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How LLC Insurance Can Protect Your Business

June 07, 2024 | Insurance 101

This article was originally published September 22, 2023

All businesses face financial risks, and that includes LLCs. Does an LLC need insurance? Yes, it does. 

The fact that you operate as a limited liability company doesn’t make the business immune from lawsuits. Although limited liability companies offer some protection from individual liability, your time and investment into the LLC could be at risk from lawsuits or unexpected property damage.  

LLCs, like all businesses, face various risks. That’s why prudent business owners purchase LLC insurance. If you don’t have adequate coverage, you must pay the costs associated with lawsuits and losses from your company’s savings or revenue. Sadly, it’s not uncommon for LLCs with no insurance or inadequate coverage to experience financial hardships or go bankrupt due to significant unexpected expenses. 

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Small Business Insurance for an LLC: Needed in Many Industries

Small business insurance is essential for LLCs in nearly every industry imaginable, including:

  • Bakeries
  • Accounting firms
  • Cleaning companies
  • Home inspectors
  • Auto service companies 
  • Electricians
  • Hotels
  • Laundry businesses
  • Insurance agents
  • Manufacturers
  • Architects
  • Consultants
  • Contractors
  • Pet service companies
  • Liquor stores
  • Photographers and videographers
  • Financial advisors
  • IT experts
  • Restaurants
  • And many more

7 Kinds of LLC Insurance You Might Need

LLC insurance is a type of business insurance. It’s sold as separate policies covering different risks.

For example, virtually every business can benefit from a general liability policy. It covers a wide variety of risks that can result in lawsuits. You’ve probably heard of what’s called a slip-and-fall accident. A client/customer, delivery person, or other non-employee falls at your place of work, is injured, and sues you for their medical expenses. A general liability insurance policy can pay those costs.

However, you might not require other policies. For instance, if your business doesn’t own or lease vehicles, you don’t need a commercial auto policy.

The great thing about this only-what-you-need approach to LLC insurance is that it helps you save money by getting only necessary or required coverage (like workers’ comp, for example, for most companies with employees).

The seven types of LLC insurance policies we offer are:

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    General Liability Insurance. LLC general liability insurance covers several risks, including injuries to people who don’t work for you and damage to other people's property caused by you or your employees. It can also pay costs related to libel, slander, and copyright infringement, such as in your ads if you advertise. Plus, you can get endorsements to customize your policy, including contractors installation, tools & equipment, cyber, hired and non-owned auto liability, employment-related practices liability, and employee benefits liability. 
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    Workers' Compensation Insurance. Most states require this insurance for nearly every company with employees. It helps protect your business and employees if a worker is injured, contracts an illness, or dies due to an incident on the job. It can cover medical costs, legal fees, and lost wages due to the injury.
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    Commercial Auto Insurance. If your LLC owns or leases vehicles, this policy protects the business from potential exposure arising from accidents. It can cover your legal fees and the medical costs of others if you or your employee is at fault in an accident in your vehicle. It can pay for damages even if the vehicle is used for personal activities outside its primary business use.
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    Errors and omissions insurance. Also called professional liability insurance, an E&O policy can protect your LLC from the cost of damages and legal fees if someone claims you made a mistake or failed to perform a service and, as a result, caused them financial harm. 
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    Business Owners Policy. This is also called property & liability insurance. A business owners policy (BOP) combines general liability insurance with protection for the property you need to operate your business. It can also pay for lost income due to a covered event. As with a general liability policy, you can tailor your BOP with add-ons, including contractors installation, tools & equipment, cyber, hired and non-owned auto liability, employment-related practices liability, and employee benefits liability. 
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    Umbrella Insurance. Every liability insurance policy has a maximum it will pay in the event of an incident, with your LLC being responsible for any amount over that figure. Umbrella insurance provides additional protection, potentially covering costs that exceed the limit of another biBERK liability policy up to its own limit.  
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    Cyber Insurance. You can purchase this coverage as an add-on to a BOP, professional liability, or general liability policy. It helps cover costs related to system hacks or security breaches where sensitive data, like client credit card information, has been stolen and fraud has occurred or there is a reasonable expectation that it might happen.

You can get more information on the policies above in a few ways. One is to read about them on our website. Even if you don’t need a particular coverage today, it’s a good idea to learn about what’s available in case your requirements change. You can also talk with one of our licensed insurance experts. They’re happy to answer your questions. For instance, if you think you should buy insurance for your LLC but need clarification on the appropriate policies, they can help you decide.

What Does Liability Insurance for an LLC Cost?

The premiums for liability insurance for LLCs vary based on several factors: the type of work you do, the size of your operation, your claims history, and others. But you can quickly find out what you’ll pay with instant, self-service LLC insurance quotes on our website.

Typically, you can buy a policy with hundreds of thousands of dollars in coverage for as little as a few hundred dollars annually. And whichever policies you purchase, you’ll get significant savings over buying from most other providers. That’s because biBERK sells directly to you without brokers or other intermediaries. As a result, you can save up to 20% on your LLC business insurance.

LLC owners also trust us for business insurance because we’re part of the Berkshire Hathaway Insurance Group. We have the financial resources to pay approved claims fully and promptly. In addition, as a company, we’ve proven over several decades that we’ll be there for business owners in a wide variety of industries should they be sued or suffer property damage.

Don’t Wait Another Day to Purchase LLC Insurance!

You may have structured your business to create limited liability, but insurance for your LLC is still essential. That being said, as an LLC owner, you’re undoubtedly busy. Researching and buying business insurance is just one item on what’s likely an ever-growing to-do list. That’s why we make your insurance-buying experience streamlined and stress-free.

We enable you to purchase policies online, with coverage active as soon as the next day in most cases. You can also manage your policies and report claims online for maximum convenience.

After taking a few minutes to purchase policies from biBERK, you can turn your attention back to operating your LLC. And you can relax, knowing you’ve done the right thing for your business by obtaining proper insurance.

Check out our LLC insurance policies today and get covered!