I just registered my business. What am I actually required to carry?
Less than you fear by law, and more than you expect by contract. Forming the LLC protects you from the business. This page is what protects the business — six coverages, what each one does, and the order to buy them in.
Business Owners Policy
General liability and property coverage in one policy, usually for less than the two apart. For most shops, offices, and service businesses, this is the right first policy.
The tradeoffA bundle is only cheaper if you need both halves. A business with no premises may not.
Commercial Liability
The slip, the damaged property, the ordinary claim. The coverage your landlord will require before you sign and your first real client will require before they pay.
The tradeoffLimits are a choice. The minimum on the lease is the floor, not the recommendation.
Commercial Auto
Required on any vehicle titled to or used by the business. Your personal auto policy almost certainly excludes business use — check the exclusion before you assume.
The tradeoffCosts more than personal auto for the same vehicle. Costs far less than a denied claim after a business-use exclusion.
Professional Liability
If you give advice or do work someone could later claim was done wrong. Consultants, contractors, designers, anyone whose product is judgment. Some licenses require it outright. TODO — confirm per license type
The tradeoffClaims-made policies cover claims filed while the policy is active — cancel it and prior work goes bare unless you buy tail coverage.
Cyber Liability
The moment you store customer data or take payments. Small businesses are targeted precisely because they are uninsured, and the notification costs alone after a breach can close one.
The tradeoffCheap relative to the exposure, and most policies require basic hygiene — backups, two-factor — to pay out. Read that clause.
Special Event
One day, one venue, one policy. The venue will require it; the caterer's policy will not cover you; and it is far cheaper bought in advance than the week before.
The tradeoffAlcohol changes the price and the requirement. Say so up front.
The order to buy it in
Required first. Then what the contract asks for.
For business owners
See what you are required to carry.
Bring the lease, or the contract you are chasing. It has an insurance clause, and it tells us in writing what you need before anyone sells you anything.