Do You Need an Insurance Agent for Your Small Business?

By Bill Stilwell · Last reviewed October 16, 2026

The short answer

Most small businesses should work with a licensed insurance agent or broker who learns your actual risks before selling you anything. The Small Business Administration (SBA) says businesses with employees must carry workers’ compensation, unemployment, and disability insurance, and some states require more. A good insurance professional matches your coverage to your contracts, workers, vehicles, property, products, and customer data.

What this means

An insurance professional helps you buy the right coverage. There are two common types.

Agent. Sells policies for one company or for several. The SBA notes that agents earn commissions from insurance companies when they sell policies, so pick one who focuses on your needs.
Broker. Usually shops several companies on your behalf. How brokers are paid can vary, so ask.

Either way, the person must hold a license in your state. The outline line for this page lists what they should look at: your risks, your contracts, your employees, your vehicles, your property, your products, and your data.

Say a pressure washing company is about to sign a contract with a property manager. The contract says the company must carry a set amount of general liability coverage and name the property manager on the policy. A good agent reads that clause, confirms the policy meets it, and sends the certificate the property manager asked for. A rushed online quote might miss it, and the contract could be in breach on day one.

Why it matters

One claim can end a small business. An injury on a job site, a crashed work truck, or a data breach can cost more than you have.
Contracts often require proof. Many customers, landlords, and general contractors won’t let you start without a certificate of insurance (see 11.2.6 Insurance Certificates from Vendors).
Some coverage is required by law. The SBA lists workers’ compensation, unemployment, and disability insurance for businesses with employees.
Personal auto and home policies may not cover business use. Ask before you assume.
Gaps hide until a claim. You find out what’s excluded when it’s too late.

Who this applies to

Every business. Even a one-person online business has risks like professional mistakes and data loss. You need extra care if you have employees, drive for work, work in customers’ homes, sell products, rent space, or hold customer data.

How to do it

List your risks before you call anyone. Think about accidents, lawsuits, weather, theft, and data loss. The SBA suggests including seasonal risks where you’re located.
Gather your documents: your lease, customer contracts, vehicle list, equipment list, payroll estimate, and a description of what you do.
Ask other owners in your trade, your attorney, or your CPA for names of agents who work with businesses like yours.
Check the license. Use your state insurance department’s lookup or the National Association of Insurance Commissioners (NAIC) agent search, which shows whether a person is licensed in your state and what they can sell.
Meet with 2 or 3 agents or brokers. Give each the same information so you can compare.
Ask each one to explain what is not covered, not just what is.
Compare price, limits, deductibles, and exclusions side by side. The SBA says to shop around.
Ask the agent to read any contract clauses about insurance before you sign them.
Get the policies, declarations pages, and certificates in writing.
Set a yearly review date, and call the agent before any big change: hiring, a new vehicle, a new service, or a new location.

What proof to keep

The license lookup result for your agent or broker
Every policy and its declarations page
Certificates of insurance you’ve sent to customers or landlords
Notes from each review meeting
Renewal dates on your financial calendar (see 10.9.1 Financial Calendar)

Keep these in your insurance folder, with a copy in your backups.

Common mistakes

Buying the cheapest online quote without reading exclusions. Price means nothing if your main risk isn’t covered.
Not telling the agent everything you do. A roofer who also does gutter work needs both on the application. Leaving work off can give the insurer a reason to deny a claim.
Using a personal vehicle for work and never asking. Your personal auto policy may not cover business use.
Signing contracts before checking the insurance clause. Some contracts ask for coverage you don’t have.
Saying “fully insured” in ads. It’s vague and can mislead. State what you actually carry.
Forgetting to update the policy after hiring. Workers’ compensation rules change once you have employees (see 10.3.7 Workers’ Compensation).

When to get help from a pro

This page is about choosing that pro. When you interview an agent or broker, ask:

Which coverages do businesses like mine usually need in this state, and which are required by law?
What does this policy not cover, in plain words?
How are you paid, and do you work with more than one insurance company?

Talk to your attorney if a contract asks you to take on someone else’s liability or to name them on your policy.

Bill’s note

[Bill: add a short story or opinion here. For example, what you learned the first time a client or landlord asked SiteSmarty for a certificate of insurance, or a coverage gap you didn’t know about until you asked.]

How I did this for SiteSmarty

[Date I did this:]
[What I actually did, step by step: how I found the agent, how I checked the license, which coverages I asked about]
[What it cost and how long it took: yearly premium range and time spent]
[What surprised me or what I’d do differently:]
[Screenshot or photo to add, with private info blurred: the agent license lookup and the coverage summary page]
[Result so far:]

Questions people ask

What insurance is required by law for a small business? The SBA says businesses with employees must carry workers’ compensation, unemployment, and disability insurance. Some states require more, so check your state’s insurance department and labor department.

What’s the difference between an agent and a broker? An agent sells policies for one or more insurance companies. A broker usually shops several companies for you. Both must be licensed in your state.

How do I check an insurance agent’s license? Use your state insurance department’s license lookup or the NAIC agent search.

How often should I review my business insurance? At least once a year, and any time you hire, buy a vehicle, add a service, move, or sign a big contract.

Audit check

Question: Was business insurance bought through a licensed professional who reviewed the business’s real risks and contracts?
Pass looks like: A licensed agent or broker, confirmed by a license lookup. Written policies that match the business’s work, workers, vehicles, property, and data. Contract insurance clauses checked. A yearly review on the calendar.
Fail looks like: No insurance, or a policy bought online without reading exclusions. Work left off the application. Personal auto used for business without asking. No renewal dates tracked.
Evidence to collect: License lookup screenshot, declarations pages, certificates sent to customers, and the last review date.

Where this fits

Do this first: 6.3.3 Bookkeeper, 6.3.1 Business Attorney

Do this next: 6.3.5 Payroll Professional

Sources

U.S. Small Business Administration, "Get business insurance" (checked October 16, 2026)
National Association of Insurance Commissioners, "Insurance Agent/Broker Search" (checked October 16, 2026)

This page explains general rules and Bill's own experience. It is not legal, tax, or insurance advice. Talk to a qualified professional about your situation.