How Much Business Insurance Do I Really Need?

Determining the right amount of business insurance coverage depends on several factors unique to your business. The most common coverage limits for general liability are $1 million per occurrence and $2 million aggregate, which work well for most small businesses. However, your specific needs may vary based on your industry, contract requirements, and risk exposure.

Industry Matters

Your industry plays a major role in determining coverage needs. A home-based freelance writer faces different risks than a general contractor working on construction sites. Higher-risk industries typically need higher limits. If you work with expensive equipment, handle client property, or have employees, you'll likely need more coverage. Consider the worst-case scenario—if something went wrong, how much could you potentially owe?

Contract Requirements

Contract requirements often dictate minimum coverage amounts. Many commercial landlords require tenants to carry at least $1 million in general liability coverage. Large clients and government contracts may require $2 million or more. Before signing any agreement, check the insurance requirements so you're not scrambling to increase coverage at the last minute.

Protecting Your Assets

A good rule of thumb is to carry enough coverage to protect your business assets. If your business has $500,000 in assets, equipment, and annual revenue, carrying only $300,000 in coverage leaves you exposed. Many business owners also add an umbrella policy for extra protection above their primary coverage limits—especially as their business grows.

Get Personalized Recommendations

SmartInsured helps you find the right coverage amount for your specific situation. Our AI-powered system analyzes your business profile and recommends appropriate limits based on your industry, size, and risk factors. Get a personalized quote in minutes and know you're properly protected.