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Insurance is one of those things new business owners buy at the last minute, usually because a landlord or a client demanded proof of it. Buying it before you open, in the right order, costs less and avoids the scramble. Here is the checklist, in the order that matters.
1. General liability, before you sign anything
Get general liability first. Almost every commercial lease requires it, most vendor and client contracts require it, and it is the policy you will be asked to prove most often. The standard $1 million per occurrence / $2 million aggregate policy runs a median of about $45 a month for small businesses. Buy it before you sign the lease so the certificate is ready when the landlord asks. Landlords routinely require being named as an additional insured, which your agent can add in minutes.
2. Professional liability, if you sell expertise
If your business delivers advice, designs, code, financial services, or any professional deliverable, add errors and omissions coverage before you take your first client. Client contracts in service industries frequently require it, and the claims it covers are explicitly excluded from general liability. Median cost runs roughly $60 to $88 a month. Our GL vs professional liability guide explains the difference if you are unsure which you need.
3. A business owner’s policy, if you have a space or stuff
If you lease a location or own meaningful equipment, inventory, or furniture, a business owner’s policy bundles general liability with commercial property and often business interruption coverage, usually for less than buying them separately. The median BOP runs about $83 a month. Renters of commercial space sometimes assume the landlord’s insurance covers their belongings. It does not. See our BOP cost and coverage guide.
4. Workers’ compensation, before your first hire
Workers comp is legally required in 49 states once you have employees (Texas is the exception), and in most states that means your very first hire, including part-time and seasonal workers. Buy it before the employee starts, not after. The policy is priced per $100 of payroll by class code, so have your payroll estimates and job descriptions ready. Operating without required coverage can mean fines, stop-work orders, and in some states criminal penalties.
5. Commercial auto, if vehicles are involved
Business-owned vehicles need commercial auto in most states. If employees drive their own cars on company errands, add hired and non-owned auto coverage, which typically costs only $80 to $220 a year and closes a gap neither personal nor business auto policies cover on their own. Our HNOA explainer has the details.
6. Cyber liability, if you touch customer data
If you take card payments, store customer records, or hold login credentials, price cyber liability before launch. The median small-business premium is about $140 a month, and a single breach can cost far more than years of premiums. Payment processors and some B2B clients now ask about it in vendor questionnaires.
7. Licenses, bonds, and specialty lines
Some businesses need more than insurance. Contractors often need surety bonds to bid on jobs, which are not insurance but a guarantee of performance. Restaurants and bars may need liquor liability. Businesses with company officers or outside investors should look at directors and officers coverage. Check your state licensing board and your industry’s standard contracts for requirements specific to your trade. Our guide to surety bonds vs insurance explains the bond side.
8. Get your certificates ready
Once the policies are bound, ask your agent for certificates of insurance for each policy, and keep digital copies where you can send them on short notice. Clients, landlords, and vendors will ask for certificates of insurance throughout the life of the business. Having them ready before opening day means you never lose a deal waiting on paperwork.
The timeline
A practical sequence: get quotes 30 to 60 days before opening, bind general liability and any required professional liability before signing the lease, add property and workers comp as the space and staff come online, and review the whole program with your agent at the 90-day mark when you know your actual revenue and payroll. Insurance bought in the right order is cheaper than insurance bought in a panic, and it is one fewer thing competing for your attention in the first chaotic months.
