Businesses in California need to have some type of insurance; there's no way around it. Whether you have properties, vehicles, or employees, having the necessary insurance to keep your assets safe is essential.
That said, there are many factors to consider when it comes to insurance. Examples include the type of coverage, how much coverage you need, and the best insurance provider.
Cost is also important when it comes to business insurance in California. The cheapest business insurance tends to be general liability insurance or professional liability insurance. However, it depends on how much coverage you need.
While there are many questions about business insurance to answer, you’re in the best place to find the answers you're looking for. Read on to learn more about your business insurance options in California.
Business Insurance California
Contents
California Small Business Insurance Requirements
California doesn’t have too many business insurance requirements. If you operate a business that has employees, you most likely have to have workers’ compensation insurance.
If you drive any vehicles, you may also need commercial automotive insurance. This differs from traditional automotive insurance for personal vehicles, but it’s the same principle, just for work-related vehicles.
Employers also have to offer health insurance if they have more than 50 employees. Not only is this a state law, but this is a federal insurance requirement as well.
General liability and some other insurance options might also be required in some industries, so it’s important to consult with the California Secretary of State before making any insurance decisions.
Types of Business Insurance in California
We wish there were one giant blanket coverage option for businesses in California. Unfortunately, that’s not how business insurance in California works. Instead, you have to get the appropriate type of coverage for your business. This can range from general liability to something more complex like commercial property insurance.
You may be wondering what type of business insurance is required in California. The answer is, unfortunately, it depends on your business. There are also more niche insurance options that you might need, but this also depends on your company, and you’ll have to check with the state for more information on that.
Learn more about the types of business insurance in California.
General Liability Insurance
General liability insurance is one of the most common types of insurance that you’ll need in California. You may also know it as business liability insurance or commercial general liability insurance, so it’s not always referenced as general liability insurance.
Regardless, general liability coverage is important for businesses in California because most landlords will require proof of it before you rent with them. Furthermore, clients may want to see that you have liability protections in place before they contract with you for work.
General liability insurance covers you from liabilities, including accidents, some lawsuits, and other minor claims against your business.
Business Health Insurance
According to the California Department of Insurance, businesses with more than 50 employees have to offer health insurance. The employer covers some of the cost, and employees who opt into coverage have to pay the rest of the cost.
While large companies are required by law to offer health insurance, smaller businesses can also offer health insurance. Not only is it tax deductible, but offering insurance for your employees is a great way to keep them happy.
Plenty of small business health insurance options are available in California, and we recommend checking out a few options, even if you have less than 50 employees.
Workers’ Compensation Insurance
Workers’ compensation is a big one in California. In fact, if you have employees, the state of California will likely require you to have this insurance. Its purpose is to protect workers who get injured on the job.
For example, if someone breaks their leg in a warehouse forklift accident, workers’ comp insurance helps with their medical bills and other medical needs. Additionally, workers’ comp can even cover some of their wages as they recover, so they can heal properly without worrying about rushing back to work.
Not only is this insurance required for businesses that have employees, but it’s a good insurance option to have.
Commercial Automotive Insurance
California requires commercial automotive insurance if you plan on driving vehicles for work. Industries that have employees who need to drive around in company vehicles need this insurance to protect employees, their vehicles, and other drivers.
Commercial automotive insurance is not something you can choose to buy if you have vehicles. Since personal auto insurance won’t cover your work vehicles, this is something you need.
For this reason, your best option is to shop around for the right insurance for you.
Commercial Property Insurance
Commercial property insurance is what you’ll need if you own any commercial properties. In fact, some mortgage brokers will require you to have this insurance if you have to take out a mortgage on the property.
The primary purpose of this insurance is to cover any damages that may happen to the property. Theft, accidents, and even bad weather can result in a payout if your property gets damaged or compromised.
Professional Liability Insurance
Professional liability insurance is another common type of insurance you’ll come across in California. It’s for professionals and protects you from any mistakes that might be made. For example, if a freelancer makes a mistake that ends up costing the client money, professional liability insurance can cover some of the damages.
Professional liability insurance is common in professional industries for people like accountants, freelancers, insurance agents, real estate agents, and some brokers.
The Best Business Insurance California Providers
It’s no secret that some business insurance providers are better than others. Comparing rates, coverage options, and types of coverage are all important factors when you’re looking for business insurance.
We cover a handful of the best business insurance providers in California below. It’s also important to note that many of these providers are also the top business insurance companies in USA, so you can take it with you to other states when you expand.
Allstate
When you have insurance with Allstate, you really are in good hands – just like the commercials. While you probably know Allstate for their personal auto and home insurance, they also offer small business insurance in California. In fact, they’re one of the best business insurance options in the United States.
Their rates are fair, they offer insurance for businesses that are based in homes, and they cover most industries. Furthermore, Allstate provides coverage for most types of LLCs in California.
The only downside to working with Allstate is that they don’t offer workers’ compensation insurance in California.
Clear Blue Insurance
While Clear Blue Insurance doesn’t offer small business insurance directly, they do offer insurance for businesses through partner agencies. They offer all the insurance options you may need, including general liability, inland marine, employment practices, and even commercial property insurance.
Furthermore, Clear Blue Insurance is available in all 50 states, so if you end up taking your business out of California you won’t have to worry. The biggest drawback of working with Clear Blue is that you have to go through one of their partner agencies, and not them directly.
Next Business Insurance
One of the best insurance providers for independent contractors is Next Business Insurance. They’re one of the more affordable options and help you take care of the entire process from start to finish online. Quotes, rates, and much more are all available online through their website or convenient mobile app.
Next Business Insurance is also one of the more flexible choices, with plenty of plans for businesses across a wide range of industries. Plus, you can have your certificate of insurance immediately. The only drawback is that it’s a relatively new service, so not much is known about their customer satisfaction number.
Thimble
When you’re looking for business insurance in California on a budget, Thimble is a great option. Thimble offers some of the lowest premiums we’ve ever seen, with some plans costing as little as $22 per month.
Larger companies can also experience savings with Thimble because most LLCs with less than 50 employees tend to pay less than $100 per month on general liability insurance. For these reasons, Thimble is a great choice for affordable insurance you can trust.
While Thimble is affordable and provides good coverage, the only area they’re lacking in is customer support – you can only get it online.
How Much Is Insurance for a Business in California?
Business insurance varies in price based on the provider and the type of insurance. For example, a general contractor may need a basic general liability insurance policy that might cost around $1,000 per year. On the other hand, once someone has a handful of employees, that same policy can cost more than $2,000 per year.
The way insurance prices are broken down may also vary. For instance, workers’ comp in California tends to cost $1.94 per $100 of payroll, so you have to factor in the amount of payroll and employees that you have.
Health insurance also varies based on the number of employees and payroll, with the average cost ranging from $500 to $2,000 per employee.
For property and automotive insurance, you may have to shell out a bit more money. The cost of auto insurance can vary based on the value and type of vehicle, so expect to pay around $250 to $500 per month per vehicle.
When it comes to commercial property insurance, expect to pay between $500 to $5,000 annually, depending on the size and value of the property.
Business Insurance in California FAQ
Have more questions about business insurance in California? We answer the most common questions below.
What’s the Limit on General Liability Insurance in California?
The limit for a general liability insurance policy varies based on the insurance provider and what they’re willing to offer. Typically, people purchase general liability insurance with $1 million per occurrence, $2 million for product or completed operations, and $2 million in aggregate.
Some providers may offer different limits on their insurance policies, so it’s a good idea to contact them if you need a more specific coverage amount for your business.
What’s the Cheapest Business Insurance California?
Thimble tends to be the cheapest insurance option for business insurance in California. You can get affordable general liability coverage and even other insurance packages for budget-friendly prices.
Depending on your business model, you can even spend less than $100 monthly on some insurance packages. In fact, the average cost for an insurance plan for an LLC that has 20 employees is only $45 per month.
While Thimble is the cheapest option, they’re still among the best insurance providers in the state in terms of customer satisfaction.
What Is the Best General Liability Insurance in California?
When it comes to the best possible general liability insurance, our top pick is Allstate. When you work with Allstate, you really are in good hands. The company has minimal complaints, maintains good ratings, and offers a wide variety of coverage types for all types of LLCs.
Get the Business Insurance You Need in California Today!
It doesn’t matter what type of business you have in California; there’s a good chance that you can benefit from insurance in California. While the state might not force you to have insurance, it’s not something that should feel forced. Instead, the best business insurance in California will leave you feeling safe, comfortable, and confident to continue doing business.