Business insurance for LLCs
Recommended policies for LLCs
LLCs need insurance policies that match their state requirements and type of business. These property and liability coverages protect against common risks.
General liability insurance
This policy protects LLCs from basic risks that most small businesses face, including medical bills from slip-and-fall injuries. It's often required by client contracts and commercial leases.
- Accidental client injuries
- Accidental damage to client property
- Defamation and copyright lawsuits
Errors and omissions insurance
E&O covers the cost of lawsuits filed by clients or customers that accuse your LLC of an error or oversight. It's also called professional liability insurance.
- Undelivered services
- Accusations of professional negligence
- Mistakes in your work
Cyber liability insurance
A cyber liability policy helps LLCs recover after a cyberattack or data breach. It can also covers legal costs when an LLC is held responsible for failing to prevent a client's data breach.
- Data breach lawsuits
- Customer notification costs
- Fraud monitoring services
Business owner's policy
A BOP combines two policies at a discount: general liability insurance and commercial property insurance. Small low-risk LLCs are typically eligible.
- Accidental client injuries
- Accidental damage to client property
- Business property damage
Workers' comp insurance
Most states require LLCs with employees to purchase workers' compensation insurance. It also protects sole proprietors from work-related medical expenses that health insurance could deny.
- Medical bills for work injuries
- Disability benefits
- Legal fees from employee injuries
Professional liability insurance
This policy, also called errors and omissions insurance (E&O), protects small businesses that provide professional services or advice. It covers lawsuits related to work performance.
- Work mistakes and oversights
- Professional negligence lawsuits
- Late or incomplete work
How much does LLC insurance cost?
From our customer data, here's a quick look at the average costs of common TechInsurance policies:
E&O insurance: $61 per month
Business owner's policy: $57 per month
Workers' compensation: $45 per month
View more small business insurance costs.
Start a free application to see how much insurance will cost for your LLC.
Hear from business owners like you who purchased insurance coverage.
Bundle insurance policies to save money
LLC owners can save money on business insurance coverage with two packages common in the IT industry.
A business owner's policy (BOP) combines commercial property insurance with a general liability policy.
A general liability insurance policy is the coverage that most small business owners purchase first. It covers basic third-party (non-employee) liability claims, including bodily injury and property damage. The policy is especially beneficial for LLCs that invite the public into an office or storefront, handle delicate client equipment, or have an active social media presence (like graphic designers and advertisers).
Commercial property insurance is critical for protecting your work equipment and your building, if you own it. This policy is valuable even if you’re renting an office space or commercial unit, like a childcare center, as your landlord’s policy won’t cover your company’s belongings.
Technology errors and omissions insurance (tech E&O) combines errors and omissions insurance and cyber liability insurance.
Technology E&O insurance is crucial for LLCs in the tech industry and professional services, as it covers the cost of lawsuits over the quality of your work, including any security recommendations. It bundles errors and omissions insurance with both forms of cyber liability insurance:
First-party cyber liability insurance helps your company recover from a data breach or cyberattack. For example, if a restaurant suffers a data breach, it could covers expenses like credit monitoring services for affected customers and a cybersecurity incident investigation.
Thirty-party cyber liability insurance protects tech companies if a client sues you for failing to prevent a data breach or cyberattack at their business. If you find yourself in this kind of dispute, this covers your attorney's fees, settlement, court-ordered judgments, and other legal costs.
Chat with an insurance agent to find out more about bundles and discounts.
What are the advantages of an LLC?
Before you even start your company, one of the first questions you might have is how to structure your business. It's critical to know the difference between a sole proprietorship and an LLC.
A sole proprietor is someone who owns a business and is personally responsible for its profits, debts, and liabilities. With a sole proprietorship, your company:
- Does not need to register with your state
- Is responsible for lawsuits or business obligations
- Is not separated from your personal assets, meaning creditors can come after your personal belongings if your business assets cannot cover your debts
- Will disappear if you pass away or you decide to sell the company
LLCs are a more formal corporate structure for your company. With this setup, your IT company:
- Needs to file for a business classification in your state, which could cost between $50 and $500
- Has separate assets from your personal assets
- Could be viewed as less risky to lenders
- Could accept additional owners of the company
- Can continue running under an operating agreement if you pass away or separate from the company
Which insurance policies does your state require for an LLC?
Compare quotes for LLC insurance
TechInsurance helps small business owners compare business insurance quotes with one easy online application. Start an application today to find the right policy at an affordable price, and get a certificate of insurance for your LLC.