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Insurance for Small Businesses in CA: What You Need to Know

California Small business insurance

Insurance for Small Businesses in CA: What You Need to Know

Owning a business in California poses many of the same risks in other states, except it can be much more expensive. Unless it has secured the right business insurance, litigation can drain a small enterprise of its capital. Here’s a look at different types of insurance coverages that you should consider for your small business in CA.

Who Needs Small Business Insurance in California?

Most medium to large companies need customized endorsements to a standard business insurance policy. Small businesses with less than 100 employees and annual income under $5 million still need insurance, but not the same amount of coverage unless it specializes in a complex niche with multiple risks. Certain freelancers and independent contractors need specialized insurance to work with other firms and subcontractors.

Must-Have Insurance Lines for California Businesses

There are various California small business insurance types to choose from, depending on the size and risks associated with your company. Here are the most common types of business insurance in the state:

  • General Liability – Most businesses carry this coverage because of its broad scope in paying for legal and court fees. Unless you’ve developed a huge savings account, general liability should be a top consideration because it acts as a safety net against lawsuits that get into the millions. Even owners of home-based businesses can benefit from this coverage, especially if you market your expertise to other firms. Business general liability is useful if you have a website and publish information about other companies, which can lead to a lawsuit. The coverage also pays for lawsuits involving visitors suffering injuries on your property.
  • Commercial Property Insurance – Like homeowners insurance, commercial property insurance protects the value of structures and the contents within them. It’s essential if you own commercial real estate and you use it to store expensive machinery. Warehouses that store inventory definitely need this coverage. It pays for natural disasters that destroy an establishment, and the possessions kept on the property. Theft and vandalism are also covered. You will need to provide your insurer with an inventory list of possessions, some of which may require an appraisal by the insurance agency.
  • Business Interruption Insurance – If your business is unable to operate, this coverage covers lost income. Many California companies shut down during the pandemic or face an uncertain future due to climate change, labor shortages, and supply chain slowdowns. These factors have created significant challenges for small businesses, especially those fighting for business survival. Business interruption insurance is particularly helpful when a company temporarily shuts down due to a fire and must rebuild for several months.

Many small companies choose a Business Owner’s Policy (BOP), which bundles general liability and commercial property coverage. A BOP plan usually costs less compared to getting each policy separately.

Should Small Business Owners Be Scared?

No small business owner needs to be scared unless they have no insurance and conduct risky business. All business owners need to be concerned if they carry the right type of insurance to protect their company. No one can predict accidents or other disasters in the future, so it’s a good idea to develop some type of financial safety net, which is what insurance provides.

Understanding the variety of California small business insurance types can be complicated, which is why it’s helpful to talk with insurance experts about your options. Contact the experts at Remland Insurance Services Inc. in Orange, California, to learn more about how your business can benefit from the appropriate coverage. We can help you assess the insurance plan that works best for your business needs.


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