Every business has inherent risks. Protecting your investments with insurance should be a top priority for every small business owner.

New types of insurance are regularly emerging to address potentially sensitive areas, such as data risk and wireless transactions, and it’s easy to get bogged down with options as the market becomes increasingly complex.

Here’s a quick rundown of some of the essential small business insurance types:

Business owners policy

Looking for an all-in-one comprehensive policy for your business? You may want to consider a Business owner’s policy (BOP). BOP offers protection against damage to property, equipment, or technology, and cover losses due to business interruptions and even certain costs associated with claims and lawsuits. The policy can be tailored to your business needs and is often more affordable than property and liability insurance à la carte.

Workers’ compensation

Workers’ compensation is an essential small business insurance policy. Why? Because even if workers are performing relatively low-risk tasks, it’s possible for slip-and-fall injuries or existing medical conditions to turn small incidents into big claims. If you don’t have workers’ compensation in place, you’re on the hook to pay out-of-pocket for workplace injuries.

Vehicle insurance

Do you use a vehicle for work? Do any of your employees use their own cars to conduct the tasks required for their job? Do you have any delivery vehicles? A solid commercial auto policy is increasingly necessary, particularly as the number of remote workers increase.

Most personal auto insurance policies exclude coverage if the vehicle is used primarily for business purposes. A business vehicle insurance policy covers all vehicles owned by your company or operated for business purposes.


If you store any information about clients or customers, you’re required to provide adequate protection, regardless of whether the information is stored on desktop computers, off-site servers or paper filing systems. In addition to developing a solid data-handling procedure, a data breach policy can cover you against any losses if physical documents are damaged or hackers breach your network.

Errors & omissions

Everyone makes mistakes, but when it comes to your small business, mistakes can be costly. To protect your interests and your assets it’s essential to purchase personal liability insurance, also known as errors and omissions insurance.

This type of policy covers damages caused by product or service delivery failures, attorney fees and other legal expenses. While the goal of any small business is to deliver an ideal consumer experience it’s impossible to avoid the occasional error; make sure you have the right coverage.

Small and midsized business owners deal with risk every day. Give yourself room to breathe and make sure you’re covered by essential small business insurance.

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At ADPIA we're here to answer your questions. Contact us and we can help you find the right coverage for your business.

This story originally published on SPARK (ADP.com/SPARK), a blog designed for you and your people by ADP®.