently rates healthcare plans. We used this data to provide unbiased, comprehensive reviews to ensure our readers make the right decision for their needs. Investopedia launched in 1999 and has been helping readers find the best health insurance companies for small businesses since 2020.

Frequently Asked Questions

What is a small business.

The U.S. Small Business Administration Office of Advocacy defines a small business as an independent business with fewer than 500 employees. Total number of employees is just one way to measure a business's size, however. According to the SBA, small businesses account for the vast majority of businesses in the U.S.

Do Small Businesses Have to Provide Health Insurance?

If you employ fewer than 50 people full-time, you are not required to offer health insurance to your employees. But more than half of firms that size do offer it, according to the National Federation of Independent Business. A 2022 U.S. Chamber of Commerce survey found that 88% of employees rank health insurance as the most important employer-provided benefit. If you have 50 or more employees and choose not to offer coverage that meets federal standards, you’ll be required to pay a penalty called a Shared Responsibility Payment instead.

How Much Does Small Business Health Insurance Cost?

Costs vary by location and the network and coverage you choose, but on average, small businesses contributed $7,349 per single covered employee in 2023. Experts recommend keeping your total employee benefit costs between 10% to 20% of your overall revenue.

What Is a Self-Insured Health Plan?

A self-insured health plan is a type of group health insurance in which the employer collects premiums and is responsible for paying claims when employees need care. These plans can be self-administered, or the business may work with an insurance provider to get stop-loss coverage (which puts a ceiling on your risk) and administrative support. 

There are several benefits to self-funded plans. Employers can keep surplus premiums (or receive a portion returned by the stop-loss carrier), plans can be customized to a greater degree, and certain ACA provisions that lead to high costs can be avoided. Increasingly, small businesses are opting for self-funded coverage. But self-insured plans aren’t right for every business.

Can an S Corp Pay for Health Insurance?

Yes. An S corp can provide health insurance for its employees. However, most health insurance companies require you to have at least two employees to get a group plan, so if you are an S corp owner and don’t have employees, you’ll need to get individual health insurance from the ACA Marketplace. Additionally, you can’t provide an HRA to anyone with a greater than 2% stake in your company.

Companies We Reviewed

We researched and reviewed multiple insurers to find the best options you see above on this list. These are the companies we researched to help you learn more before making a decision: Aetna, Ambetter (Sunshine Health), Anthem, Blue Cross Blue Shield, Cigna, Kaiser Permanente, Molina Healthcare, Oscar, United Healthcare.

How We Chose the Best Health Insurance Companies for Small Businesses

We chose the best health insurance companies for small businesses by looking at our research for our list of the overall best health insurance companies and then investigating what options these insurers offer for small businesses looking to buy plans for their employees. 

To identify which health insurance companies to review for our overall winners list, we analyzed business and market insight databases, considered health insurance company market share, and researched user-generated data from Google to determine public interest and trends in health insurance companies and plans. 

We collected data from the National Committee for Quality Assurance (NCQA), an independent organization that rates healthcare plans on quality and patient satisfaction. We also gathered data from state and federal government insurance marketplace websites and databases, and directly from companies via websites, media contacts, and existing partnerships. The data collection process took place between Sept. 29 and Oct. 23, 2023.

We then developed a quantitative model that scores each health insurance provider based on 27 criteria that fall into four major categories and are crucial in evaluating the company’s offerings and benefits. We weighted the four categories as follows for this article:

• Plan Quality & Customer Satisfaction : 20%
• Plan Features : 40%
• Availability : 15%

Read our full methodology for reviewing health insurance companies.

• How Does Health Insurance Work?
• How to Choose Health Insurance
• Can I Get Health Insurance Through the Health Insurance Marketplace?
• Is Health Insurance Mandatory?
• How Much Does Health Insurance Cost?
• What Does Health Insurance Not Cover?
• Is Health Insurance Tax Deductible?
• Using Your Flexible Spending Account (FSA) for Health Care
• Best Health Insurance for the Unemployed

J.D. Power. “ Commercial Health Plan Member Satisfaction Declines in Key Areas, J.D. Power Finds. ”

The Commonwealth of Massachusetts. " MiniCobra Continuation of Coverage Benefits Guide ."

Healthcare.gov. " What's An Individual Coverage Health Reimbursement Arrangement (HRA)? "

Healthcare.gov. “ SHOP Marketplace Basics for Employers .”

U.S. Small Business Administration Office of Advocacy. " Frequently Asked Questions About Small Business. 2023 ."

U.S. Department of Health and Human Services. “ As a Small Business Owner, Am I Required to Offer Health Insurance to My Employees? ”

KFF. " 2023 Employer Health Benefits Survey (Section 6) ."

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Best Small-Business Group Health Insurance Plans

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Table of Contents

Best overall: Blue Cross Blue Shield

Best for low-cost plan options: kaiser permanente, best for transparency: unitedhealthcare, best for customer service: humana, best for health expense funds: aetna (cvs health).

As a small-business owner, the decision to offer health insurance to your employees is a personal one. If you have fewer than 50 employees, you are not required by law to offer a group health insurance plan. But you may still want to consider it as a tool to hire and retain workers and to claim tax benefits for your business.

Choosing the right group health insurance plan for your employees depends on your budget and also factors like the number of employees you have, how old they are and where they live. You can purchase insurance through the federal government’s Small Business Health Options marketplace, directly from an insurance provider or using an insurance broker.

» MORE: How much does small business health insurance cost?

Here are our picks for the top small-business group health insurance providers to consider.

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Largest provider network in the country.

Limited plan details available online; must talk to a sales representative.

Why we like it: Blue Cross Blue Shield is an association of 35 locally operated insurance companies throughout the country. Together, the association provides access to 93% of doctors and 96% of hospitals nationwide. This means finding in-network doctors should not be a problem for your employees anywhere in the country.

Blue Cross Blue Shield provides a variety of plan options for your employees, including preferred provider organizations, health maintenance organizations and high-deductible health plans, as well as group dental and vision plans. The company ranks well in J.D. Power’s 2021 Commercial Member Health Plan Study, which measures member satisfaction. Blue Cross Blue Shield wins the top spot in eight U.S. regions.

For 2019, the average rating for Blue Cross Blue Shield plans on the National Committee for Quality Assurance website was 3.5 on a scale of 1 to 5. The NCQA rates plans on factors such as clinical quality and member satisfaction.

Low-cost HMO plans.

Small-business plan comparisons available online.

Available only in California, Colorado, Georgia, Hawaii, Maryland, Oregon, Virginia, Washington and Washington, D.C.

Why we like it: Kaiser Permanente is only available in a handful of states but it is well-rated in those regions, according to the J.D. Power study. Its average rating on the NCQA website is also high, at 4.3. Kaiser is best known for its HMO plans, which it offers at a low cost because patients are generally required to see providers within a small network. As a small-business owner, you can easily view the details of all of Kaiser's group offerings, including pricing information, on its website.

Comparison tool for small-business plans available online.

Available in all 50 states.

Does not rank in J.D. Power’s Commercial Member Health Plan Study of top insurers.

Why we like it: UnitedHealthcare is the largest insurance company in the country by market share; it works with more than 1.3 million physicians and care professionals, and 6,500 hospitals. Its small-business plan comparison tool makes it stand out from the competition. You can enter some basic information about your business and compare plan costs and features easily on UnitedHealthcare’s website. On average, the company’s NCQA rating is 3.4.

Plan details available online.

Smaller provider network than other insurers.

Why we like it: Humana is ranked well for customer service according to the J.D. Power study. The company’s customer service was also rated the best in the health insurance category of Newsweek’s annual Best Customer Service report two years in a row, for 2019 and 2020. On average, its plans had an NCQA rating of 3.4. Humana offers five types of plans geared toward small businesses and lists the features of each on its website.

Large network of providers.

Limited plan details available online.

Why we like it: Aetna has a comprehensive set of health expense funds that you can offer employees for pre-tax savings, such as health savings accounts and flexible savings accounts, as well as health and retirement reimbursement arrangements. (Note: Aetna’s HSA option is paired only with its high-deductible health plans.) Aetna ranks high on J.D. Power’s Commercial Member Health Plan Study and has an average NCQA rating of 3.3.

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Health Insurance

Health care solutions for your small business.

COSE is pleased to partner with Medical Mutual to provide health benefits to Greater Cleveland’s small business community. The COSE Benefit Plan is a self-funded multiple employer welfare arrangement (MEWA) that helps small business employers and their employees manage the increasing cost of healthcare benefits.

The COSE Benefit Plan  

Your COSE Benefit Plan includes

When you choose the cose benefit plan for your health benefit needs, you receive the following advantages:.

• Coverage for businesses with 50 or fewer employees, including business owners with no employees.
• Various plan options, including traditional copay plans and high deductible plans.
• Potential cost savings – self-funded plans are not subject to some ACA-mandated taxes, fees and benefits, and your good health can be reflected in lower premiums.
• Stop-loss coverage to provide additional protection from large financial losses.
• Prescription drug benefits with all plans.
• A suite of wellness programs designed to promote healthy behaviors.
• Medical Mutual’s local customer care team, available through phone or email nearly every day of the week.
• Advocacy through COSE on the state and federal level to ensure that health care reform does not unnecessarily burden small business owners like you.

Discover your health benefits

To learn more about other Medical Mutual health plan options available through COSE, click here.  No matter your plan option, COSE members can receive significant financial savings with their Medical Mutual health plan, including a 1.4% tax savings for businesses with up to 500 employees.

Interested in signing up? Please contact your broker or learn more about COSE Benefit Plan below.

COSE Benefit Plan

Customized health plan for you and your team.

Have a peace of mind with COSE Benefit Plan.

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Medical Mutual

Compare affordable Medical Mutual insurance plans and save money. It’s easy to get a free insurance quote now.

Medical Mutual is the oldest health insurance company in Ohio. It is also the largest health insurer in the state. The company has a large product offering that includes individual and family plans for sale on and off the exchange, and short-term health insurance plans.

The growing medical network features thousands of local healthcare professionals. Medical Mutual has accredited status from the National Committee for Quality Assurance (NCQA) for the SuperMed Plus, HMO Health Ohio, SuperMed HMO, SuperMed Select, and SuperMed Preferred health plans.

Medical Mutual has been around since 1934. It was created by a hospital administrator looking to create pre-payment hospital coverage. This concept became Cleveland Hospital Service Association, the first health insurance company to offer a multiple hospital service network. Medical Mutual eventually became a Blue Cross Blue Shield plan, but reverted back to its former self, Medical Mutual, in 1997.

A recent acquisition includes HealthSpan Partners, a health benefits management company. Medical Mutual is a proud sponsor of the United Way, American Red Cross, and the Salvation Army.

Like many insurance companies, Medical Mutual’s product offerings include the following types of plans: HMO and PPO.

Explore Medical Mutual with HealthMarkets today!

About HealthMarkets

We understand the unique insurance needs of individuals and families as well as small business owners and their employees. Since 2010, HealthMarkets has helped enroll Americans in more than 4 million insurance policies. Let us help you understand the many options available so you can make the best choice. With thousands of plans to choose from nationwide and personal service at no additional cost to you, HealthMarkets is the smarter way to shop for insurance.

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We do not offer every plan available in your area. Any information we provide is limited to those plans we do offer in your area. Please contact Medicare.gov or 1-800-MEDICARE (TTY users should call 1- 877-486-2048) 24 hours a day/ 7 days a week to get information on all of your options.

Attention: This website is operated by HealthMarkets Insurance Agency, Inc. and is not the Health Insurance Marketplace® website. HealthMarkets Insurance Agency, Inc. is licensed as an insurance agency nationwide except in MA. Not all agents are licensed to sell all products. Service and product availability varies by state. Sales agents may be compensated based on a consumer’s enrollment in an insurance plan. No obligation to enroll. Agent cannot provide tax or legal advice. Contact your tax or legal professional to discuss details regarding your individual business circumstances. Our quoting tool is provided for your information only. All quotes are estimates and are not final until consumer is enrolled. Medicare has neither reviewed nor endorsed this information.

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HealthMarkets Insurance Agency offers the opportunity to enroll in either QHPs or off-Marketplace coverage. Please visit HealthCare.gov for information on the benefits of enrolling in a QHP. Off-Marketplace coverage is not eligible for the cost savings offered for coverage through the Marketplaces.

This information is not a complete description of benefits. Call the Plan’s customer service phone number for more information.

Sources: Kaiser Family Foundation (2019). Average Single Premium per Enrolled Employee For Employer-Based Health Insurance.

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Types of small business insurance: The basics for a new business

In a nutshell

Business insurance can protect your business against a wide variety of risks. There are several types of business insurance, each suitable for a different type and size of business.

• Small business owners typically need three types of insurance: general liability, business property and business interruption.
• Additional coverages, such as commercial auto or workers' compensation, may be required by law.
• Business owners should work with an insurance agent to assess the level of coverage they need.

Why does my business need insurance?

As a small business owner, you likely understand the sacrifices and investment needed to be successful. You may also understand the importance of mitigating financial risk and the role your insurance plays in that effort.

Business insurance protects your business against financial risks and can make the difference between profitability and failure. In addition, you might be required to have business insurance by state law.

Related: How much does business insurance cost?

What risks does business insurance protect against?

Insurance protects your business financially, covering events such as:

• Loss of business property due to theft, storm damage, fire or other catastrophe.
• Events for which your business is held liable and potentially sued.
• Loss of income if your business suffers a covered loss (for example, a fire at your retail storefront prevents your business from operating).
• Employee injuries and illnesses.
• Data breaches.

What costs does business insurance typically cover?

Adequate business insurance should help pay for expenses such as:

• Costs to replace business property that is damaged by a fire or other catastrophe, stolen or vandalized.
• Costs related to lawsuits, including attorney and court fees, and settlement and award costs.
• Medical costs if your employees are injured or become ill while on the job.
• Repair and medical costs related to accidents involving vehicles owned, leased or rented by your business.
• Costs related to cyber incidents, such as the recovery of business data.
• Costs required to continue business operations (for example, payroll, equipment rental, property lease) if your business suffers a catastrophic event such as a theft, fire or significant storm damage.

What types of insurance do businesses need?

There’s really no “one-size-fits-all” policy, as small businesses’ insurance needs vary based on numerous factors. But virtually any small business needs three essential coverages.

General liability insurance (GL)

GL comes into play if your business actions cause harm to a third party. These “harms” may include a bodily injury or death, property damage, reputational harm or advertising injury such as copyright infringement. The financial consequences for your business can range from just a few hundred dollars to lawsuits worth millions. With GL, your insurer will help cover your liabilities.

Often, GL can be part of the table stakes for growing your business. You may, for instance, need to show proof of GL as part of a job bid or to fulfill the obligations of a contract. If you rent an office, warehouse or other space, the landlord may require you to have the coverage.

Business property insurance

Business property insurance is financial protection in the event of theft, damage or other loss to your business-owned property. This property can include:

• Electronics.
• Signage and landscaping.
• Inventory stored on your business’ premises.
• Any buildings or other real estate owned by your business.

This coverage typically excludes motor vehicles (company vehicles should be covered by your commercial auto insurance, which is discussed later in this article). It may also exclude losses due to earthquakes and floods. So if your business operates in an area prone to these events, you should consider purchasing commercial flood or earthquake insurance.

The coverage may also be referred to as “commercial property insurance."

Business interruption coverage

If storm damage, theft, vandalism or some other catastrophe forces you to shut down operations, your business interruption coverage can help reimburse your lost business income. It can also cover the cost of your rent, any loan payments and payroll needs or help reimburse relocation expenses if your business must move to a temporary location.

Business owners policy (BOP)

A BOP is a packaging of these three essential coverages. It’s offered by many insurers who sell small business insurance and is usually marketed to small- to medium-sized businesses.

Choosing a BOP package often means you’ll pay less for these coverages — it’s a package deal. And since it’s one policy to buy and own instead of three, you enjoy a little more convenience, a benefit that most small business owners can, no doubt, appreciate.

Other types of business insurance to consider

GL, business property and business interruption coverages form the foundation of a small business’ insurance needs. Depending on the type and size of the business, you may need to consider additional coverages, such as the following:

Commercial auto insurance

This covers company vehicles, whether they’re owned, leased or rented. Commercial auto insurance is similar in many ways to personal auto insurance, but a commercial policy is tailored to the needs of a business.

Commercial umbrella insurance

Umbrella insurance provides additional liability coverage if a claim exceeds a business policy’s GL limits.

Cybersecurity insurance

This covers costs related to cyberattacks, such as recovery and replacement of lost and stolen data, customer notification and legal counsel. This coverage is often called “data breach insurance.”

Employment practices liability insurance (EPLI)

EPLI provides coverage if your business is sued by current or former employees for discrimination, wrongful termination, harassment or other issues.

Inland marine insurance

This insurance provides financial protection for business property that’s transported by truck, train or other overland transport.

Product liability insurance

Liability insurance provides financial protection if your business’ product injures a customer or other third party.

Workers compensation insurance

Also known as worker’s comp, this covers medical expenses, lost wages and rehabilitation expenses if an employee is injured or becomes ill on the job.

How to choose the right policies for your business

Getting the right insurance for your business means first understanding your legal requirements, then assessing your business’ financial risks based on how you operate.

Coverage should match your company’s unique needs. A bakery operating out of a single location with only walk-in business, for example, will likely have very different insurance needs than a landscaping company with a warehouse, trucks, trailers and other equipment that has clients across three counties.

So consider your company’s liabilities and the value of your assets when choosing coverage.

How to get business insurance

The best way to get insurance for your business is to contact a local independent insurance agent .

A small business faces complex risks, and business insurance is a complex product. There’s nobody better than a licensed insurance agent to sort through all that and make sure your business has the coverage it needs. As they typically represent multiple companies, an independent agent can shop around on your behalf to ensure you get that coverage at a price that works for your budget.

Working with an agent means you save time and effort, and can be confident you’re properly covered. So if life as a business owner does sometimes keep you up at night, it won’t be because of your insurance.

The AP Buyline roundup: Protect your business with insurance

As a small business owner, you work hard to grow your business. So you owe it to yourself to protect your business with insurance. Small business insurance needs vary by business type and other factors. But your basic coverage needs include general liability, property damage and business interruption. A licensed and local independent agent can help you get the insurance you need.

Frequently asked questions (FAQs)

What type of insurance is best for a small business.

When it comes to business insurance, there’s no “one-size-fits-all” policy. Most businesses do, however, need general liability, property damage, and business interruption coverages. Some businesses may also be required by law to have commercial auto and worker’s compensation coverages. Beyond that, a business’ insurance needs should be dictated by its unique assets and liabilities.

What are the main types of business insurance?

There are three main types of small business insurance:

• General liability coverage protects a business’ finances if it’s held responsible for property damage or bodily harm.
• Property damage coverage protects a business if its property is stolen, damaged or destroyed by fire, severe weather and other catastrophes.
• Business interruption coverage reimburses the business for lost income if it’s forced to suspend operations due to a covered loss (such as a fire or major equipment theft).

Many insurers offer these coverages in a package called a business owners policy (BOP).

What is commercial insurance?

Commercial insurance is coverage designed for the needs of businesses rather than individuals.

Can I bundle different types of business insurance?

Many insurers offer something called a business owners policy (BOP), which packages general liability, property damage and business interruption coverages. Buying a BOP often saves the business owner money compared to buying these coverages separately.

• Best for customer satisfaction
• Best for older adults
• Best for long-term care
• Best for high returns
• Best for agent support
• Best for term life
• Why you should trust us

Best Life Insurance of June 2024

Affiliate links for the products on this page are from partners that compensate us (see our advertiser disclosure with our list of partners for more details). However, our opinions are our own. See how we rate insurance products to write unbiased product reviews.

Life insurance is as complicated as the policyholders and beneficiaries who use it. That means there's no single "best" life insurance company. Instead, you can find the best option based on what you want or what you prioritize.

Summary of the Best Life Insurance Companies

• Best for customer satisfaction:   State Farm Life Insurance
• Best for older adults:   Prudential Life Insurance
• Best for agent support:   New York Life Insurance
• Best for long-term care:   Columbus Life
• Best for high returns:   Allianz Life
• Best for term life:   North American Company

Best Life Insurance Companies of 2024

While there is no such thing as the objective best life insurance policy, you will be able to find the best insurance policy for your specific needs. Here are our picks for the best life insurance companies, whether you want to use your life insurance policy to build wealth through cash value or you're just looking for a term life insurance policy .

Best Life Insurance for Customer Satisfaction: State Farm Life Insurance

Bundling is standard, and agents often quote with multiple discounts.

• Check mark icon A check mark. It indicates a confirmation of your intended interaction. Best in JD Power customer service ratings
• Check mark icon A check mark. It indicates a confirmation of your intended interaction. Company offers a range of different insurance products to meet buyer needs
• Check mark icon A check mark. It indicates a confirmation of your intended interaction. Agents are knowledgeable about its products
• con icon Two crossed lines that form an 'X'. Life insurance products are conservative and limited
• con icon Two crossed lines that form an 'X'. Buyers may be subject to multi-year waiting periods before they qualify for full payouts on life insurance policies
• con icon Two crossed lines that form an 'X'. State Farm agents cannot offer alternative options if State Farm is unable to bind a life insurance policy

State Farm is one of the insurance industry's most prominent insurers offering auto, home, and other insurance. Bundling is standard, and agents often quote with multiple discounts. Its term, universal, and whole life insurance products are no exception.

• Life insurance products include term and permanent life
• Ranks highly for customer satisfaction

State Farm Life Insurance gets the best life insurance ranking in J.D Power's Individual Life Insurance Study, with a score of 843/1,000. The company is also ranked A++ with AM Best for its financial stability with term, universal, and whole life insurance options. 

All State Farm policies have to be purchased through a State Farm agent. Your agent can help you bundle and save or buy one policy. State Farm is also among the companies offering "survivorship universal life insurance ," which means the policy covers two people, and it kicks in after the second person dies. Couples looking to maximize their death benefit for beneficiaries with one premium payment each month may enjoy lower overall costs.

State Farm agents can run quotes and compare options to find the right plans for each applicant. The range of options, discounts, and familiar name all contribute to the popularity of State Farm's life insurance.

Read our State Farm Life Insurance review here.

Best Life Insurance for Older Adults: Prudential VUL Protector Life Insurance

Offers aggressive financial plans.

• Check mark icon A check mark. It indicates a confirmation of your intended interaction. Available in all 50 states (New York residents may have different plans)
• Check mark icon A check mark. It indicates a confirmation of your intended interaction. Buyers can withdraw money to pay for nursing home bills due to severe illness or disability
• Check mark icon A check mark. It indicates a confirmation of your intended interaction. Knowledgeable agents who can walk you through your options
• con icon Two crossed lines that form an 'X'. Financial returns are limited
• con icon Two crossed lines that form an 'X'. Limited policy options for seniors and other groups who might struggle to find life insurance

The aggressive financial plans offered by Prudential may appeal to many younger buyers and those with a stable income. However, those with lower income or buyers who aren't sure about the financial system may be more hesitant to engage with Prudential. Like many other industry giants, Prudential is working to change this perception.

Prudential Life Insurance is available in all states except New York. New York residents can buy the Pruco Life of New Jersey VUL Protector plan. This plan allows buyers to pull money out of their plan to pay for nursing home expenses. Cash value policy premiums are fixed, so you won't have to worry about extra costs later on. Internal costs are low, which minimizes risk. Due to age, many older adults want a safe investment option for their money. Prudential VUL Protector invests to avoid loss. That also means you're not as likely to see big increases in your available funds outside of what you deposit.

Read our Prudential Life Insurance review here.

Best Life Insurance for Long-Term Care: Columbus Life Insurance

Offers lien method to makes it easier to calculate the financial impact of pulling money out early.

• Check mark icon A check mark. It indicates a confirmation of your intended interaction. Buyers can pull money out for medical and other bills in the event of disease or disability
• Check mark icon A check mark. It indicates a confirmation of your intended interaction. Columbus uses lien method to simplify accelerated death payments
• Check mark icon A check mark. It indicates a confirmation of your intended interaction. Company offers a wide range of riders to customize policies
• con icon Two crossed lines that form an 'X'. Premiums may be higher than competitors
• con icon Two crossed lines that form an 'X'. Term policies are not guaranteed to be converted to whole

Best for long-term care and accelerated death benefits.

Columbus Life offers a wide range of riders to customize your policy with affordable premiums. The company also allows you to convert term policies to whole life insurance policies until the end of your term (generally around age 70). For this and many other reasons, customer satisfaction is high.

When using living health benefits (otherwise known as accelerated death benefits), buyers are allowed to pull money from policies early to pay for medical bills, living costs, etc. under certain circumstances. Most companies use a discounted death benefit, which reduces your final payout using two models. Columbus uses the lien method, which makes it easier to calculate the financial impact of pulling money out early.

Best Life Insurance for High Returns on Income: Allianz Life Insurance

Offers life insurance policies for foreign nationals with H-1B visas.

• Check mark icon A check mark. It indicates a confirmation of your intended interaction. Plans offer high returns on investment
• Check mark icon A check mark. It indicates a confirmation of your intended interaction. Great for investment and long-term retirement planning
• Check mark icon A check mark. It indicates a confirmation of your intended interaction. May increase your income by as much as 20%
• Check mark icon A check mark. It indicates a confirmation of your intended interaction. Allianz offers plans for foreign nationals including H-1B visas
• con icon Two crossed lines that form an 'X'. Plans are meant specifically for high-income adults, alternatives may not be offered

Best for investing and high returns on income.

Allianz Life plans are geared towards high-income adults looking for more tax-free income. Allianz offers a 40% multiplier bonus with a 1% annual assets charge. In short, the professionals managing your investments take 10%. Overall, your investments would pull in an extra 14%-1% asset charge. This means you end up with 3% more than what you deposit every year your life policy is active. This plan offers strong returns when using a life policy to supplement your retirement savings. Allianz also offers specialized plans to grow your income by as much as 20% according to some estimates.

Of note: Allianz also offers plans for foreign nationals, including those with H-1B visas.

Best Life Insurance for Agent Support: New York Life Insurance

Offers aggressive financial products and extensively trained agents.

• Check mark icon A check mark. It indicates a confirmation of your intended interaction. Strong life insurance options for financial planning and wealth building
• Check mark icon A check mark. It indicates a confirmation of your intended interaction. Policies available nationwide
• Check mark icon A check mark. It indicates a confirmation of your intended interaction. Knowledgeable life insurance agents
• con icon Two crossed lines that form an 'X'. May require a medical exam
• con icon Two crossed lines that form an 'X'. Buyers looking for more modest policies may not find the most competitive pricing

If you're preparing for a comfortable retirement or looking to build generational wealth, New York Life is one of the strongest options. If you have questions or genuinely want to understand your life insurance options, New York Life agents are among the most qualified professionals in the business.

• Life insurance provider with policies available across the US

New York Life Insurance agents go through extensive training before they ever hit the sales floor. What does this get you? Policies vary widely, and New York Life offers both large and small payouts. Some policies have significant penalties for early withdrawal, but taking a loan offers more options. Whatever your questions, New York Life agents are trained to offer comprehensive support giving you accurate information about its policies every time. The company comes in at position eight in J.D. Power's latest life insurance customer satisfaction study.

Read our New York Life Insurance review here.

Best Life Insurance for Term Life: North American Life Insurance

Offers term policies alongside accelerated death benefits for critical, chronic, and terminal illnesses and more.

• Check mark icon A check mark. It indicates a confirmation of your intended interaction. Offers accelerated death benefits for critical, chronic, and terminal illnesses
• Check mark icon A check mark. It indicates a confirmation of your intended interaction. Offers conversion for life policies up to 70 years old
• Check mark icon A check mark. It indicates a confirmation of your intended interaction. Term policies can be renewed up to age 95 for qualifying applicants
• con icon Two crossed lines that form an 'X'. Not all term policies qualify for renewal or conversion

Best Term Policy.

North American Company offers term policies alongside accelerated death benefits for critical, chronic, and terminal illnesses and more. The company allows one conversion on a 20-year policy at 15 years or 70 years old (whichever is earlier). The conversion cannot happen later than the five-year marker regardless of which policy you choose or the length. North American Company also offers a term policy with a lower premium renewable up to the age of 95 for qualifying insureds.

Types of Life Insurance

While there's many different types of life insurance policies , broadly speaking, there are two types of life insurance: temporary and permanent. Let's go over each in detail.

Temporary life insurance

Temporary life insurance is often called term life insurance. This type of policy covers you for a set amount of time before expiring, usually between 10-30 years. If you pass away after your policy expires, your family won't receive any benefits. Additionally, your policy won't accrue cash value like a permanent policy. That said, some term life insurance policies offer a conversion from term to whole life insurance, so you can extend your coverage. 

Because its benefits aren't guaranteed, term life policies are generally cheaper than permanent life insurance. That said, the vast majority of term life insurance policies never pay out. on

Permanent life insurance

Permanent life insurance is an umbrella term for a variety of life insurance policies that will insure you indefinitely and guarantee a payout as long as you maintain your policy. Policy types that fall under permanent life insurance includes:

• Whole life insurance
• Universal life insurance
• Variable life insurance
• Variable universal life insurance
• Simplified life insurance
• Guaranteed issue life insurance

These policies vary widely in purpose and intended buyers, but all guarantee death benefits to your loved ones. Some permanent life insurance policies, like whole, universal, and variable have a cash value component , which you can use as a savings tool or to leave your heirs a larger death benefit.

How to Pick the Best Life Insurance Policy for You

Finding the right fit in life insurance starts with finding a trusted insurance agent. Because there are so many state regulations, shopping for homeowners or auto insurance can be easily done online. Life insurance is not required. So it's a voluntary purchase. Many buyers don't know what they need or when they need it. Before making your selection, consider a few things:

Some companies will sell you a policy for your child as soon as they're born. While this may seem morbid, early sign-up means lower rates for a policy your child could enjoy in the future. Regardless, early sign-up equates to more policy for lower premiums and a higher likelihood of acceptance. At 20, you may be healthier and be able to pay into the policy for a longer period compared to when you're 50 with more age-related conditions.

As a general rule, never agree to more than you can afford. For the average life insurance agent, their job is to sell you a large policy with a large commission. Consider not only how much you make now, but how likely your current income is to continue. If you work on a project basis and your project is scheduled to end in 12 months, you may want to reconsider a policy premium outside your monthly savings.

How much are you prepared to buy? Some people only want a small policy to cover funerals and other end-of-life expenses. Others build a life policy into their retirement plan. Whatever direction you're going, involving a financial planner could help you make the right decisions. Depending on the carrier, customers can also compare set limits with index universal life policies, which set no limit. These policies never expire, and the value builds over the entirety of your life.

Living Benefits

Life happens unexpectedly. You could be healthy one day and in the hospital the next. Many life policies offer living benefits. These allow you to draw a limited amount out of your policy to cover medical and other bills you cannot pay while sick.

Much like a 401(k), many life insurance policies have penalties for early withdrawal. No matter what policy you want, this question is critical to an informed decision. It's a question of how early you can withdraw and how much you'll lose from the total to have the money in 10 years instead of 30 or after death.

Some policies require insured parties to pay premiums for at least one year before any significant payout would be available. Suicide exclusions are common. Even with no medical exam policies, the company may still do a check for known conditions. An insurance company has to mitigate its risk.

Flexibility

Once you've been denied a life insurance policy, a mark goes on your record. No matter the reasons, other insurance companies may deny you coverage based on the first denial. So consider your whole situation and choose your policy carefully before you submit any applications. Some policies have greater flexibility if you lose your job or otherwise can't make payments. Others will lapse if you miss even one payment.

Payment Type

Even within whole life or term life insurance policies, customers have the option to choose guaranteed fixed or variable rates. Some have guaranteed payouts, but you'll need to ask your agent for details.

What is your intended use? Why are you shopping for a life insurance policy in the first place, and what are your goals? Many successful financial planners also have a background in life insurance. So while they may not be able to find you a specific life insurance policy, financial planners can help you set out a blueprint for your purchase.

Why You Should Trust Us: How We Reviewed the Best Life Insurance Companies

In life insurance, it's easy to get "sold a bill of goods." Many life insurance agents pass a state test to be thrown into the deep end. Agents sell the company product, but not all know the products. In this vein, we look at the products each company offers. We also look at agent training.

A good life insurance agent may not volunteer all facts upfront. But a company's agents should answer questions about its products accurately and in a way the average consumer can digest. Agents should be able to inform you about the long-term benefits and limitations. This will help customers find the right policy for their long-term plan.

We consider affordability, policy sizes available, and performance for a comprehensive assessment in our insurance rating methodology . If you can, we recommend also working with a financial advisor to make a plan for your future with life insurance.

Our Expert Panel for The Best Life Insurance Companies

To inform our choices for the best life insurance companies, we spoke with the following experts:

• Paul LaPiana , head of product at MassMutual
• Barbara Pietrangelo , CFP, CLU, and chair of the nonprofit Life Happens
• Wykeeta Peel , Corporate Vice President and Market Manager, African American Market Unit at New York Life

The Experts' Advice on Choosing The Best Life Insurance for You

How much life insurance coverage do you believe the average buyer should have.

Paul LaPiana, Head of Product at MassMutual

"There are different approaches to determining how much life insurance you need. One is the 'human life' approach, which estimates the current value of your future earning potential. Another is securing specific coverage to pay off debts such as a mortgage or provide for the education of children. A comprehensive protection plan should provide the right amount of coverage over the course of your working life and into retirement."

Barbara A. Pietrangelo, Chair of Life Happens

"There is no one-size-fits-all life insurance policy because everyone is different. One way to get a rough estimate is to multiply your income by 10 to 15; another is adding $100,00 to that amount, should you have a child and anticipate college education expenses.

Your best bet is to talk to a financial professional or use the Life Insurance Needs Calculator on LifeHappens.org to analyze what's right for you."

Wykeeta Peel, Corporate Vice President & Market Manager African American Market Unit at New York Life

"As you consider what policy best meets your needs, it can help to answer four key questions: First, how much death benefit do you need? Second, how long will you need that coverage? Third, what is your budget (or how much monthly premium can you afford to pay?), and finally, what is your investment risk tolerance?

To determine how much death benefit makes sense, it's helpful to think beyond using life insurance to cover funeral expenses and consider whether anyone is relying on the policy owner's income to maintain a lifestyle, pay rent or a mortgage, or fund a child's education and for how long.

There are various rules of thumb regarding the right amount of Life insurance coverage. Some tips can be found online, but they only provide an estimate and don't necessarily factor in an individual's specific needs. In my opinion, human guidance, powered by technology, is required. Basically, it comes down to how much money your loved ones would need to remain on firm financial ground if your earnings were no longer in the picture and that is different for everyone."

What is the biggest opportunity you see for improvement in the life insurance industry?

"Increased accessibility through digital and other channels as well as through underwriting enhancements. Increased tailoring of products and features. And an increased emphasis on health and wellness programs."

"Having enough qualified insurance professionals to walk potential buyers through the multiple benefits of life insurance will be pivotal to the growth of the industry. Education is a key factor here, as professional agents also need to be able to explain life insurance and its benefits in an easy, digestible way, especially when there are so many misconceptions about life insurance."

"The need for life insurance is greater than ever. In fact, a recent New York Life Wealth Watch survey found that 37% of adults have been thinking about life insurance more often these days – and half of adults report that financial products that provide protection (50%) and reliability (50%) are more important now compared to last year. This may be especially true for middle-market and Cultural Market families.

Our organizational structure of having Cultural Market agents embedded in the communities where we live and work allows us to understand the needs of diverse communities and develop solutions that resonate with them."

What advice would you give to buyers who are debating whether or not to buy life insurance?

"It is difficult to say with any certainty how healthy you will be years from now. That's why securing life insurance, and insuring your insurability, today, when you are the youngest you'll ever be again, and perhaps your healthiest is a wise decision."

"Do you love someone? If the answer is yes, then life insurance is certainly something you should consider. Many buy gifts and experiences to express their love, but haven't considered that life insurance is just another way to say I love you. Nothing says support like ensuring your family's financial security and peace of mind."

"If you have someone depending on your income, you should consider purchasing life insurance. A death benefit from a life insurance policy can replace income from the loss of a breadwinner, ensure a family can stay in their home, fund educational or retirement expenses, address debt and so much more.

A life insurance policy can also help you grow your family's wealth over time. Once the risk of an unexpected loss has been managed, you can begin to think more broadly about your family's financial future. Life insurance can enable your mindset to shift from death to growth."

What's the most important thing buyers should look for when choosing a life insurance agent/company to buy from?

"With life insurance, you are securing a future commitment that may be decades away. Research the company behind the policy to ensure it has high financial strength ratings, longevity, and an excellent track record of paying claims."

"When looking for an insurance agent or company, be sure to do your research. When comparing companies, be sure to remember that the policy features that fit you and your loved ones best is the most important factor. Don't automatically assume you should buy from the higher-rated company.

If the policy from the other company has more of what you're looking for, it might be the better choice. If you're unsure where to start, try the Life Happens Agent Locator to find an insurance professional in your area."

• "The insurers' track record: At its core, life insurance is protection - a hedge against the unexpected - and you are paying premiums in exchange for the promise that the insurer will be there when you need them, so the financial strength and track record of the company backing your policy is critical.
• Customer service: Are service professionals available by phone and digital channels? Is there is an online dashboard where you can manage your policy? Beyond ensuring assistance is available after you purchase a policy, it's also critical to ensure you have access to trusted advice and guidance before you buy.
• Flexibility in conversion: How easy is it to change? Life can be unpredictable and while term insurance can cover your loved ones through a critical period of time, you may decide that access to cash value is an important piece of your strategy.
• Accelerated online applications : Online applications are convenient but don't replace human guidance. Keep in mind that accelerated online applications may have a maximum coverage amount, meaning that you may not be able to get all the coverage you may need exclusively through an online process.
• A range of payment options: It's important to understand how often you're required to make premium payments and whether and how often you can change the frequency of payments."

Best Life Insurance FAQs

According to JD Power's 2023 life insurance study, State Farm is the highest-rated life insurance company when it comes to overall customer satisfaction. However, you still may want to shop around for quotes from various insurers if you're looking to purchase a new policy.

There isn't one best life insurance company, because the best option for you will depend on the type of policy you're looking for. It's best to work with a qualified insurance agent to help you find the best coverage. If you're deciding between multiple similar options, it's also worth consulting J.D. Power's life insurance customer satisfaction study . The latest study ranks State Farm as the top pick for individual life insurance, outpacing Nationwide by three points.

The best type of life insurance policy for you will differ from someone else's, as your policy should be tailored to your needs. The best policy for you will be affordable and will offer the benefits best suited to your situation. For example, some policies are only meant to cover end-of-life expenses such as burial and funeral arrangements, whereas others include living benefits like a cash value insurance plan , which you can borrow against during your lifetime.

Some life insurance policies are advertised as "no medical exam." This doesn't mean the insurer won't ask you about known conditions or look at medical records. Policies with no medical exam also tend to offer lower benefits with higher premiums. Most companies have a network of medical examiners, some of whom can come to your home. You can find our guide on the best no exam life insurance here.

Each situation is different and requires a knowledgeable life insurance agent to assess your best options. Bring all your questions and the coverage you're looking for to an insurance agent near you to explore your options.

Editorial Note: Any opinions, analyses, reviews, or recommendations expressed in this article are the author’s alone, and have not been reviewed, approved, or otherwise endorsed by any card issuer. Read our editorial standards .

Please note: While the offers mentioned above are accurate at the time of publication, they're subject to change at any time and may have changed, or may no longer be available.

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• Small Business

The Single Best Insurance Policy Every Small Business Needs

Updated May 28, 2024 - First published on May 27, 2024

By: Ben Gran

• If you own a business of any size, in any location, and in any industry, you need to think about small business liability insurance.
• Liability insurance for your business is like liability insurance for your home or car -- it protects you from costly damages and worst-case scenarios like lawsuits.
• The best insurance companies for home and auto policies also often offer small business insurance.

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Small business owners don't usually love thinking about insurance. You're in business to make money, create products, meet people, drive growth, and generate forward momentum in life -- not worry about lawsuits, catastrophic losses, ruinous risks, and worst-case scenarios. But that's exactly why small business insurance is so important: it protects you from the unthinkable worst-case scenarios.

Let's look at what small business liability insurance is all about, and why your business needs it.

What is covered by small business liability insurance?

Business insurance selection guide.

Choosing the right small business insurance is essential for protecting your assets and ensuring your operations run smoothly in the face of unexpected events. It’s about finding coverage that fits your specific needs and provides peace of mind as you grow. The tool below is designed to guide you through the selection process in a friendly, straightforward manner, helping you secure the perfect insurance plan that safeguards your business’s future.

Here are a few types of risks and threats that you can protect yourself from with small business liability insurance.

Personal injuries (and lawsuits)

A classic example of why businesses need liability insurance is "what if someone slips and falls down the stairs at your restaurant, and sues your business?" Business liability insurance can help defend you against lawsuits, resolve personal injury claims, and pay medical costs for this type of unfortunate situation (and others).

Property damage

There are various types of property damage and financial costs that your business could be held liable for:

• What if you own a construction firm, and one of your employees accidentally damages a customer's home during a renovation project?
• What if you're driving the company car and you crash into a building?
• What if your moving crew accidentally drops a customer's TV and breaks it?

Having property damage insurance coverage can help your business run more smoothly. It gives everyone peace of mind that you, your employees, and your customers are protected in case of accidents, mistakes, or other costly losses.

Professional liability

If your business provides professional services, like accounting, consulting, or advisory services, you can get a customized business liability policy that covers you in case of a lawsuit for professional errors, mistakes, negligence, or misjudgments. This type of coverage is also called "Errors & Omissions" (E&O). The best insurance companies can help you get a liability insurance plan that covers the particular risks facing your industry or profession.

Employment practices liability

Once your business hires its first employee, and especially after you have many employees, your liability insurance needs become more complicated. Employment practices liability coverage can help protect you in case of a lawsuit by an employee -- such as discrimination, harassment, wrongful termination, or other issues with employment law.

This type of liability insurance is usually not included with a general liability insurance policy; instead, you have to buy this coverage as an add-on endorsement. Also, this insurance is different from workers' compensation insurance, which your state will also likely require you to have for your employees.

Why every small business can benefit from liability insurance

Small business owners have a lot to consider: customer needs, product development, staying ahead of competitors, maximizing marketing, beating sales goals, getting paid on time, managing cash flow, paying the bills, and making payroll . The last thing you need in your life is another costly, unexpected check to write. Or worse, a financially and emotionally draining lawsuit that makes you pay legal fees out of your own bank account.

Small business liability insurance makes sure you don't have to pay for all these costs yourself. No matter what size of small business you own, or what industry you're in, you should buy small business liability insurance.

Bottom line

Ready to sign up for small business liability insurance? An independent insurance agent can help you find a good policy. Or if you like the insurance company that covers your home and auto, check to see if they offer business insurance too. The best home insurance companies often offer business insurance coverage, as well as personal policies.

Small business liability insurance is not usually expensive (typical premium costs might start at $40-$55 per month). But it can save you many thousands of dollars and provide priceless peace of mind.

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Our Research Expert

Ben Gran is a freelance writer based in Des Moines, Iowa. He has written for regional banks, fintechs, and major financial services companies. Ben is a graduate of Rice University.

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Elektrostal , city, Moscow oblast (province), western Russia . It lies 36 miles (58 km) east of Moscow city. The name, meaning “electric steel,” derives from the high-quality-steel industry established there soon after the October Revolution in 1917. During World War II , parts of the heavy-machine-building industry were relocated there from Ukraine, and Elektrostal is now a centre for the production of metallurgical equipment. Pop. (2006 est.) 146,189.

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Columbia Insurance Group Selects Guidewire to Modernize Business Operations

Columbia Insurance Group (Columbia), a mutual insurance company specializing in comprehensive property and casualty insurance for small and mid-sized businesses, and Guidewire (NYSE: GWRE) announce a new partnership.

Columbia selected Guidewire InsuranceSuite as their next technological platform to ensure they are serving customers to the best of their ability. Soon Guidewire will power Columbia’s core business, simplify its IT operations and help deliver additional value to agents, policyholders and employees.

It is an essential move to meet the changing market demands, according to Columbia Vice President and Chief Information Officer Lisa Wharton.

“We selected Guidewire because we needed to modernize our technology platform to meet our long-term business strategy needs,” she said. “Guidewire is the leading insurance software provider in the world. It is ahead of others in functionality, focus on research and development, and support, just to name a few.”

Columbia plans to implement InsuranceSuite on Guidewire Cloud for all lines of business in each of the states where it operates individually. Guidewire PartnerConnect Consulting Global Premier member PwC will aid in the project’s implementation.

According to PwC Global Guidewire Practice Leader Imran Ilyas, they are pleased to help guide Columbia’s technological transformation.

“In today's dynamic and ever-changing business environment, cloud transformation has become an essential requirement rather than a luxury,” Ilyas said. “We remain dedicated to providing Columbia with unmatched expertise and support as they embark on this transformative project.”

Wharton agreed. “Guidewire’s approach to cloud transformation made it an easy next choice. The automation, real-time processing and ability to take advantage of emerging technologies will position us to better compete with bigger insurers.”

Guidewire Chief Sales Officer David Laker said Guidewire is happy to partner on this newest chapter in Columbia’s journey to serve customers well. “We are pleased Columbia has chosen Guidewire to serve as the technology foundation to continue its mission of building enduring relationships with its customers by providing exceptional service and value,” he said. Wharton said this new partnership helps ensure Columbia’s trusted, superior customer service will continue for generations to come.

“It is truly a monumental time for Columbia, and Guidewire is a key part of that plan. It offers a new, innovative approach enabling smaller insurers to implement emerging technologies in a more economical and expedient fashion,” she said. “We are confident in our plan to deliver a state-of-the-art system that will provide a better experience with less transactional friction, higher efficiency and improved speed to market.”

Columbia also selected Guidewire Canvas , Guidewire Compare , Guidewire Explore , Guidewire HazardHub and Guidewire Predict to embed insights—and the data behind those insights—directly into policy and claims workflows. Additionally, the company selected SmartCOMM™ from Smart Communications for customer communications management. Guidewire is a reseller of Smart Communications, a Guidewire PartnerConnect Solution member.

About Columbia Insurance Group

Insuring peace of mind since 1889, Columbia Insurance Group specializes in providing comprehensive property and casualty insurance protection to small and mid-sized businesses. Thanks to a dedication to exceptional service, partnership with incredible independent agents and a commitment to continuous improvement, today CIG serves policy holders in 14 states with regional offices in Columbia (headquarters), Atlanta, Austin and Omaha. For more information, please visit http://www.colinsgrp.com .

At PwC, our purpose is to build trust in society and solve important problems. We’re a network of firms in 152 countries with over 327,000 people who are committed to delivering quality in assurance, advisory and tax services. Find out more and tell us what matters to you by visiting us at www.pwc.com .

About Guidewire Software

Guidewire is the platform P&C insurers trust to engage, innovate, and grow efficiently. We combine digital, core, analytics, and machine learning to deliver our platform as a cloud service. More than 540 insurers in 40 countries, from new ventures to the largest and most complex in the world, run on Guidewire.

As a partner to our customers, we continually evolve to enable their success. We are proud of our unparalleled implementation track record, with 1,600+ successful projects, supported by the largest R&D team and partner ecosystem in the industry. Our marketplace provides hundreds of applications that accelerate integration, localization, and innovation.

For more information, please visit www.guidewire.com and follow us on X (formerly known as Twitter) and LinkedIn .

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• Business Insurance
• Best General Liability Insurance For Small Business

Best General Liability Insurance For Small Business Of 2024

Fact Checked

Updated: Jun 10, 2024, 7:05am

A lawsuit over a problem like an accidental injury could financially ruin a small business. General liability insurance covers your small business for claims of accidental injuries and property damage to others, as well as other types of claims against you, such as reputational harm.

We evaluated 20 large insurers to help you find the best general liability insurance for a small business.

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Our editors are committed to bringing you unbiased ratings and information. Our editorial content is not influenced by advertisers. We use data-driven methodologies to evaluate insurance companies, so all companies are measured equally. You can read more about our editorial guidelines and the methodology for the ratings below.

• 20 small business insurers analyzed
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• How Much Does Workers Compensation Insurance Cost?

Best General Liability Insurance for Small Business 2024

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A.M. Best financial strength rating

A- (Excellent)

Frankenmuth

The hanover.

Online quotes?

Complaints about general liability insurance

No complaints

AM Best financial strength rating

A+ (Superior)

Allstate may be best known for insuring homes and cars, but it also sells business insurance and has a stellar complaint track record for commercial liability insurance. An Allstate agent can help you select the liability insurance that’s right for your operation.

• General liability insurance is available for industries, including retailers, florists, realtors, electricians and many more.
• Can provide insurance for home-based small businesses.
• Website has helpful lists of coverage types you may need based on your industry.

A (Excellent)

With over 300 coverage types available, you can find comprehensive coverage from CNA for your business’s risks.

• Industries that can be covered by CNA business insurance include retail, restaurants, construction and technology.
• The CNA Connect Businessowners Policy combines general liability insurance with property coverage and a host of other valuable coverage types, such as computer equipment, accounts receivable and more.

You’ll find a wide variety of business insurance types and the assistance of a Farmers agent.

• Offers MySafetyPoint workplace safety videos and material about loss control to its business insurance customers.
• It looks like you can get a quick quote on the Farmers’ website but after filling out your information you’ll only get the name of a Farmers insurance agent.

Frankenmuth offers customized, business-specific insurance packages for retail stores, manufacturing, small offices and others.

• Frankenmuth insurance is sold by local independent agents.
• Frankenmuth is a regional insurer operating in 15 states in parts of the Midwest and Southeast.
• Types of businesses that can be insured by Frankenmuth include contractors, retail stores, professional offices and wholesalers.

A wide range of businesses can find insurance from The Hanover, which boasts an excellent complaint track record.

• Insurance from The Hanover is sold by local independent agents.
• The Hanover’s online library has articles and videos with small business insurance tips and explanations.

Westfield sells business insurance in 21 states and has a good track record for low complaints.

• You can bundle together coverage types to address your specific business size and industry with the Westfield Signature Series.
• Small business owners will likely appreciate Westfield’s free SizeUp Competitive Analysis Tool, which lets you compare business revenue, staffing, worker salaries and more in your area.

Markel’s insurance solutions can help a wide range of small businesses, including personal trainers, medical offices, contractors, eateries, in-home child care and many more.

• Online quotes are available.
• Helpful online charts for many specific industries show various tiers of recommended coverage types.

With its low complaint level, online quotes and customizable small business insurance policies, Nationwide’s general liability insurance deserves a look.

• Complaint levels about commercial liability insurance have been below the industry average for three years.
• However, complaints related to commercial property insurance were almost twice the industry average last year.

A++ (Superior)

Chubb’s combination of low complaint level and high financial strength will appeal to businesses looking for general liability insurance. Chubb’s small business insurance is targeted to businesses with up to $30 million in revenue.

• Chubb’s business owners policy (BOP) can be customized with coverage, such as flood insurance, electronic data liability, equipment breakdown, professional liability and other valuable coverage.
• The liability coverage in Chubb’s BOP can be customized to include “broad named insured,” which will automatically cover all entities in which you own more than 50% interest.
• Chubb’s BOP can also cover “blanket additional insureds,” allowing you to list groups of people to be covered rather than a list of specific names.

As the largest seller of commercial liability insurance on our list, Travelers also boasts very few complaints about its business insurance.

• You must go through a Travelers insurance agent.
• Risk control resources include self-service materials that you can access any time.
• A variety of online services includes bills and payment histories, certificates of insurance and annual premium audits.

General liability insurance is a type of small business insurance that covers your business for accidental injuries and property damage caused to others. It also covers other problems such as advertising injury, copyright infringement and reputational harm.

These types of claims may result from your company’s products, services or operations. Without general liability insurance, you could end up paying out of your business’s income and, in a worst case scenario, even go bankrupt.

General liability insurance is sometimes called “business liability insurance” or “commercial general liability insurance.”

If someone makes a claim against your business for a problem, such as the ones listed above, your general liability policy will kick in. It will pay claims up to your policy limit. When you buy a policy, there are generally two limit types to be aware of:

• Per-occurrence limit. This is the maximum amount your insurer will pay out for a single claim, such as a per-occurrence limit of $1 million.
• Aggregate limit. This is the maximum amount your insurer will pay for all the claims filed during your policy period. For example, if your aggregate limit is $2 million, your insurer will not pay above that amount during your policy period, no matter how many claims were filed against you.

General liability covers a wide range of problems, including accidental injuries and property damage to others, as well as lawsuits for problems like claims of defamation or libel.

General liability insurance covers a lot for a business, but it won’t cover business-related auto accidents, employee injuries and illnesses, damage to your business property, mistakes in professional services, claims that exceed your policy limit or illegal acts by you or your employees.

For these kinds of problems, you’ll need different types of business insurance, including:

• Employee injuries and illnesses. You need workers compensation insurance to provide coverage for employee injuries.
• Auto accidents. For auto accidents while doing business, a commercial auto insurance policy financially protects you if you own the vehicle. A hired or non-owned auto insurance covers a personal car or a rented car for work.
• Professional mistakes. An errors and omissions insurance (E&O) policy provides coverage if you make mistakes in the course of your work. An E&O policy is sometimes called professional liability insurance.
• Theft and damage to your business property. General liability insurance won’t cover your business equipment or property against theft or damage. You need a commercial property insurance policy to cover these types of problems.

Insurance won’t cover intentional acts, such as a computer you throw out the window. And general liability insurance won’t help if there are deliberate, illegal acts or wrongdoings by you or your employees.

There are a handful of scenarios where general liability insurance policy is necessary for your small business:

• Your clients require you to have business liability coverage.
• Your small business is open to the public.
• You work with vendors or clients.
• You use social media professionally or personally.
• You use third-party locations for business activities.
• You have temporary or seasonal employees.
• You work with independent contractors.
• You advertise and market your business.

General liability insurance is an indispensable coverage type for just about any business. For example, a contractor insurance policy without general liability wouldn’t cover property damage you accidentally cause at a client’s site. More examples of business types that need general liability insurance include:

• Accountants or tax preparers
• Consultants
• Contractors
• Freelancers
• Electricians
• Home inspectors
• Janitorial services
• Landscaping companies
• Marketing agencies
• Real estate agents
• Small business owners
• Technology professionals

The average cost for general liability insurance is $42 per month , according to Insureon. That’s $504 per year, but your small business’s costs may be cheaper. More than a quarter (29%) of Insureon small business customers pay less than $30 per month. Less than half (41%) pay between $30 and $60 per month, and 30% pay more than $60 per month.

Your general liability insurance costs will depend on factors such as:

• Your business type. High-risk businesses (such as construction) typically pay more than low-risk businesses (such as a graphic designer).
• Years of experience. The number of years you’ve been working as a professional in your field can impact your premium.
• Location. If your company is located in a low-crime neighborhood or in a low-traffic area, your premium might be cheaper than if it were in a high-crime, high-traffic one.
• The insurance claims history for your business. If you have a history with a high number of insurance claims, you can typically expect to pay more for general liability insurance.
• Amount of coverage. Higher annual coverage limits will impact your costs.

Examples of General Liability Costs by Industry

General liability insurance is the foundation of your small business insurance plan. You can find a good policy by following these steps.

Gather Your Information

You’ll need to have basic information and documentation, including:

• Your contact information.
• Details on what your business does.
• The number of years you’ve been in business.
• Number of employees.
• Payroll documentation.
• Estimated business revenue for the upcoming year.
• The number of years you have owned the business.
• Whether you own or rent the building where your business is located.

Consider a Business Owners Policy

A general liability insurance policy is foundational coverage for your small business, but it won’t cover problems like theft, vandalism, fire, severe weather and lost income. If you want coverage for these types of issues, you’re going to need to buy additional coverage.

A good way to do this is by purchasing a business owners policy (BOP) , which bundles general liability insurance with commercial property insurance and business interruption insurance. It’s typically cheaper to buy a BOP than to buy all three policies as standalone policies.

Compare General Liability Insurance Quotes

Small business insurance companies don’t price their policies the same. The best way to find a good price on a general liability insurance policy or a BOP is to compare business insurance quotes from multiple companies. You can get free business insurance quotes online or by speaking with an independent insurance agent.

Is General Liability Insurance Required by Law?

Business liability insurance isn’t required by law, but if you fail to buy coverage, you’re leaving your business vulnerable to a wide variety of costs that could potentially bankrupt your business.

Facing judgments, legal settlements and lawyer fees without the aid of general liability insurance can be very expensive and even bankrupt a business. Legal counsel can cost more than $100 an hour. Court costs may exceed $75,000 if the claim goes to court, and you may need to spend several thousand dollars even if a lawsuit is dropped, according to The Hartford.

Not having general liability insurance puts your business at financial risk. And you may lose clients because they won’t do business with you if you don’t have general liability insurance.

To prove that you have insurance coverage, you’ll need a certificate of insurance. This official document lists all the coverage types and limits on an insurance policy.

Related: Builder’s Risk Insurance: Definition, Coverage And Cost

If you purchase general liability insurance, it’s important to be aware of two types of limits.

• Per-occurrence limit: This is the maximum amount that your insurance company will pay out for a single claim. If your per occurrence limit is $1 million, your insurance will cover up to that amount per incident.
• Aggregate limit: This is the maximum amount your insurance company will pay out for all the claims you file during your policy period. If your aggregate limit is $2 million, your insurance company will not pay you more than that amount regardless of the number of claims against you. Most general liability insurance policies have a term of one year, so the aggregate limit would apply for that period.
• Bodily injury claim. A customer browsing your store bumps into a shelf, causing a heavy object to fall and hit their foot, breaking their big toe. Your general liability insurance can cover the customer’s medical costs as well as any legal costs, judgments and settlements that arise out of the incident.
• Copyright infringement claim. You create business marketing material and someone claims you used their artwork without permission. General liability insurance can help cover the costs of a lawsuit, including your legal defense, judgments and settlements.
• Property damage claim. Your workers move a large appliance into a client’s home and in doing so, damage your client’s hardwood flooring and walls. Your general liability insurance can kick in to cover the damages.
• Reputational harm claim. While doing press to promote a big sales event at your business, you say something about another business, which results in a lawsuit for slander. General liability can help pay for your legal defense, judgments and settlements.
• Business liability coverage: Another term for general liability insurance, which covers accidental injuries and property damage to others, copyright infringement, reputational harm and advertising injury.
• Business owners policy: Specific type of policy that packages together multiple coverages, including general liability coverage, business interruption insurance and business property insurance. You may also add other coverage types, such as workers compensation, professional liability, commercial auto and data breach insurance.
• Commercial umbrella insurance: An additional policy that kicks in when a claim exceeds the coverage amount of an underlying policy. For example, if a claim exceeds your general liability limit, your commercial umbrella insurance can cover the difference.
• Employment practices liability insurance: This policy covers settlements for claims that your business wrongfully terminated an employee or violated their rights. Employment practices liability insurance also covers your legal costs for these claims.
• Exclusions: This is a restriction on your policy that limits or fully excludes coverage for specific events, locations, people or property. For example, a general liability insurance policy excludes coverage for employees who are injured on the job (that’s covered by workers comp).
• General liability classification code: A code based on your industry that helps an insurer determine your business’ risk level.
• Medical payments insurance: This covers medical expenses when your company is responsible for injuries to someone else (not including your employees).
• Personal and advertising injury liability: This covers claims such as an employee speaking or publishing inaccurate information that libels or slanders an organization or person. It also covers claims that published material infringes on a copyright, results in a wrongful eviction or violates a person’s right of privacy.
• Property damage insurance: This covers accidental damage to someone else’s property. For example, if your employee damages someone’s home while working at a jobsite.
• Subrogation: Your insurance company might try to recoup money it paid on a claim from the insurance company of the party that was responsible for the injuries or damage.

We rated the largest business insurance companies based on complaint data for commercial liability insurance. Complaint data is based on complaints upheld by state insurance departments across the country and collected by the National Association of Insurance Commissioners.

Business Insurance Made Simple

How does general liability insurance work?

If someone makes a claim against your small business for a problem covered by your policy, your general liability insurance can kick in. The insurance pays for costs like others’ medical bills and your own legal expenses  (up to your policy’s limits).

For example, if a customer trips over a cord in your store and breaks their arm, the general liability portion of your small business insurance can pay for their medical costs and your legal expenses if you’re sued.

Do you need business liability insurance for an LLC?

There are several reasons why an LLC needs small business insurance . While forming a limited liability company is one way to separate your personal assets from your business, an expensive lawsuit could put you out of business.

Business liability insurance covers your LLC for claims about accidental property damage, injuries to others, reputational harm, copyright infringement and advertising injury. Without business liability insurance, your LLC would have to pay the hefty costs of a legal defense, judgments and settlements.

Does general liability cover theft?

General liability insurance does not cover theft. If you want coverage for stolen business equipment, like computers, tools and equipment, you’ll need a commercial property insurance policy. A property insurance policy also covers damage from problems such as fire, severe weather and vandalism.

• Best Commercial Auto Insurance Companies
• Types Of Small Business Insurance
• How Workers Compensation Insurance Works
• How To Get Cheap Business Insurance

With over a decade of experience as a personal finance writer, Jackie Lam simplifies complex financial topics for consumers who want to improve their financial situations, develop a healthy relationship with money, and work toward their goals. Her work has been featured by Fortune 500 companies, fintech startups and national personal finance brands such as Business Insider.