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
Long Beach43,7314.675.04
Los Angeles497,9993.443.89
San Diego135,7542.463.59
San Francisco116,8035.244.79
San Jose77,8323.965.89
Santa Ana26,4322.564.03