Protecting Your Small Business: The 3 Main Types Of Insurance You Need

  • John A. Osborne
  • Jan 23, 2023
Small Business Insurance Arkansas

As a small business owner, you’ve invested time, money, and effort into building your company. But what happens when unexpected events arise that threaten your bottom line? That’s where insurance comes in. Insurance helps protect your business from financial losses due to accidents, lawsuits, and other unforeseen circumstances. But with so many types of insurance available, it can be overwhelming to determine which policies your business really needs. In this article, we’ll explore the three main types of insurance most small businesses require to stay financially secure.

1. General Liability Insurance

General liability insurance is one of the most important types of insurance for small businesses. It provides coverage for third-party claims of bodily injury, property damage, and advertising injury (such as libel or slander). For example, if a customer slips and falls in your store and sues you for medical expenses, general liability insurance can help cover those costs. Even if you don’t have a physical storefront, general liability insurance is still crucial, as it can protect you from lawsuits related to your products or services.

Some key things to know about general liability insurance:

  • Most policies cover legal fees and settlements up to the policy limit.
  • Premiums are based on your business’s risk level (i.e. how likely it is that someone will file a claim against you).
  • It’s important to review your policy regularly to ensure you have adequate coverage for your business’s needs.

2. Property Insurance

Property insurance covers damage to your business’s physical assets, such as your building, equipment, and inventory. It can also cover losses due to theft, fire, or other disasters. If you own or lease a commercial property, property insurance is typically required by your landlord or lender. Even if you work from home, property insurance is still important for protecting your business assets.

Here are a few things to keep in mind when considering property insurance:

  • Make sure you have enough coverage to replace all of your business’s assets in the event of a total loss.
  • Consider adding endorsements to your policy for specific types of coverage, such as flood or earthquake insurance.
  • It’s important to document your assets and keep an up-to-date inventory in case you need to file a claim.

3. Workers’ Compensation Insurance

If you have employees, workers’ compensation insurance is typically required by law. This type of insurance provides coverage for medical expenses and lost wages if an employee is injured or becomes ill on the job. Even if your state doesn’t require workers’ compensation insurance, it’s still a good idea to have it to protect your business from lawsuits related to workplace injuries or illnesses.

Here are some important things to know about workers’ compensation insurance:

  • Premiums are based on your business’s industry, payroll, and claims history.
  • Make sure to follow all safety regulations and procedures to minimize the risk of workplace injuries.
  • It’s important to report workplace injuries to your insurance carrier promptly to ensure your employees receive the care they need.


While there are many other types of insurance that may be relevant to your business (such as cyber liability or professional liability insurance), general liability, property, and workers’ compensation insurance are the three main types that most small businesses need to protect themselves from common risks. By investing in the right insurance coverage, you can help safeguard your business’s future and give yourself peace of mind.

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