Sole proprietor business insurance protects you against lawsuits, like when a customer gets injured in your shop and sues you. Every year, businesses spend an average of $1.2 million fighting lawsuits.
Ideally, your sole proprietor insurance gives you quality protection at a fair price. To help you find the best business insurance for sole proprietors, we reviewed eight of the most popular insurers across the following categories: Average quoted premiums on Insureon.com (35%-40%) and the rate at which a company gave a quote when businesses applied for insurance on Insureon (30%-35%). We also reviewed each company’s complaint index from the National Association of Insurance Commissioners (NAIC) (15%), and its financial strength information from credit ratings firm AM Best (15%).
Best for General Liability Policies : USLI
- Lower average quoted premiums for general liability
- High quote approval rate for general liability
- A++ (Superior) financial strength rating
- Higher-risk or hazardous businesses may need to look elsewhere
- Online quote system is not well organized
USLI’s NAIC complaint index is less than the expected number of complaints for its size.
- Average overall premium: $655
- General liability only: $614
- BOP only: $412
- Special events
- Liquor liability
Best for Workers' Comp : CNA
- Sells workers’ compensation to sole proprietors
- Offers workplace safety and risk management programs
- High policy quote rate
- Higher quoted premiums for general liability
- Only an A (Excellent) AM Best rating
CNA offers workers’ compensation insurance for companies of all sizes, including sole proprietorships. Its policies include access to workplace safety and risk management programs and classes, too. Additionally, the company's NAIC complaint index indicates that they receive fewer complaints than expected.
While CNA’s workers’ comp policies score well, the company may not be a good fit if you want to save money while growing your business. Its general liability policies had high average quoted premiums.- Average overall premium: $1,048
- General liability: $1,483
- BOP: $500
- Cyber insurance
Best for BOP Policies : Travelers
- Low average quoted premiums for a BOP
- Low NAIC complaint indexes for a company of its size
- A++ (Superior) AM Best rating
- High average quoted premiums for general liability
Travelers has been in the insurance business since 1864. The company sells excellent BOP policies that include liability, property, and business interruption coverage. Travelers charges a low premium for this coverage and has a 100% quote-provided rate through Insureon.
Travelers also has low NAIC complaint indexes, indicating customers don't often have issues with its sole proprietor business insurance. The company has an A++ (Superior) AM Best rating. It’s one of the largest and most stable insurers around.
- Average overall premium: $3,439
- General liability: $2,075
- BOP: $250
- Commercial auto
- Worker’s compensation
Best for Low Average General Liability Premiums : Hiscox
- Low premiums for general liability
- Low average overall premiums for sole proprietor insurance
- Provides online quotes and electronic documents
- Worst NAIC complaint index for general liability among researched companies
- Lower quote rates versus other sole proprietor insurance options
Hiscox had the highest NAIC complaint index of all the companies we analyzed for commercial liability insurance, receiving about four times higher than the expected number of complaints for this category in 2022. Furthermore, the company's overall complaint index indicates that they received slightly more complaints than expected. However, these issues could be worth dealing with in exchange for Hiscox’s low premiums.
- Average overall premium: $910
- General liability: $405
- BOP: $503
- Professional liability
- Workers compensation
Final Verdict
If you want sole proprietor business insurance, all the companies in this roundup stood out as quality options. The right fit depends on the type of coverage you want and your budget. USLI was the best overall option for general liability protection, while Hiscox offered the lowest-cost policies for general liability.
For a BOP policy, Travelers was best because of its competitively priced policies and high rate of providing quotes to people who request them. If you hire employees for your sole proprietorship, CNA offers competitive premiums for workers’ compensation insurance.Frequently Asked Questions
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Can a Sole Proprietor Get Business Insurance?
Yes, a sole proprietor can get business insurance. Sole proprietors can buy the same types of insurance available to other larger businesses, like liability, commercial auto, and business interruption insurance.
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Can a Sole Proprietor Get Workers' Comp Insurance?
Yes, a sole proprietor can get workers’ comp insurance to protect employees against workplace injuries. Most states require a sole proprietor with one or more employees to have workers’ compensation insurance.
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Do Sole Proprietors Need Business Insurance?
Yes, sole proprietors need business insurance to protect against legal liability. Even straightforward one-person businesses could get sued for their work. If a sole proprietor hires employees, they also need workers’ comp insurance. And if a sole proprietor drives a vehicle for work, they need commercial auto insurance.
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How Much Does Sole Proprietor Insurance Cost?
On average, sole proprietor insurance costs $42 per month for general liability, $61 per month for professional liability, and $45 per month for workers’ compensation insurance, according to data from Insureon. What your policy will cost depends on the insurance company, business type, income, and policy limits. It also depends on what insurance company you work with. However, these aren’t the only costs. You could also owe out-of-pocket for deductibles when you file a claim. Generally, the lower your monthly premium cost, the more you could owe out-of-pocket for a claim.
Methodology
For this review, we used Insureon data for general liability, and BOP policy and workers’ compensation policies (if available) for eight insurers. Finally, we scored each insurer across the following categories:Quoted Premiums (35%-40%)
We reviewed the average quoted premiums companies gave sole proprietors over the past seven months on Insureon. Not every insurer provided quotes for workers’ compensation insurance.Quote Rate (30%-35%)
Whenever a business owner submits an application to get a quote for sole proprietor business insurance, it’s not a guarantee that they’ll get a quote from every company on Insureon’s platform. Companies that provided quotes at a higher rate received higher scores.NAIC Index (15%)
The National Association of Insurance Commissioners (NAIC) tracks how many complaints insurance companies receive for each type of insurance relative to the company’s size and the market. The NAIC then creates an index showing whether an insurer gets more or fewer complaints than expected for a company of its size. We used this to measure customer satisfaction and gave insurers with lower NAIC indexes a better score.
AM Best Rating (15%)
AM Best is a credit rating agency. It gives insurers a letter grade showing their financial strength. We gave a higher score to insurers with higher AM Best ratings, as a higher rating indicates more financial stability in the near future.