Summary: California Small Business Insurance Ratings
Best Small Business Insurance in California 2025
Types of Business Insurance in California
If you’re shopping for small business insurance in California, you’ll want to choose coverage based on your industry and the size of your business. The common types of small business insurance include general liability insurance, professional liability insurance and workers’ compensation insurance.
California General Liability Insurance
General liability insurance covers your small business against claims of accidental injuries to others or damage to someone else’s property. It also covers advertising injury, copyright infringement and reputational harm claims. General liability insurance pays for legal costs (such as attorney fees), judgments and settlements.
California Professional Liability Insurance
Professional liability insurance pays your legal costs for claims of mistakes in your professional services, even if the claim has no merit. For example, if a client claims your tax service caused them financial harm, your professional liability insurance will cover your legal costs, judgments and settlements.
This type of insurance is also known as errors and omissions (E&O) insurance.
California Workers Compensation Insurance
Workers’ compensation insurance covers your employees’ medical bills, lost wages, and other expenses if they get injured or ill due to work-related tasks. Workers compensation insurance in California is required if your business has one or more employees. Failure to have workers compensation insurance in California is a criminal offense.
Other Types of California Business Insurance
Every small business deals with its own set of unique risks. That’s why you’ll likely need additional types of small business insurance to cover industry-specific risks. For example, you’ll want coverage for your business property, such as your inventory and equipment.
Starting with a business owners policy (BOP) can help you establish a solid foundation. A BOP bundles general liability insurance with commercial property and business income insurance. Buying a BOP is usually cheaper than buying each coverage type separately. Here’s what they cover:
- Commercial property insurance: This covers your business’s physical property (such as your building and office equipment) against theft, fire and other damages. This type of insurance is also known as business property insurance.
- Business interruption insurance: If you cannot open your small business due to a problem covered by your policy (like a fire), business interruption insurance covers your lost income.
You can add more coverage types to your BOP as needed. Here are some to consider:
- Course of construction insurance: This type of insurance covers the building and materials during a construction project. It’s also known as builder’s risk insurance.
- Commercial auto insurance: This type of insurance covers the vehicles you use for work. Your personal auto insurance policy won’t cover vehicles used for business purposes. You’ll need commercial auto insurance to cover any company vehicles, such as delivery vans and work trucks.
- Commercial umbrella insurance: This type of insurance can cover the shortfall when your liability insurance reaches its coverage limits. For example, if you have $1 million in general liability coverage but face a $1.25 million lawsuit, commercial umbrella insurance can cover the remaining $250,000.
- Cyber liability insurance: If your company faces a network breach or your data is compromised, cyber liability coverage can pay for related costs, including legal fees, data recovery costs and credit monitoring services.
- Directors and officers (D&0) liability insurance: This insurance pays out if your company’s decision-makers make a choice that leads to a lawsuit. Directors and officers liability insurance covers legal fees, settlements and other costs related to these lawsuits.
- Inland marine insurance: If you transport goods or materials on land via train or a vehicle, inland marine insurance covers property if it gets lost, damaged or stolen.
- Product liability insurance: This insurance covers lawsuits relating to damages caused by a product you sell, manufacture or distribute. Product liability insurance covers costs such as legal fees or compensation for damages.
- Technology errors and omissions insurance: This type of insurance covers legal fees and other costs if a customer makes a claim against your small tech business. Professionals who need technology errors and omissions insurance include IT consultants, web developers and computer specialists.
How to Get Business Insurance in California
Here are a few simple steps to help you get business insurance in California.
Cost of Business Insurance in California
The average cost of general liability business insurance in California is $42 per month, according to Insureon. Workers’ comp costs an average of $62 per month and professional liability insurance costs an average of $71 per month.
Your small business insurance costs will depend on several factors, including:
- Your industry.
- Number of employees.
- Annual revenue.
- Your policy limits and deductibles.
- The coverage types you choose.
How to Save on Small Business Insurance in California
Jason Metz
Insurance Lead Editor
Les Masterson
Insurance Editor
Penny Gusner
Insurance Senior Writer
Bundle your small business insurance policies
I recommend looking for opportunities to bundle small business insurance policies. For example, buying a business owners policy (BOP) combines general liability, commercial property and business interruption insurance. You can add more coverage types as necessary, such as workers’ comp and commercial auto insurance. It’s usually cheaper to bundle your policies rather than buying each coverage type separately.
Insurance Lead Editor
Get small business insurance quotes from multiple insurers
I would get quotes from multiple business insurers. Comparing rates can help you find the best coverage at the most affordable price. Make sure you’re comparing similar coverage amounts so you’re comparing policies in an apples-to-apples way.
Insurance Editor
Manage the risks that affect your small business
I recommend taking steps to manage the risks specific to your business—doing so can help you save money on your coverage. For example, installing security and fire alarms can help you qualify for discounts on your commercial property insurance. Or a workplace training program may help you save on your workers’ comp insurance.
Insurance Senior Writer
Methodology
To find the best small business insurance in California, we analyzed large California business insurance companies based on complaint 2023 data for commercial liability, commercial property insurance and commercial auto insurance. Complaint data is based on complaints upheld by state insurance departments across the country and collected by the National Association of Insurance Commissioners.
Small Business Insurance in California Frequently Asked Questions (FAQs)
Is business insurance mandatory in California?
Small businesses in California may be required to have certain types of business insurance. For example, you are required to have workers’ compensation insurance in California if your small business has one or more employees. If you use a vehicle for business-related purposes, you’re also required to have commercial auto liability insurance in California.
Your clients, landlords and licensing boards in California might also require certain types of small business insurance. For example, if you run a construction business, your client might require you to have general liability insurance.
Who regulates business insurance in California?
The California Department of Insurance regulates business insurance in California. The CDI oversees insurance companies to ensure they follow state laws and regulations. For example, the CDI is tasked with protecting consumers from excessive, inadequate or unfairly discriminatory business insurance rates. The CDI’s role also includes overseeing that insurers are solvent to pay claims, investigating and prosecuting insurance fraud, and resolving consumer complaints.
What insurance is needed for an LLC in California?
California requires LLCs to get errors and omissions (E&O) insurance to complete the registration process. The amount required is a minimum of $500,000 but the maximum amount is not required to exceed $5 million.
If your LLC has any employees, you will be required to have workers’ compensation insurance. You’ll also be required to have commercial auto liability insurance if you use a vehicle for business-related purposes.
How much is insurance for a business in California?
The average monthly cost for general liability insurance in California is $42, according to Insureon. Professional liability insurance in California costs an average of $71 per month and workers’ comp costs an average of $62 per month.
Your small business insurance costs in California will vary depending on the type of business, number of employees, revenue and the coverage types and limits you choose.
