Small business insurance is a special policy designed to combine protection from property and liability risks. Usually, there are several different coverage options that insurance companies offer to protect things like business premises, contents, stock and equipment, and financial loss due to business interruption.

So how much does small business insurance cost? Small business insurance costs can vary from $14 to $124 per month, depending on the type of policy you need, your profession, the number of employees, and other factors. The more coverage you need, the more you’re likely to spend. 

For example, you want to know more about the average business insurance costs and realize you need more policies, including general liability, business interruption, inland marine, cyber liability, and workers’ compensation insurance. You will likely pay around $340 monthly for your insurance coverage if you buy all these policies. 

While business insurance can be tailored to suit the individual needs of any given business, many people still need more information about the policy before they make the final decision. The best way to estimate your small business cost is to shop for several business insurance quotes. 

In this article, we will cover some of the most important topics you need to know, including:

• Business insurance costs
• What factors impact llc insurance cost
• How much is business insurance per month
• Types of business insurance coverage 
• How to get cheap business insurance
• Average cost for liability insurance for small business
• And much more

Read on to learn everything you need to know. 

How Much Does Insurance For a Business Cost?

One of the most common questions business owners have is: “How much does insurance cost for a business?”

Here are some of the factors that can impact the cost of business insurance:

• The Type and Number of Cover Options
• The Nature of Business
• The Value of the Property Insured
• The Business Location

Each type of policy protects businesses against a different type of risk, and these differences impact the price. Here is a table that shows the median and average cost of business insurance:

Policy	Average Cost	Median Cost
Workers’ Compensation	$47/month	$111/month
Business Owners’ Policy (BOP)	$53/month	$99/month
General Liability	$42/month	$65/month
Professional Liability	$59/month	$75/month
Commercial Umbrella	$97/month	$129/month

Types of Business Insurance

When it comes to the average cost of insurance for a business, insurance companies usually offer several types of commercial insurance you can combine to get the best possible coverage for each stage of your business development.

General Liability Business Insurance

Most small businesses need this insurance. General liability protects businesses against bodily injuries, property damages, completed operations, and advertising injuries that may arise from the business.

The factors that impact the average cost of insurance for a small business are:

• Building size: Larger buildings have more opportunities for accidents, which means that if you have a big office, you are more likely to pay more for your small business insurance. 
• Location: Businesses located in high-risk areas pay more for liability insurance. 
• Annual revenue: If you have high operating costs, you may end up paying more for liability insurance costs.
• Claims history: If you have already filed general liability claims in the past, you could end up with more expensive small business insurance costs. 

Commercial Auto Insurance

If you use your vehicles for business, you should consider having commercial auto insurance. The policy provides liability and physical damage protection for your business vehicles and trailers. This type of insurance is especially useful if you travel between job sites or use your vehicles to make deliveries and transport equipment.

Professional Liability Insurance

If your business offers professional services or advice, liability protection is probably something you should consider having. This type of policy protects you against claims of professional negligence, also known as Errors and Omissions insurance (E&O).

Cyber Insurance

Cyber insurance protects against electronic threats, such as cyber-attacks and data breaches, that are very common today. If your business stores and processes sensitive data like credit card information, this type of policy might be for you.

The average insurance cost for a business depends on several factors, including:

• Industry: Businesses that are more exposed to cyber-attacks may end up paying higher premiums.
• Revenue: If you have higher revenue and operating costs, you can expect to pay more for cyber insurance.
• Your network security: A lack of strong network security practices can also impact the cost of your cyber insurance premium cost. 
• Claims history: Past cyber insurance claims also influence the cost of your small business insurance. 

Business Owners Policy (BOP)

Business Owners Policy combines business liability and property coverage into one policy. This type of coverage is usually a good idea for small businesses with commercial buildings or personal property.

Workers’ Compensation

Workers’ Compensation protects you and your employees. The policy helps pay for expenses such as medical costs and lost wages related to employees who were injured on the job.

There are several factors that impact the average cost of your workers’ compensation insurance policy:

• Payroll size: The bigger your payroll size, the more you will pay for workers’ comp insurance. 
• Location: If you live in a monopolistic state, you must buy state-funded workers’ comp insurance. 
• Type of work your employees do: If your employees have risky job duties, you can expect to pay more. 

How To Get Cheap Business Insurance?

Besides the question “how much does insurance cost for a business,” every business owner wants to know how to lower the price of business insurance costs. It is always a good idea to ensure you are not paying for the coverages you don’t need, but also to ensure you are not underinsured in case something bad happens.

To maximize your savings, analyze your business needs to understand what you need to protect the most. Make sure you include contractual requirements and get rid of any inapplicable coverages.

One of the best ways to save money on start-up business insurance costs is to adjust your deductibles. A deductible is an amount you pay toward a covered loss at the time of a claim. Typically, the higher your deductible, the lower the cost of your annual premium. That said, you should always make sure you are comfortable paying the deductible you select.

Another good way to save money on company insurance costs is to have very few claims made against your policy. Insurance companies can be quite rewarding to businesses that are diligent when it comes to customer and worker safety. Here are more tips on how to lower your small business insurance costs:

• Compare quotes from multiple insurance companies
• Bundle your policies together
• Pay your premiums annually instead of monthly
• Avoid risks that could lead to claims

How Much Does Small Business Insurance Cost?

Business hazard insurance is a type of small business insurance that helps you protect the property where your business operates. Another name for this type of business insurance is business property insurance.

When it comes to the average cost of liability insurance for small businesses, there are several factors that impact the costs. Usually, the first insurance policy that most business owners need is general liability insurance. This is also the least expensive one. According to Insureon, in an analysis of 28,000 small business owners’ commercial policies, the median cost of general liability insurance was $42 per month or $500 per year.

Furthermore, the median cost of a business owner’s policy (BOP), which combines general liability and business property coverage at a discount, was $53 per month or $636 per year.

Small business insurance costs also mostly depend on your profession. Because general liability covers third-party bodily injury and property damage, professionals who engage with the public usually pay more for this coverage. Higher risks also mean a bigger chance that you’ll file a claim, which means higher costs for insurance coverage.

Insurance in Washington D.C. is some of the most expensive ones in the U.S.

Business Insurance Cost FAQs

How is Commercial Property Insurance Calculated?

If you are looking for a commercial insurance cost estimator, here is a simple way to calculate commercial property insurance rates: you determine the value of the building and its contents and multiply that value by its risk factors. Insurance companies usually determine the value of a property by evaluating either the replacement cost or the actual cash value.

What Factors Impact Business Insurance Cost?

Many factors are important for calculating business insurance costs. Besides the type of policy and business location, some of the most important factors are:

• Profession: Because not all businesses carry the same risks, those with higher risk expect to pay more than businesses with lower risk. For example, one of the businesses with higher risk is tree trimmers. Their work is physical, and it often includes using power tools. On the other hand, professional services are exposed to a different type of risk and require professional liability coverage to keep them safe.
• Number of Employees: Businesses with several employees usually pay more for business insurance because their potential for claims is higher than businesses with few or no employees. Remember that each additional employee increases exposure to accidents or other events that may result in a claim.
• Coverage Needs: The amount of coverage you choose as a business owner impacts your premium.
• Location: Average insurance cost for a business depends on where your business operates. For example, the cost of workers’ compensation insurance is set by state laws.
• Payroll: The cost of your premium also depends on the size of your annual payroll. 
• Claims history: If you had several claims in your history of business insurance, you are more likely to pay more for your business insurance, which signals your company is not mitigating risk properly. 

How Much Is a $2 Million Dollar Insurance Policy for a Business?

The average cost of a $2 million insurance policy for a small business is $1,217 per year, with a median cost of $638. A Business Owner’s Policy with a $2 million limit has an average cost of $1,288 per year, with a median cost of $713. 

What is an Aggregate Limit?

An aggregate limit is the most an insurance company will pay toward a claim during the business insurance policy term. For example, if your policy limits are $1 million/$1 million aggregate, you have coverage up to $1 million for a single accident but no more than $1 million for the policy term. The length of your policy term depends on your carrier, but the most common are annual terms.

Do I Need Business Insurance?

If you run a business, you should consider having business insurance as it protects you against the everyday risks of the usual business activities. Business insurance covers accidents, theft, damage and legal fees, and mistakes that you cannot predict.

If you found this article useful, make sure you also read about Commercial Property Insurance and how to make it easier.

How Much Should I Budget for Business Insurance?

When it comes to budgeting, you should consider budgeting between 20 and 30 percent of predicted gross sales for business insurance. However, high-risk industries like construction and manufacturing can expect to pay more for their insurance premiums, which means they should also budget more for their insurance costs. 

Finally, small business insurance cost depends on many factors, from the type of policy you need, the number of employees you have, business location, and revenue to your claims history and risk levels. Before making the final decision on purchasing insurance, get quotes from at least three insurance companies.