How much does business insurance cost?
Small business insurance can cost somewhere between $500 and $1,000 for many small businesses with few or no employees to get properly insured. But it really depends on your situation. We have some sample prices based on industry and type of coverage, but it’s important to know that these are general estimates. A lot more factors affect the price of small business insurance.
If you’re a small business owner you will obviously pay less for business insurance than a large corporation. The main reason is that you face less risk. The amount of risk you face is the main factor that determines how much your insurance will cost each year. As you grow, your needs will adapt and change. And it will likely cost more.
Unsurprisingly, business insurance costs can vary widely from business to business–even within the same industry. The best way to find out how much insurance will cost is to get an estimate. We can help you get the right insurance at the lowest cost.
Business insurance cost factors


It makes sense because the more you make, the more exposure you have (and the more you have to lose). And the more exposure you have, the more coverage you need. The cost of your policy rises with the level of risk exposure.


However, a shop in an urban area might pay more for liability insurance. That’s because there is more foot traffic in their location compared with a country general store. (More foot traffic=more risk.)




Additional insurance cost factors
Your Industry
Obviously, different professions face different risks.
In a sense, a bookkeeper faces much less physical risk than a construction worker. Therefore, workers’ comp is less expensive for bookkeepers than construction workers.
However, a bookkeeper most likely handles more sensitive information than a construction worker, so their cyber liability policy would be more expensive.
If the bookkeeper works remotely, and doesn’t have much in-person interaction with clients, their general liability policy would be less expensive than a construction worker’s. That’s because contractors work on job sites and interact with clients’ property. Therefore, there is more risk of property damage and bodily injury.
Consultants, architects, and engineers tend to have higher professional liability premiums than designers, writers, and small retailers because they provide expert advice and services. That’s because they’re more at risk for claims related to negligence and professional errors.
Claims History
Insurance companies will often raise the rate for the industry as a whole if many people have filed claims within the same field. So, let’s return to our bookkeeper and contractor example. More contractors have filed work-related illness or injury claims than bookkeepers. Therefore, the workers’ comp classification rate for someone in construction is higher than for a clerical worker.
However, if few claims have been filed in your industry, insurance companies may lower the rates based on good claims performance.
Cost by coverage
Prices Vary by Policy
Insurance rates depend on the level of risk the policy covers. Those considering liability insurance are looking to cover different liabilities than those getting workers’ comp. Higher risks means more potential for claims. That’s why some insurance is more expensive than others.
See the graph below to get a better understanding of how insurance rates vary by type.

Liability Insurance
This is the first type of insurance most business owners will buy, because it provides great baseline protection. General liability insurance covers various mishaps, including physical claims like bodily injury or property damage, as well as non-physical risks such as copyright infringement, libel, slander, and false advertising. Court costs are also covered with this policy in the event that you face a lawsuit.
Elements that affect the cost of this policy include:
- The location of your business
- If you meet with your clients in person
- If you represent clients
How much does general liability cost?
On average, small business owners with between 1–10 employees typically pay between $400 and $650 per year.
Check out our general liability insurance cost analysis to learn more.

Depending on your line of work, general liability insurance prices can vary.

Professional Liability
Also known as errors and omissions (E&O), this policy is important for anyone who provides expert advice or services to clients. When people depend on you for your expertise, that comes with risk. And if your advice turns out to be the wrong advice, you could face a lawsuit from an angry client.
Professional liability insurance covers negligence, failure to deliver promised services, professional errors, and court costs (should you face a lawsuit).
Factors that affect the cost of professional liability include:
- Your profession
- Business location
- Your size
- Your tendencies
- The number of claims your industry has filed
How much does professional liability cost?
Many smaller operations can expect to pay between $600 and $1,800 per year, although the policy average is around $900 for professional liability, or errors and omissions insurance.
Check out our professional liability insurance cost analysis to learn more.

The level of limits you select for you policy affects the price of the coverage. The higher the limits, the more you will spend.

Commercial Property Insurance
Most professionals rely on some sort of device, tool, or piece of equipment to successfully complete their work. Commercial property insurance covers commercial property replacements or repairs in the event of a natural disaster, burglary, fire, or flood.
Covered business property includes:
- Tools
- Equipment
- Devices
- Furniture
- Supplies
- Inventory
- And more
How much does commercial property insurance cost?
The price depends on the value of the items you would like to insure, but if you’re a modest operation, you could pay as little as $400 per year. However, if you’re looking to cover high-value items, the price will increase.
Inland Marine
If you have commercial property insurance, that’s great! But the downside is that the coverage ends after you are 500 feet away from your premises.
To protect your commercial property off-premises, you’ll need inland marine insurance. If you take your tools, equipment, or supplies to client meetings and other job sites, this policy will protect your property in transit and at other locations.
How much does inland marine insurance cost?
The price depends on how much you need. For example, you could pay $250 for $10,000 worth of coverage, but it all depends on what you do, what you’re covering, and what the property is worth.
Business Owner’s Policy
Also known as a BOP, this policy combines general liability and commercial property insurance into a package deal. Business owner’s policies provide more coverage at a lower price than purchasing each of the policies separately. The great thing about BOPs is that it’s quite simple to tack on more coverages to the package as well. All in all, it’s a great way to reduce the cost of business insurance.
Cost factors include:
- Your claims history
- Number of employees
- Your revenue
- The worth of your business property
How much does a business owner’s policy cost?
The price of a BOP depends on the size of your business. If you’re a one-person operation, you could pay as little as $250/year, but most small businesses typically pay around $1,000/year for this policy. Check out our business owner’s policy cost analysis to learn more.

Workers’ Comp
Work comp is often legally required if you have employees, but many business owners purchase a policy to cover themselves as well. Workers’ comp insurance is very important because it covers job-related illnesses and injuries. Medical bills can be quite costly, so it’s good to stay covered.
Elements that affect cost include:
- Your profession
- Where you do business
- Your payroll
- Your claims history
How much does workers’ compensation cost?
Calculating workmans’ comp rates is very specific. The cost of workers’ compensation is calculated by the following equation:

Other factors include the expense constant, which covers administrative fees. This averages around $200. If you are eligible for any premium discounts, it will affect the price as well. Learn more about the price of workers’ comp.
Check out our workers’ comp insurance cost analysis to learn more.
Cyber Liability
Protect your business and your customers in the event of a cyber threat. If you handle any sensitive customer information, even something as simple as credit card information, you should consider this policy. In the event that your customers’ information is exposed, it is a very long, expensive road to remedy.
Cyber liability insurance helps you and your customers stay protected, and helps cover the costs of customer notifications, forensics investigations, credit monitoring, and more.
Cost factors include:
- Your profession
- The types of information you gather
- How many transactions take place
- How many devices are involved
- Where you do business
How much does cyber liability cost?
The price of the policy usually starts at around $750 for an annual policy. From there, the cost can increase based on the factors above.

Commercial Auto Policy
If your business owns vehicles, you need this policy. Plain and simple. If you are driving a vehicle owned by your business and something happens, you’re probably out of luck. Many people don’t realize their personal auto policy typically will not cover the incident.
Protection benefits of commercial auto insurance include bodily injury liability, property damage liability, physical damage, and collision coverage.
Elements that affect cost include:
- The vehicle make and model
- The age of the vehicle
- The cost of the vehicle when it was new
- The vehicle’s weight
- The user’s driving record
How much does commercial auto insurance cost?
Generally speaking, the average cost per vehicle is around $750 per year.
Hired & Non-Owned Auto
Hired & non-owned auto insurance is necessary if you hire, rent, or borrow vehicles for work. It also extends liability coverage to employees who use their personal vehicles on behalf of your business.
How much does hired & non-owned auto insurance cost?
This endorsement is very affordable, and can start from as little as $100 per year.
Umbrella Insurance
Umbrellas add extra protection to existing business insurance policies. So, if you have a commercial auto policy, but are looking for an added layer of padding, you can place an umbrella on top of your business auto policy.
Let’s say your auto insurance policy has limits of $500,000. You get in an accident while driving on behalf of your business, and the damages result in $600,000. While your commercial auto policy payout is capped at $500,000, your umbrella insurance can pay the remaining $100,000.
How much does umbrella insurance cost?
Depending on the limits you pick, you might pay between $400 to $600 per year for starters.

Save on business insurance costs
Shop Around
According to Fit Small Business, 40% of businesses will file a claim within a 10 year period. That makes it likely that your business insurance costs will pay off at some point during the life of your business.
But you can save some money now by shopping around at different insurance companies. Many times an insurance company has better deal for certain industries that they specialize in. An insurance expert can make sure you’re comparing apples to apples. And that’s where we can help. Just fill out one simple form about your business to compare insurance from over 30 top providers.
Bundle for a better deal.
Many insurance companies will give you the option to package things together. And you can save money by doing so. A business owner’s policy is a popular option for low-risk businesses. They’ll give you a deal for combining GL and property insurance together.
Bonus: You can easily include more coverages and endorsements to the package based on your needs.
We can save you money.
Fill out an easy form, and we’ll compare quotes from over 30 insurance companies to find small business insurance at the lowest price. We offer free estimates with zero commitment.