California Business Insurance FAQ - Quick Answers

There are several risk factors carriers look at when rating your commercial insurance policies. Your exact premiums will have to be quoted by a professional, but it's helpful to understand what the markets are using when quoting your coverage:

  • Type of industry
  • Number of employees
  • Gross annual sales
  • Location of business
  • Number of company vehicles
  • Safety practices in place
  • Past claims reported
  • Number of years in operation

In California, you are required to carry workers' compensation insurance when you have one employee or more. You'll also have to obtain commercial car insurance at the state minimum limits or higher if you own company autos. Other policies like general liability, professional liability, commercial umbrella, and more are typically not mandated by law.

Each California small business will need different insurance to properly protect individual risks. However, most of these coverages fall under the common policies listed below:

There are a few different types of liability insurance for your small business. In California, you'll want to look at the following liability policies as they pertain to your operation:

  • General liability insurance: Pays for a bodily injury or property damage liability lawsuit brought against your operation. This is the most common liability policy you can purchase for your business.
  • Professional liability insurance: Pays for a lawsuit against your business due to negligent or harmful advice. This liability coverage is obtained by advisers, realtors, insurance agents, and financial professionals.
  •  Commercial umbrella insurance: Provides an additional limit of liability coverage over your underlying business policies. This is for extra coverage that comes in handy for larger lawsuits against your business.

In California, health insurance is required when you have 50 employees or more. If you fall into the small business category with under 50 staff members, then offering health coverage is usually optional. If you want to have health insurance as part of your employee benefits package, then a local independent insurance agent can help.

 

When you're searching for small business coverage, there are many options. In California, Nationwide, Progressive, Travelers, and Hanover insurance companies come highly rated for business protection. These carriers are known for their customer service and superior claims handling.

Do You Know What Your Business Insurance Covers in California?

Find the Best Insurance in Your City

National Business Insurance Stats

Number of businesses in the US: 30,819,176

Burglary rate per 1,000 residents in the US: 3.76

Auto theft rate per 1,000 vehicles in the US: 2.29

City No. of businessesBurglaries / 1,000 peopleAuto thefts / 1,000 cars
Anaheim29,5413.173.48
Fresno35,3345.554.44
Long Beach43,7314.675.04
Los Angeles497,9993.443.89
Oakland44,7995.9911.61
Riverside24,0463.914.47
Sacramento38,2445.825.29
San Diego135,7542.463.59
San Francisco116,8035.244.79
San Jose77,8323.965.89
Santa Ana26,4322.564.03
Stockton16,9927.045.35
  • Los Angeles, CA 
  • Business Insurance Common Coverage Options
  • Property 
  • There are many ways your Los Angeles business may sustain property loss or damage. Property crimes, like theft and arson, and severe weather events, like electrical storms, can lead to expensive losses if you do not have sufficient business insurance. You will want to be sure that your business insurance policy package includes policies that will cover specific risks like floods, landslides, earthquakes, and fires.
  • Commercial Auto 
  • Whether you are insuring a delivery van or a fleet of construction vehicles, commercial auto insurance can cover costs associated with liability risks and vehicle damage. This insurance is required for company-owned vehicles in this state. If your vehicles are driven over state lines, you will need to be sure that your policy also meets federal coverage requirements. 
  • Workers' Compensation
  • Workers' compensation insurance can cover medical bills and lost wages for workers who are injured on the job.  Rates are based on your company’s overall payroll and the potential risks faced by your employees according to their job classifications. All employers in Los Angeles are required to have this insurance.


  • San Diego, CA 
  • Business Insurance Common Coverage Options
  • Property 
  • You will want to be sure that your business policy adequately covers all of your commercial property so that if it is completely destroyed by a major disaster like a fire or an explosion, your business can easily afford to rebuild and replace it so you can get back to normal operations. Sometimes this means adding additional coverage such as inland marine insurance or boiler & machinery insurance. 
  • Commercial Auto 
  • If your business owns a vehicle or a fleet of vehicles, you will be required by state law to cover them with commercial auto insurance. Your rates will be based on several factors, including the number and types of vehicles you are covering and the risk of collisions and  vehicle theft where they will be driven.
  • Workers' Compensation
  • Workers' compensation insurance is required if your San Diego business has at least one employee. This insurance can cover medical treatment, lost wages, and other costs associated with workplace injuries. Every workplace has unique risks and hazards for its workers, which is why workers' compensation rates can vary significantly from one business to the next.


  • San Jose, CA 
  • Business Insurance Common Coverage Options
  • Property 
  • Your business has probably invested a lot in its assets such as computers, furnishings, inventory, and supplies. Commercial property insurance can help cover the cost of repairing or replacing this property if it is lost or damaged due to a covered event such as severe weather or crime. 
  • Commercial Auto 
  • Your business is required to have commercial auto insurance if it owns a vehicle or a fleet of vehicles. Rates for this coverage are based on several factors like the types of vehicles you are covering and information about the employees who will be driving them. Large trucks and construction vehicles cost more to insure than cars and cargo vans since they can cause much more damage if involved in an accident.
  • Workers' Compensation
  • Workers' compensation insurance covers the cost of medical treatment, lost wages, and other expenses related to injuries or illnesses employees suffer because of doing their jobs. It is required for all employers in California. Workers' compensation rates are assigned according to your company’s overall payroll and the types of jobs your employees do.


  • San Francisco, CA 
  • Business Insurance Common Coverage Options
  • Property
  • Having a sufficient amount of business property insurance can shield your company from losses related to hazards like accidental fires, property crimes, and severe weather events. To be covered against earthquake damage, you will need to include a commercial earthquake insurance policy in your business insurance policy package. 
  • Commercial Auto
  • If your San Francisco business owns a vehicle or fleet of vehicles, you will be required by state law to carry commercial auto insurance. This insurance can cover your company against its increased risks of expensive liability lawsuits if one of your drivers causes a collision. Rates for coverage can vary according to the number and types of vehicles you are covering, as well as the accident and vehicle theft rate in the areas where your employees will be driving.
  • Workers' Compensation
  • Workers' compensation insurance covers medical expenses and paid time off for employees who are injured on the job. If your San Francisco company has at least one employee, you are required by law to have this insurance. Rates for coverage can vary significantly from one business to the next, depending on the types of jobs your employees do and your company’s overall payroll.


  • Fresno, CA 
  • Business Insurance Common Coverage Options
  • Property
  • The crime rate in Fresno is among the highest in the state. In one recent year, around 12,500 thefts and 2,400 burglaries were reported in this city. You can shield your business from losses caused by crimes such as shoplifting, looting, and even embezzlement by your employees with the crime insurance offered in your business insurance policy.
  • Commercial Auto
  • Many businesses in Fresno have company-owned vehicles. From company cars to delivery vans to semi-trucks, if your company owns vehicles, they must be covered by a commercial auto insurance policy that meets or exceeds the state’s minimum coverage requirements. If these vehicles are used for interstate commerce, they must meet federal requirements as well. 
  • Workers' Compensation
  • Workers' compensation insurance covers medical bills and lost wages for workers who suffer occupational illnesses or are injured while doing their jobs. It is required for all California businesses that have at least one employee. Rates are assigned according to your company’s payroll and the types of jobs your workers do.