What to Ask Before Buying Business Insurance

Business insurance is essential for protecting your company from financial loss, legal risk, property damage, and unexpected disruptions. But with so many coverage options, exclusions, and industry-specific policies, many business owners aren’t sure what questions they should ask before committing to a policy.

Asking the right questions ensures your business gets the proper protection without overpaying—or worse, leaving major gaps in coverage. Use this guide to learn what to ask before buying business insurance and how each question helps safeguard your company.

1. What Types of Coverage Does My Business Need?

Not every business needs the same coverage. Your industry, size, operations, and risk level determine your insurance requirements.

Ask:

• What types of business insurance are essential for my industry?
• Do I need general liability, professional liability, or both?
• Should I add commercial property, business interruption, or cyber liability?
• Are there state or industry-specific requirements?

An insurer should be able to explain exactly which coverages apply to your operations.

2. How Are My Coverage Limits Determined?

Coverage limits decide how much protection you have when a claim happens.

Ask:

• What limits do you recommend for my business?
• Are the limits per occurrence or annual aggregate?
• Are there sub-limits for equipment, inventory, or certain risks?

Selecting limits that are too low can leave your business financially vulnerable.

3. What Does General Liability Insurance Cover?

General liability is one of the most common business policies.

Ask:

• What incidents does my general liability policy cover?
• Does it cover property damage, bodily injury, and advertising injury?
• Does it include product liability?

Understanding your base protection helps identify potential gaps.

4. Does My Business Need Professional Liability Insurance?

Professional liability—also called Errors & Omissions (E&O)—covers mistakes, negligence, and service-related claims.

Ask:

• Does my business need E&O coverage?
• What types of errors or claims are included?
• Are defense costs covered?

Service-based businesses almost always need this coverage.

5. What Property Does Commercial Property Insurance Cover?

Commercial property insurance covers your physical assets.

Ask:

• Does this policy cover my building, equipment, and inventory?
• Are outdoor signs or fencing included?
• How is property value calculated—replacement cost or actual cash value?
• Does it cover rented or off-site equipment?

Replacement cost generally provides stronger protection than actual cash value.

6. Do I Need Business Interruption Insurance?

Business interruption coverage replaces lost income if your business is forced to close due to a covered loss.

Ask:

• Does this policy include business interruption?
• How is lost income calculated?
• What expenses are reimbursed?
• Is there a waiting period before coverage begins?

This coverage can be the difference between reopening and closing permanently.

7. Are Natural Disasters or Catastrophic Events Covered?

Standard policies often exclude major disasters.

Ask:

• Does my policy cover floods, earthquakes, or hurricanes?
• If not, can I purchase separate coverage?
• Are wildfires considered covered events?

Understanding what disasters are excluded helps you prepare properly.

8. How Are Claims Processed?

A policy is only as good as the insurer’s claims process.

Ask:

• How do I file a claim?
• How long does claim approval typically take?
• Will I work with a dedicated adjuster?
• What documentation will I need?

Knowing the claims process upfront can reduce stress during emergencies.

9. How Does My Policy Cover Employees?

Employee-related risks require special coverage.

Ask:

• Do I need workers’ compensation?
• Are employee injuries covered under general liability or a separate policy?
• Do I need employment practices liability insurance (EPLI)?
• Are contractors considered employees under this policy?

State laws may require certain coverage types depending on the number of employees.

10. Does My Business Need Commercial Auto Coverage?

If your business owns or uses vehicles, personal auto insurance likely won’t apply.

Ask:

• Are all business-owned vehicles covered?
• Are employees covered when driving personal cars for business?
• Are tools or inventory inside the vehicle covered?

Commercial auto protects your business from costly vehicle-related claims.

11. Are There Any Exclusions I Should Know About?

Every policy has exclusions—understanding them prevents claim surprises.

Ask:

• What incidents or damages are not covered?
• Are cyberattacks excluded without a cyber liability add-on?
• Are certain tools, equipment, or products excluded?

Identifying exclusions helps you determine whether additional coverage is necessary.

12. Do I Need Cyber Liability Insurance?

If your business stores customer data, processes payments, or uses digital systems, cyber insurance may be essential.

Ask:

• What does cyber liability cover?
• Are data breaches, ransomware, and phishing attacks included?
• What are the limits for notification costs and legal fees?

Cyber attacks are increasing, and many businesses overlook this coverage.

13. What Optional Endorsements Should I Consider?

Endorsements customize your policy to your specific risks.

Ask:

• Should I add equipment breakdown coverage?
• Do I need inland marine insurance for tools or items in transit?
• Should I add coverage for key employees or partners?
• Are my industry-specific risks addressed?

Endorsements ensure your policy fully matches your business model.

14. How Will My Premiums Change Over Time?

Premiums can change as your business grows.

Ask:

• Are premiums likely to increase annually?
• How do claims affect my rates?
• Will adding employees or expanding services change my coverage cost?

Understanding premium behavior helps you plan long-term expenses.

15. How Often Should I Review My Business Insurance?

Coverage needs evolve as your business changes.

Ask:

• Should I review my policy annually?
• Do I need to update my policy after major purchases or expansions?
• Will you notify me of important changes in risk or coverage?

Regular reviews ensure your coverage stays aligned with your growth.

Final Thoughts

Buying business insurance is not a one-size-fits-all decision. Asking the right questions helps tailor your policy to your company’s unique risks, operations, employees, and financial goals. With proper coverage—and a clear understanding of how your policy works—you can protect your business from costly disruptions and legal liabilities.

Smart business owners don’t just buy insurance—they ask the right questions first.