Business Insurance in Phoenix, AZ, Explained

How I help Phoenix business owners

I was first licensed in Arizona in 2001. Business owners usually call me at one of a few moments: a client contract asks for proof of coverage, a landlord wants to see liability coverage, or you’re about to hire your first employee.

Bring me what’s being asked for. I’ll go through it with you in plain words, tell you what each policy does and what to have ready, so you’re not guessing.

Illustration: a small neighborhood shop with a terracotta awning in late afternoon sun

When coverage becomes required

Four moments usually bring it up: a client contract, a lease, a license or permit, and your first employee. A contract can name any coverage it likes, so read what it actually asks for. Arizona's workers compensation law covers almost every employer with regular employees.

Commonly asked forDepends on the business and the agreementAn empty cell means the situation does not commonly ask for it.

The four most common types of commercial insurance, and one more

General liability, a business owners policy, workers compensation and commercial auto are the four most businesses meet first. Professional liability is the one more. What you need depends on what you do, your contracts and your people.

General liability

Pays when your business is blamed for hurting someone who isn’t your employee, or for damaging their property, and pays to defend you against that claim. It doesn’t cover your own property, your employees’ injuries or professional mistakes.

Business owners policy

Bundles general liability with coverage for your building and what’s in it, often with business interruption coverage too. It’s built for smaller businesses that qualify.

Workers compensation

Pays medical care and part of lost wages when an employee gets hurt on the job.

Commercial auto

Covers vehicles your business owns or uses for work. Your personal auto policy may not cover business use of a car.

Professional liability

Covers claims that your advice or professional work cost a client money. You’ll also hear it called errors and omissions.

Illustration: a contractor pickup truck with ladders parked along a stucco wall

Driving your own truck to jobs?

Tell me up front. Your personal auto policy may not cover business use, and it’s one of the first things I’ll ask about when you call.

Running the business from home

A homeowners policy is written for a household, not a business. The Insurance Information Institute notes it may cover only a small amount of business equipment, less of it away from home, and usually none of the business’s liability. The Small Business Administration lists home-based business coverage, added to a homeowners policy as a rider, for a small amount of equipment and for injuries to other people.

What a homeowners policy leaves out

Usually any claim from a customer or supplier hurt at your place, the income you lose if damage to the home stops the work, and the money you can’t collect if your business records are destroyed.

An add-on to your homeowners policy

Some insurers add property and liability coverage for a small business run from home, called an endorsement. Each insurer decides which businesses qualify, so one that fits one insurer may not fit another.

Separate policies or a package

Once you outgrow an endorsement, you can buy business property, general liability and business income coverage as separate policies, or together in a business owners policy.

A personal umbrella

An umbrella on top of your home or auto policy usually covers business activities only when those policies already do. Read how your policy defines business and business property.

Need coverage, or proof of it, for a contract, a lease or a first hire? Tell me what’s being asked for and I’ll walk you through it.

Ask Jodi a question Call (480) 228-0591

What if my business is hard to insure?

It depends on what your business does and whether an insurer will write it. Insurers set their own standards, so a business one turns down may still fit another.

Have your work, revenue, payroll and claims history ready. My license covers Property and Casualty in Arizona, the kinds of insurance a business needs, so bring me the details and I’ll tell you honestly what I see. Or call me at (480) 228-0591.

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Occurrence or claims-made: when a policy answers a claim

A liability policy answers a claim in one of two ways, and the difference matters most when you change insurers. The Texas Department of Insurance guide to general liability sets out both.

1
Retroactive date
Injury before this date is not covered
2
Policy starts
The period for reporting claims opens
3
Claim reported
Covered when reported while the policy is in force
4
Policy ends
A later claim needs run-off or prior acts coverage

Occurrence

Covers injury or damage that happens while the policy is in force, even if the claim shows up after the policy has ended.

Claims-made

Covers a claim only if it’s reported to the insurer during the policy period. Injury or damage from before the policy began is covered only if the policy has an earlier retroactive date, which usually sits on the declarations page.

Leaving a claims-made policy

When a claims-made policy ends, buy run-off coverage (also called an extended reporting period) from the old insurer, or prior acts coverage from the new one. Without either, a claim reported after the switch for work done before it can fall into a gap.

Keeping your coverage in step with your business

Tell your insurer, or the agent who placed the policy, about major purchases, an expansion, new hires or a change in the kind of work, as the Insurance Information Institute advises. Its guide for home businesses adds that if your equipment or stock has outgrown the policy when a loss happens, the limits may fall far below what you lost.

List every place your business works so each one is covered, as the Texas Department of Insurance guide to commercial property advises. Its guide to general liability adds that a growing business should review its limits and may need to raise them.

Tell the insurer about

Major purchases of equipment or stock
An expansion
New hires
A change in the kind of work
Every place the business works

Growing fast?

Call me before your renewal, not after a loss. A quick talk about what’s changed beats finding out later that your limits fell behind. (480) 228-0591

Questions business owners ask

What is the best insurance for a small business?

There’s no single best policy. Most small businesses start with general liability. A business owners policy bundles it with property coverage. Most employers with employees need workers compensation, and a contract or a lease may name other coverage.

What insurance does an LLC need?

Whatever its work calls for: general liability for claims from others, property coverage for what it owns, workers compensation once it has employees, and commercial auto if vehicles are used for work. Forming an LLC limits some personal liability, but it doesn’t insure the business.

What does a business owners policy cover?

It usually bundles general liability, property coverage for the building and business contents, and business interruption coverage for lost income after covered damage. It doesn’t usually include workers compensation, commercial auto or professional liability.

What is commercial insurance?

Commercial insurance is the general name for policies that cover a business rather than a person: liability, property, workers compensation, commercial auto and others.

Does my homeowners policy cover a business I run from home?

Usually only in part. It may cover a small amount of business equipment and usually doesn’t cover business liability, such as a customer hurt on your property. An endorsement, separate business policies or a business owners policy can fill the gap.

What happens if an insurer turns my business down?

Insurers set their own standards for which businesses they’ll cover, so a business one insurer declines may be accepted by another. Have the work, the payroll, the revenue and the claims history ready for the next application.

Sources for these answers: the Texas Department of Insurance guides to general liability and commercial property, and the Insurance Information Institute on insuring a home business.

Tell me about your business

What you do, who works for you, and what a contract or landlord is asking for. I’ll take it from there. Or just call me.

Arizona Insurance Producer License No. 1461741 (NPN 1461741)