If you’re starting a business, it’s natural to wonder: Do I need a business license to get insured? The short answer is no, not always—but there’s more to it than that.
What Is a Business License?
A business license is a government-issued document that gives you permission to operate your business legally within a certain jurisdiction—city, county, or state. Requirements vary depending on the location and industry, but most businesses need some form of license or permit.
Can You Get Business Insurance Without a License?
In many cases, yes, you can. Insurance carriers typically focus on evaluating your business operations, risks, and coverage needs, not necessarily whether your business is licensed. However, there are exceptions.
When a License May Be Required
Some types of business insurance do require a license, especially in regulated industries. Here are a few examples:
- Professional Liability Insurance (E&O): Often required for licensed professionals like contractors, real estate agents, doctors, and financial advisors.
- Workers’ Compensation Insurance: In California, and many other states, this coverage is legally required for businesses with employees, and proper business registration is often part of compliance.
- Contractor’s Insurance: Contractors in trades like plumbing, electrical, or general contracting will usually need to show proof of licensure.
- Commercial Auto Insurance: If your vehicle is registered for business use, insurers may ask for proof of business status or licensing.
Why Having a License Can Help
Even if not required, having a license shows that your business is legitimate and compliant with local laws. It can:
- Speed up the insurance underwriting process
- Increase your credibility with clients and vendors
- Help you qualify for more comprehensive or affordable coverage
What You Do Need to Get Insured
Even without a business license, insurers may ask for:
- A business name (DBA or LLC)
- A physical business address
- A description of services offered
- Estimated revenue and number of employees
- Prior insurance history (if any)
Final Thoughts
While you don’t always need a business license to get insured, having one can open doors to more coverage options and smoother approvals. It’s also one more way to show customers you run a trustworthy, professional operation.
Need help finding affordable business insurance in California?
At Eugene C. Yates Insurance Agency, we’ve been helping Sacramento-area businesses get the coverage they need—licensed or not—for over 75 years. Contact us today for a free, no-obligation quote.