Is Business Insurance Tax Deductible? (2026)

Yes

Yes. Insurance you carry for your business is deductible: general liability, professional or errors-and-omissions (E&O) insurance, business property and equipment coverage, business interruption, and business auto (under the actual-expense method). This is separate from self-employed health insurance, which has its own above-the-line deduction. Personal life insurance is not deductible.

Where it goes: Schedule C, Line 15 (insurance, other than health)

Illustration for whether business insurance is tax deductible

Ordinary and necessary insurance for your business is a deductible expense. That covers general liability, professional liability or errors-and-omissions coverage, property and equipment insurance, business interruption insurance, and specialized policies your trade requires.

Business auto insurance is deductible when you use the actual-expense method for your vehicle, as part of your total vehicle costs times the business-use percentage. If you use the standard mileage rate instead, insurance is already built into that rate, so you do not deduct it separately.

Health insurance is handled differently. Self-employed health insurance premiums are not a Schedule C expense; they are an above-the-line adjustment on Schedule 1. Keep them separate from your business liability and property insurance.

Personal insurance does not qualify. Personal life insurance, and the personal portion of any policy, are not business deductions. Keep your business policy documents and premium records so the deduction is easy to support.

When it qualifies

General liability insurance for your business
Professional liability / errors-and-omissions (E&O) insurance
Business property, equipment, and interruption insurance
Business auto insurance (under the actual-expense method)

When it does not

Personal life insurance
Self-employed health insurance (deducted separately on Schedule 1)
Auto insurance if you use the standard mileage rate (already included)

How much can you deduct?

The full premium for business insurance. For business auto, the business-use share of the premium under the actual-expense method.

A worked example

Example: you pay $700 a year for general liability and $1,100 for professional (E&O) insurance for your business. The full $1,800 is deductible on Line 15. Your personal life insurance premium is not.

A deduction only counts if you can prove it. NeoReceipt captures the receipt and files it onto the right Schedule C line, so every write-off is documented at tax time.

Try NeoReceipt free 1099 tax calculator

Frequently asked questions

Is business insurance tax deductible?+

Yes. General liability, professional (E&O), property, and business interruption insurance for your business are deductible on Schedule C Line 15. Personal life insurance is not.

Is professional liability or E&O insurance deductible?+

Yes. Professional liability and errors-and-omissions insurance carried for your business are ordinary and necessary costs and are fully deductible.

Is business auto insurance deductible?+

Under the actual-expense method, yes, for the business-use share. If you use the standard mileage rate, insurance is already included in the rate and is not deducted separately.

Is health insurance a business insurance deduction?+

No. Self-employed health insurance is deducted as an above-the-line adjustment on Schedule 1, not as a Schedule C business insurance expense. Keep the two separate.

Is life insurance tax deductible?+

Personal life insurance premiums are not deductible. Business insurance like liability and property coverage is deductible, but personal life insurance is not.

Where does business insurance go on Schedule C?+

On Line 15, insurance other than health. Keep your policy documents and premium records so the amount is easy to support.