Does an LLC need business insurance?
Forming an LLC separates your personal assets from the company’s debts. It does not:
- stop customers, clients or landlords from suing the LLC itself — putting its bank account, equipment and revenue at risk;
- protect you from claims about your own negligence or professional mistakes;
- cover legal defense costs, which can be expensive even when a claim has no merit;
- satisfy contracts and leases that require proof of insurance.
That gap is what business insurance fills. Most LLCs start with general liability and add other policies as they hire, sign leases or take on bigger clients.
Types of business insurance for an LLC
| Policy | What it covers | Who needs it | Median cost |
|---|---|---|---|
| General liability | Customer injuries, property damage you cause, advertising injury (libel, copyright) | Almost every LLC that meets clients, visits sites or signs leases | $45/mo |
| Business owner’s policy (BOP) | General liability + commercial property in one discounted bundle | LLCs with an office, shop, inventory or equipment | $83/mo |
| Professional liability (E&O) | Claims that your advice or work caused a client financial loss | Consultants, agencies, accountants, IT, designers | $88/mo |
| Workers’ compensation | Employee medical bills and lost wages for work injuries | LLCs with employees (required by most states) | $54/mo |
| Cyber liability | Data breaches, ransomware, notification costs | LLCs that store customer data or take payments online | $129/mo |
| Commercial umbrella | Extra limits above your liability policies | Higher-risk work or contracts requiring high limits | $86/mo |
| Commercial property | Your building, equipment, inventory and furniture | LLCs that own or rent physical space | $108/mo |
Median monthly premiums for policies bought by Insureon’s small-business customers. Your price depends on industry, location, revenue, payroll and limits.
What insurance does your LLC need?
| Type of LLC | Typical coverage | Why |
|---|---|---|
| Consultant, coach, marketer | Professional liability + general liability | Clients can claim your advice cost them money; GL covers in-person visits. |
| Contractor or trades | General liability + workers’ comp + commercial auto + tools/equipment | Clients and general contractors usually require a certificate of insurance. |
| E-commerce seller | General liability (with product liability) + cyber | Product injury claims and stored customer data. |
| Shop, studio or office | Business owner’s policy (BOP) | Bundles liability with coverage for your space, equipment and inventory. |
| Rental property LLC | Landlord/commercial property + liability | Tenant and visitor injuries, building damage. |
| Any LLC with employees | Workers’ compensation | Required by most states once you hire. |
How much LLC insurance costs by industry
| Industry | General liability | BOP | Workers’ comp |
|---|---|---|---|
| Consulting | $29/mo | $42/mo | $40/mo |
| Technology / IT | $30/mo | $46/mo | $34/mo |
| Healthcare | $31/mo | $70/mo | $60/mo |
| Food and beverage | $44/mo | $148/mo | $106/mo |
| Cleaning | $48/mo | $76/mo | $136/mo |
| Landscaping | $51/mo | $94/mo | $169/mo |
| Installation | $73/mo | $118/mo | $193/mo |
| Construction | $82/mo | $98/mo | $254/mo |
Construction pays roughly three times what a consultant pays for general liability and six times as much for workers’ comp. Full cost breakdown by policy, industry and state →
Where to buy LLC insurance online
Two ways to buy: directly from an online insurer (fastest), or through a marketplace that compares several insurers (best for price). Both issue a certificate of insurance you can send to clients.
NEXT Insurance
General liability from $19/mo
- Buy online in about 10 minutes, coverage effective after payment
- Unlimited free certificates of insurance (COI), 24/7
- General liability from $19 a month
Watch out: Starting prices are not guaranteed
Simply Business
GL from $20.75/mo
- Compares quotes side by side from 18 carriers
- Carriers include Hiscox, Travelers, CNA, Markel and Liberty
- Certificate of insurance downloadable 24/7
Watch out: Advertised prices are the 10th percentile — most pay more
Insureon
Median GL $45/mo
- Publishes median prices from 100,000+ small-business customers
- Quotes from multiple insurers with licensed agents
- Covers a wide range of industries
Watch out: Medians — your price depends on industry, state and limits
Prices are published averages or starting prices from each insurer or broker, not quotes. Your premium depends on your industry, state, payroll, revenue and claims history. We are not an insurance agency. Verified October 18, 2026. We may earn a commission if you sign up through our links, at no cost to you. How we’re funded.
Frequently asked questions
Does an LLC need business insurance?
Usually, yes. An LLC protects your personal assets from the company’s debts, but the company’s own money and property are still exposed to lawsuits, and you can be personally liable for your own negligence or professional mistakes. Insurance pays for those claims; the LLC doesn’t.
Is business insurance required by law for an LLC?
Forming an LLC doesn’t require insurance. But most states require workers’ compensation once you have employees, vehicles used for business need commercial auto coverage, and many clients, landlords and licensing boards require general liability by contract.
How much does LLC insurance cost?
Among Insureon’s small-business customers, the median general liability policy costs $45 a month ($538 a year) and a business owner’s policy $83 a month ($990 a year). Professional liability is $88 a month. See costs by industry and state.
What insurance should a single-member LLC get?
Start with general liability if you meet clients, visit job sites or sign a commercial lease. Add professional liability if you give advice or deliver professional work. Even a one-person LLC can be sued, and the policy — not the LLC — pays legal defense costs.
Does an LLC protect me from lawsuits?
Only partly. It generally shields your personal assets from the business’s debts and from claims against the business. It doesn’t stop the LLC itself from being sued, doesn’t protect against your own wrongful acts, and courts can disregard it if business and personal finances are mixed.
Where can I get LLC insurance online?
You can buy directly from an online insurer such as NEXT (buy in about 10 minutes, free certificates) or compare quotes from many carriers through a marketplace such as Simply Business (18 carriers) or Insureon.
Your LLC setup checklist
- Get a free EINFrom the IRS, in minutes online.
- Open a business bank accountKeep LLC money apart from yours to protect the liability shield.
- Sign an operating agreementSettle who owns and decides what before it matters.
- Plan your taxesKnow your tax status and federal due dates.
- Track state deadlinesFree reminders before each filing.
Everything in one list: printable LLC compliance checklist · live deadline calendar.