What Is LLC Insurance and Why Do You Need It?

Q: What Is LLC Insurance?

LLC insurance helps protect businesses from different liability claims, like bodily injury or property damage caused by your business, employees or products. Learn more about What Is LLC Insurance .

Q: Do I Need Business Insurance for My LLC?

It's a good idea to have business insurance for your LLC. Without insurance coverage, you'd have to pay out of pocket to cover claim costs, which may not be feasible for many small businesses. The insurance needed for small business depends on the type of small business you run and the risks it faces. Learn more about What Does What Does LLC Insurance Cover.

Quote Today

Key Takeaways

LLC insurance provides liability coverage to help protect your business from financial losses.
If your LLC provides professional services to customers or works with clients directly, you’ll likely need professional liability insurance and general liability insurance.
LLC insurance costs will vary, but insurance providers typically consider many factors, such as your claims history, number of employees, revenue and location to determine your price.

business owner happy being protected by LLC insurance

Does My LLC Need Business Insurance?

Many small businesses register as LLCs. This separates your business assets from your personal belongings. However, it doesn’t protect your business from the various risks it may face. Depending on the industry your business is in, business insurance may be necessary for your LLC.

For many limited liability companies (LLCs), having the right insurance is an essential part of running a successful business. Small business insurance for LLCs helps protect your company from claims that can come up during normal operations.

Without insurance coverage, you’d have to pay out of pocket to cover claim costs, which may not be feasible for many small businesses. The insurance needed for small businesses depends on the type of business you run and the risks it faces.

Be aware that LLCs may be required to have certain types of business insurance. For example, most states require businesses with employees to have workers’ compensation insurance.

If your small business provides professional services to customers or clients, you can be at risk of a liability claim. Certain types of business insurance for LLCs, like professional liability insurance, can help:

Protect your business’ property and possessions
Lessen the risk to your personal assets
Cover legal costs if a customer or competitor sues you

What Does LLC Insurance Cover?

LLC insurance from The Hartford provides liability coverage to help protect your business from financial losses. You may want to consider two important types of coverage: professional liability and general liability insurance.

Important:

While an LLC separates your personal belongings and business assets, it doesn’t protect your business from everyday risks.

Professional Liability Insurance for LLCs

As a small business owner, you try hard to keep your customers happy. Unfortunately, mistakes can happen. Our professional liability insurance helps protect you and your LLC if a customer sues you for making a mistake in the professional services given. This insurance is also known as errors and omissions coverage, or E&O coverage.

Let’s say you own an accounting firm and one of your accountants makes a clerical error. The mistake causes your client to pay thousands of dollars in fees, so they sue your business. Professional liability insurance can help cover your legal costs related to their claim.

General Liability Insurance for LLCs

General liability insurance, also known as business liability insurance, can help protect you from claims that your LLC caused bodily injuries or damaged someone else’s property. Liability claims related to work done away from your business location may also be covered under products-completed operations coverage.

If a customer trips over a loose wire at your business and breaks their wrist, general liability insurance can help cover their medical expenses. Without it, you or your business would have to pay out of pocket for their medical bills.

This insurance can also help cover claims of personal injury. If a third-party sues your business for libel or slander, this coverage can help pay for your defense costs and settlements.

General liability insurance isn’t typically required by law. However, it’s still good to have because it helps protect your business. These kinds of liability claims can happen during everyday operations, so it’s essential that you have general liability insurance coverage to help protect your business.

Additional Coverages To Consider With LLC Business Insurance

When it comes to insurance for small business, LLCs may also choose to get more coverage to protect against other liabilities, including:

Workers’ compensation insurance: Most states require businesses with employees to carry workers’ compensation. It gives your employees benefits to help them recover from a work-related injury or illness.
Commercial auto insurance: This helps cover property damage or medical expenses if you or an employee gets into a car accident while driving a company-owned vehicle for work.
Business income insurance: If your business can’t open because of covered property damage, this insurance can help cover your lost income.
Commercial property insurance: This coverage helps protect your LLC’s owned or rented physical location, as well as the tools and inventory you use to operate. Commercial property insurance also provides business renters insurance for rentals.

business owner happy being protected with limited liability companies insurance

How Much Does LLC Insurance Cost?

LLC insurance costs vary. That’s because every small business is different and has unique needs. Insurance companies look at different factors to determine a business’ LLC insurance cost. This can include your:

Claims history
Number of employees
Revenue
Location

The best way to find out how much LLC insurance costs your business is to get a quote.

Get LLC Insurance From The Hartford

We’re an insurance company with more than 200 years of experience. We know every small business is unique. Our specialists can work with you to get the right type of liability coverages and make sure you’re complying with state laws. Get a quote today and see how LLC insurance from The Hartford can help protect your business.

Frequently Asked Questions About LLC Insurance

What Insurance Is Required for an LLC?

While requirements can vary, most states do require small businesses and LLCs to have certain business insurance coverages. For example, if you have any employees, you may need to carry workers’ compensation insurance. If your business uses any vehicles for business reasons, you’ll likely need commercial auto insurance coverage too. Be sure to check with your state laws to find out what your business insurance requirements are.

How Much Is $1,000,000 Liability Insurance?

On average, a $1 million liability insurance policy costs our small business owners $69 a month, or $824 a year.¹ Keep in mind that every business is different, so the $1 million liability insurance cost will vary.

What Type of Insurance Is Best for a Small Business?

Small businesses can start with a Business Owner’s Policy (BOP). This policy combines three essential types of business insurance you may need:

General liability insurance
Business property insurance
Business income insurance

You can also add additional business coverages to a BOP to fit your specific needs.

What Types of Insurance Does a Small Business Need?

Liability Insurance for Small Business

How Much Does Small Business Insurance Cost in 2024?

¹ Premium amounts presented are based on monthly premium paid by The Hartford’s Small Business customers between 1/1/22 and 9/14/23 for 12-month policies. Premium is derived from a number of factors specific to your business and may vary.

Additional disclosures below.