By Ela Matters Staff 
Does the saying ‘You can never have too much of a good thing’ apply to business insurance? We’d say yes.
There’s no perfect number. But there is a sweet spot. And that sweet spot comes down to knowing the essentials. Read on to find out more.
The Essentials of Business Insurance Protection
There are multiple types of cover that nearly every business needs. Whether you sell online or run a team on-site, you’ll need to start here.
General liability insurance is the basic one. This covers things like property damage or if the actions of your business cause injury or harm. And harm isn’t physical. A customer (or Karen) could argue that your marketing and advertising caused harm. This is, by far, the most essential and comprehensive policy to have. The cost is dependent on individual business risks, company size, claim history, and other factors. This insurance calculator can provide an estimate.
Professional liability insurance is for businesses offering a service or advice. If you mess up a design, forget a deadline, or give bad advice that costs someone money, this helps cover the fallout.
Commercial property insurance protects business items. If you have an office, a studio, or just gear that keeps you going, this one covers damage or theft.
Workers’ compensation insurance is not optional. It’s the law (unless you’re a registered business in Texas). It helps your staff get medical care if they’re injured doing their job (including permanent injury), covers employee education costs, and survivor benefits, and it protects you from the legal nightmare that follows if you didn’t have it.
Learning What Your Business Needs
Insurance doesn’t work if it doesn’t fit. A freelance writer won’t need the same kind of cover as someone running a food truck. You can’t just copy what someone else got.
You need to think about where the risks are.
Start with what you do every day. Do you meet clients in person? Do you store customer data? Do you ship products? Do you work in homes or on-site? Every answer opens a different door.
If you take payments online, you’ll want to look at cyber liability insurance. If you drive for work, personal car insurance might not be enough.
Don’t buy insurance because someone told you it’s what businesses get. Insurance advisors will analyze your business needs and risks and suggest the best policies.
How Much Is Too Much?
Some people think more is safer. Others think less is more. Both can be wrong.
If you get the bare minimum just to tick a box, you’re risking your business. Do you have the spare cash flow for one accident, one claim, or one moment of bad luck? Cheap policies often come with tiny limits and too many exclusions. That’s not protection. That’s paperwork.
But on the flip side, overinsuring can kill your cash flow. Paying for cover you’ll never use won’t make your business stronger. It just makes your accountant confused. Bigger policies come with bigger premiums. If the coverage is irrelevant to what you actually do, you’re giving your money away.
What you want is enough coverage to cover your worst day, but not so much that you can’t afford your best one.
A good starting point? $1 million in general liability is standard for most small businesses. It might sound high, but lawsuits aren’t cheap. For professional liability, start with $500,000 and scale from there depending on the size of your contracts. For property, ensure the cost to replace your items, not what you paid when you bought them secondhand three years ago.
You can also talk to a broker who actually listens. Not someone who sells the same bundle to everyone.
Don’t guess. Don’t just ask Reddit. Don’t blindly trust the cheapest quote that pops up online. Use tools, compare plans, ask questions, and make sure every dollar you spend on insurance has a purpose.
When insurance works well, you forget it exists.