Is business insurance tax deductible?
Yes. Liability, professional, cyber and business property insurance are deductible in full.
The rule
Insurance that protects the business is an ordinary expense: general liability, errors and omissions, cyber, and cover on business equipment or inventory. Pay a year ahead and it is deductible in the year you pay, as long as the policy covers twelve months or less.
Car insurance is part of the car, deducted by its business share under the actual method, and already inside the mileage rate.
A $540 yearly professional liability policy is deductible in full.
Priced at 36¢ on the dollar, the rate of a $95,000 sole proprietor in California. Work out yours.
- Where it goes
- Schedule C line 15, insurance
- What to keep
- The policy and the invoice.
- Watch for
- Your own health insurance is deducted separately, off income rather than on Schedule C. Life insurance on yourself and disability insurance that replaces your income aren’t deductible.
Checked on September 25, 2026 against Instructions for Schedule C and Publication 334, Tax Guide for Small Business. An estimate for your records, not tax advice.
By the kind of work
What else each of these can deduct, and what they tend to miss.
See it on every receipt.
Snap it and Reimburse files it on the right Schedule C line, takes the deductible share and shows what it puts back.