If you’ve recently formed an LLC—whether you’re a one-person service business, a Main Street shop, or a fast-growing local company—you might be wondering what business insurance you actually need. The short answer: it depends on what you do, what you own, and who you serve.
The longer answer? Let’s break it down in a way that’s simple and easy to act on.
The Essential Insurance Most LLCs Need
1. General Liability Insurance (Most LLCs Need This First)
This protects your business if someone claims you caused property damage, bodily injury, or personal injury (like libel or slander).
Who needs it: Nearly every LLC — from professional service providers to brick-and-mortar shops.
Why it matters: LLCs protect your personal assets, but not your business assets. General liability is your foundational layer of protection.
2. Property Insurance (If You Have a Space, Equipment, or Inventory)
Whether you rent a small office or run a retail shop, property insurance covers the things your business owns.
Commonly covered: buildings, laptops, tools, inventory, signage, furniture.
Tip: Even home-based LLCs often need this (your homeowners policy won’t cover business property).
3. Business Owner’s Policy (BOP) (A Bundle That Saves Money)
A BOP combines general liability + property insurance into one simplified package.
Who should consider a BOP:
- Retail shops
- Cafés and restaurants
- Salons and service providers
- Small professional offices
It’s often more affordable than buying each policy separately.
4. Workers’ Compensation Insurance (Required If You Have Employees)
If your LLC has employees—even part-time—you may be legally required to carry workers comp.
It covers: medical bills, lost wages, disability, and more if an employee is injured on the job.
Note: Some LLCs elect to cover owners too, depending on risk level.
5. Professional Liability / Errors & Omissions (If You Give Advice or Provide a Service)
For consultants, therapists, designers, accountants, coaches, and other professional service providers.
Covers: mistakes, missed deadlines, negligence claims, or work that didn’t meet expectations.
In the age of online businesses and digital services, this is becoming a “must-have.”
6. Commercial Auto (If You Drive for Business)
Personal auto insurance almost never covers business use.
Needed for: deliveries, transporting equipment, client travel, contractor work, or any regular work-related driving.
7. Cyber Liability Insurance (If You Store Customer Data or Run Online Systems)
Cyber incidents hit small businesses hardest.
Protects against: data breaches, ransomware, phishing losses, recovery costs.
Even small LLCs that collect emails, payments, or client information benefit from this.
How Do I Know Which Policies My LLC Needs?
Ask yourself these questions:
- Do customers visit your location?
→ You likely need General Liability. - Do you own property, tools, or inventory?
→ You may need Property Insurance or a BOP. - Do you give professional advice?
→ Professional Liability may be essential. - Do you drive for business?
→ Commercial Auto. - Do you handle customer data online?
→ Cyber Liability. - Do you have employees?
→ You may be legally required to have Workers Comp.
Does Forming an LLC Replace the Need for Business Insurance?
No—an LLC protects your personal assets.
Insurance protects your business assets, income, reputation, and operations. Both work together to create a strong safety net.
Bottom Line: Most LLCs Need a Core Set of Policies
For many small businesses, the right combination looks like:
- General Liability
- BOP (liability + property)
- Workers Comp (if you have employees)
- Professional Liability (if you offer services)
- Commercial Auto or Cyber (if applicable)
Every business is unique, so the best next step is to talk with a local agent who understands your industry and how LLCs operate in North Carolina.