State Farm Small Business Insurance Review

Last Updated on May 3, 2023

“Like a good neighbor”, as their tagline professes, State Farm looks out for the risks everyone faces in their everyday life. These include those associated with health, pets, all the way down to people’s properties, and keepsakes.

State Farm understands the challenges small businesses face and designs insurance solutions to help business owners navigate these risks with confidence. Started in 1922 as a means to provide farmers in the state of Illinois with protection for their vehicles, State Farm is now the top auto coverage provider in the United States.

Photo Credit: Smithsonian National Postal Museum

And, as an industry leader, they have taken the last 100 years to expand their line to include business insurance products such as surety bonds and liability coverage. State Farm now insures over 300 professions and industries from retail shops and physical stores, contractors and trades, to specialized professionals such as chefs and consultants.

In today’s article, we take a look at State Farm Insurance Company in detail and how they could benefit small business owners such as yourself. This will cover many key considerations a business owner should take into account before committing to an insurance policy, such as the company’s options and pricing, as well as the process for filing quotes and claims.

Table of Contents

Why Do Small Businesses Need Insurance?
Coverage
Availability
Cost
Quotes
Rating
Alternatives

Why Do Small Businesses Need Insurance?

Like many individuals and families, companies of all sizes rely on insurance to protect them from a variety of risks. And while larger operations may have the resources to withstand most types of losses, small and medium-sized enterprises often struggle to recover without adequate insurance coverage. That’s because these companies typically lack the infrastructure and financial stability needed to weather unforeseen events such as damage from natural phenomena, vandalism, or even theft. In addition, having insurance can also help support and grow a business, by allowing it to invest in new areas or test new products with less risk.

Whether it’s protecting their building from fire or helping to cover lost revenue from missed workdays due to illness, insurance is crucial for businesses of all sizes and can play an essential role in promoting growth and stability for entrepreneurs everywhere.

Several high-risk industries are particularly susceptible to liability, including those involved with natural resource extraction, transportation, and manufacturing. For example, companies in the oil and gas industry face significant risks due to the volatility of the commodity markets and the inherent dangers of their work processes.

Similarly, businesses in transportation industries like trucking and shipping must operate within very tight margins and often carry large loads of valuable goods, making them especially vulnerable to accidents or malfeasance.

Finally, companies involved in manufacturing tend to deal with hazardous materials daily and can be exposed to safety liabilities if they fail to properly handle these substances.

Whether due to bad weather or human error, companies operating in high-risk industries will always be at risk of financial consequences such as lawsuit settlements or regulatory fines. And regardless of what industry you’re in, it’s crucial to mitigate this risk by ensuring proper staffing levels, maintaining a robust safety program, and minimizing exposure through well-drafted contracts and insurance policies. By taking these steps, a business can help protect itself against lawsuits or other liability claims that could derail its operations and destroy its bottom line.

Altogether, these factors make it clear why all small businesses need insurance. So, be sure to invest in the right insurance policy for your business needs today!

State Farm’s Coverage Offerings

State Farm offers a variety of insurance policies for small businesses, including commercial auto insurance and professional liability coverage. Additionally, they also offer specialized coverage options such as contractors’ policy for independent workers. State Farm’s offerings are discussed in further detail below.

Business Owners Policy: BOP, or a business owners’ policy, is an excellent choice for small businesses looking to protect their assets. BOPs provide comprehensive coverage for a variety of risks and threats, such as property damage, lawsuits, and theft. In addition, they are generally easier to obtain and less expensive than separate policies.

Commercial Auto Insurance: As the name suggests, commercial auto coverage covers vehicles used for business purposes. This can include company cars, delivery vehicles, or even personal cars used for business-related tasks.

Business and Professional Liability Insurance: Also known as general liability coverage and errors and omissions coverage, respectively, these cover businesses against lawsuits resulting from third-party harm such as bodily injury and property damage and claims of negligence relating to professional services. In this regard, liability insurance covers common risks from accidents on your premises to minuscule mistakes made in the course of your work.

Business Personal Property Insurance: Also called commercial property insurance, this policy protects the physical assets, including furniture, equipment, and inventory. This is essential coverage for those with physical stores because forces of nature such as wind, hail, and floods tend to damage property rather than hurt people.

Building Property Insurance: In addition to commercial property coverage, this type of coverage protects the physical structure, such as its buildings, structures, and even fixtures within the buildings themselves.

Workers’ Compensation Insurance: Workers’ compensation helps to protect both employees and business owners against workplace injuries or illnesses. This type of coverage can offer essential support for medical expenses and lost wages, as well as legal defense costs in the event of a lawsuit.

Overall, State Farm offers a variety of options for small businesses looking for comprehensive coverage that is customized to their unique needs and risks. They also offer surety and fidelity bonds that guarantee your clients that you will fulfill your contractual obligations.

Why Invest in a Contractors’ Policy?

Also called artisan and service contractors insurance, this type of commercial insurance is offered by State Farm and is specifically designed to meet the needs of the construction industry. This type of coverage protects business owners against various types of risk, including business property loss or damage.

Additionally, it can help to protect against liabilities related to accidents and injuries, as well as the risks associated with having an on-site work crew. It also includes mobile equipment protection for tools and other equipment, and an installation floater that protects against damage to structures for installation, whether they are in transit, simply being stored, or already being worked on.

For business owners who rely on their abilities and skills to generate income, artisan and service contractors’ coverage offers essential peace of mind by providing essential protection for both business assets and employees. Whether you are running a carpentry business or operating a custom auto body shop, this type of insurance policy can help to safeguard your company from unforeseen risks.

In Which States is State Farm Available?

State Farm offers coverage options for small business owners in all 50 states. However, coverage options and availability may vary by state.

No matter where your business is located, it’s crucial to have the right coverage in place to protect your assets and employees. Contact a State Farm agent today to discuss your available options.

Cost of Policies from State Farm and Factors Affecting Pricing

The cost of commercial policies from State Farm varies based on several factors, including the specific coverage options chosen, the size and nature of the business, and the location. Additionally, discounts may be available for certain risk-reducing measures or for bundling multiple insurance policies together.

To get an accurate quote for your specific needs, consult with a State Farm agent who can discuss coverage options and pricing.

The State Farm Quoting Process

Getting a quote for your small business can be done by calling 800-STATEFARM (800-782-8332) or online on their website.

Without any login required, you can simply enter a ZIP code and you will be redirected to a local agent for a quote.

During the quoting process, a State Farm agent will gather information about your business, including its size and industry, as well as details about specific coverage needs. They will then use this information to create a customized insurance plan and quote for your business.

State Farm Small Business Insurance Rating

State Farm is an insurance company that truly stands out from the crowd. Not only does it have the highest rating from AM Best, an independent financial rating organization, but it also has a very high rating from Standard and Poor’s.

Additionally, this company is accredited by the Better Business Bureau, which speaks to its impressive commitment to customer service.

The State Farm Claims Process

Filing a claim as well as tracking its progress can be done on State Farm’s website, but you will still need to speak with an insurance agent to effectively manage your claims.

3 Alternatives to State Farm

Although State Farm is already among the top insurance providers, risks still vary from one enterprise to another. As such, you may want to consider these three when it comes to your choice for a small business insurance company:

Chubb

Chubb is a leading provider of property and casualty insurance coverage, offering coverage that goes beyond the typical offerings of other companies. Unlike other companies that tend to focus on particular segments or regions, Chubb has a wide reach and provides insurance products for individuals and businesses of all sizes.

Whether you are looking for property insurance to cover your home, auto insurance to protect your vehicles, or liability coverage to protect against lawsuits, Chubb can provide the comprehensive coverage you need.

Chubb’s long-standing presence in the industry and vast network of agents and brokers ensure that it can handle your business needs. Among this insurer’s unique offerings are environmental liability, political risk, and transactional risk insurance.

Travelers

With comprehensive coverage and industry-leading customer service, Travelers is also among the leaders in the field of auto and commercial coverage. For professionals like engineers and architects, they offer customized solutions designed to meet your specific needs and provide the security you need to protect yourself from professional liability lawsuits. This insurer also offers management liability including employment practices liability insurance for executives and company leaders.

However, for businesses that rely on physical goods and services to thrive, like construction contractors or landscaping companies, State Farm offers a similarly robust selection of products that can help you mitigate risk, save money, and get ahead in your field.

GEICO

GEICO has become one of the top players in the auto insurance industry, thanks to its innovative products and excellent customer service. With over 18 million customers and billions of dollars in annual revenue, GEICO is a major force to be reckoned with even in the business insurance industry, offering products to help with general liability, property protection, professional liability, workers’ compensation, medical malpractice, and, of course, vehicles used for commercial purposes.

Despite its strong performance, however, GEICO still lags behind State Farm in terms of market share. This is likely due to State Farm’s long history and deep roots in the insurance industry.

Nevertheless, GEICO has emerged as a viable challenger to State Farm’s leadership position, positioning itself as an excellent choice for anyone looking for quality coverage. Their premiums also tend to be lower than State Farm’s and the national average in most states.

Bottom Line

For business owners looking for reliable and affordable coverage options, State Farm is one of the most trusted names in the industry. Their small business insurance products are tailored to meet the unique needs and risks faced by different types of businesses.

Whether you are a new entrepreneur or a seasoned professional, their coverage options can help protect your bottom line from losses caused by unforeseen events. And because State Farm understands that many small businesses cannot afford traditional commercial coverage, they offer competitive rates and flexible terms to help make business protection more accessible.

Overall, if you are looking for quality and peace of mind when it comes to your small business insurance needs, then State Farm is worth consideration.