Small business insurance costs between $14 and $124 per month, depending on the types you buy: general liability, business property, business interruption insurance, inland marine insurance, cyber liability, or workers’ compensation. if you buy all of these types of coverage, you’ll probably pay around $340 a month.
Here’s an overview of how these costs break down and what factors influence rates the most when looking for the best small business insurance.
business insurance costs at a glance
cost of general civil liability insurance
General liability insurance protects you from lawsuits or claims if someone is injured on your property or if you are responsible for damaging someone else’s property. It typically costs around $30 per month, according to a recent study by Hiscox. the study also found that 95% of business owners pay less than $50 a month and only 1% pay more than $100.
what factors affect general liability insurance premiums?
These four factors have the most influence on general liability insurance premiums:
- building size. larger buildings invite more opportunities for accidents to occur. so if you operate a larger facility with more foot traffic, you could pay more.
- location. businesses that operate in high-risk areas with higher crime rates may pay more for liability insurance.
- payroll size and annual income. The higher your expenses or operating costs, the more you can expect to pay for liability insurance.
- claim history. if you have filed general liability claims in the past, it could increase your premiums.
- policy details. Coverage limits, deductibles, and other policy details affect the cost of your business insurance.
- location. Operating in a high-risk area prone to natural disasters can increase premiums.
- age and size of the building. Insuring old or large buildings will cost more than insuring smaller or newer buildings.
- types of fire protection. having a sprinkler system, fire alarms, and easy access to a fire department can lower the price of your premiums.
- equipment costs. Commercial property insurance reimburses you for lost or damaged items on your property, so expect to pay more if you house expensive equipment.
- types of risks covered. Similar to home insurance, you’ll pay more if you need to cover additional perils to your business, like floods, earthquakes, or employee theft.
- income. Since business interruption insurance covers loss of income, the higher the business income, the higher the insurance premium to cover it.
- industry. Industries, such as restaurants, are more likely to experience property damage and will pay a higher business interruption insurance premium.
- the value of your business property. In general, the higher the value of your business property, the more you will pay for business interruption insurance.
- industry. businesses that are more exposed to cyber risk may need policies with higher coverage levels and therefore higher premiums.
- your company’s income and costs. The higher your income, expenses, and operating costs, the more you can expect to pay for cyber insurance.
- the security of your network. Strong network security practices, or lack thereof, affect your risk of cyber claims.
- The number of people who have access to your systems and data. More access rights can mean more risk, resulting in higher premiums.
- your claims history. past cyber insurance claims can affect future cyber insurance premiums.
- payroll size. The larger your business and the larger your payroll, the more you can expect to pay for workers’ compensation insurance.
- job duties of employees. expect to pay more for employees who have riskier job duties. For example, workers’ compensation costs for white-collar jobs will be lower than hands-on jobs like construction or mechanical work.
- location. If you live in a monopoly state, such as North Dakota, Ohio, Wyoming, or Washington, you are required by law to purchase state-funded workers’ compensation. you have no other options. but in other states, you can search for workers’ compensation quotes on the private marketplace.
- search and compare quotes from multiple insurance companies.
- bundle multiple policies from the same insurer, such as property and liability insurance.
- pay your premiums annually instead of monthly.
- raise your deductible, if you can afford the out-of-pocket costs you would pay to file a claim.
- avoid risks that could lead to a claim.
cost of business property insurance
Business property insurance protects your business from loss in the event of fire, natural disaster, theft, or other issues.
The average cost of commercial property insurance is $63 a year, according to Insureon. this is for a standard coverage limit of $60,000 with a $1,000 deductible.
insureon found that nearly half (42%) of business owners pay between $46.67 and $83.33 a month for business property insurance, while 16% pay less than $46.67.
what factors affect commercial property insurance costs?
Several factors can influence commercial property insurance costs:
cost of business interruption insurance
If your business must be temporarily closed due to a loss covered by your policy, business interruption insurance helps you replace your lost revenue and pay for operating expenses during that time. this includes lost income, mortgage payments, leases or rents, loan payments, taxes, payroll, relocation costs, and training costs.
The average cost of business interruption insurance is between $40 and $130 per month, or $500 and $1,500 per year, according to insureon.
what factors affect business interruption insurance costs?
Three main factors will influence your business interruption insurance costs:
cost of inland marine insurance
Inland marine insurance protects your business if something happens to your property or products during transit. this could include goods being shipped to or from your business, or property used for business purposes (such as lawnmowers or camera equipment).
The median cost of inland marine insurance is $14 a month or $169 a year, according to insureon. this is for a coverage limit of $5,000.
insureon found that a coverage limit of $5,000 is the most popular option among its customers for those in the landscaping, cleaning, installation, and construction industries.
By comparison, photographers and videographers typically choose an $86,000 policy limit (which has an average annual premium of $580), while architects and engineers purchase higher coverage limits.
what factors affect inland marine insurance costs?
There is one main factor that influences inland marine insurance: costs of equipment or products. Small business owners who need to transport expensive equipment or products can expect to pay higher premiums.
cost of cyber liability insurance
Cyber liability insurance protects a business from financial losses that may occur as a result of a cyber attack. This type of insurance can cover the costs associated with repairing or rebuilding your business after a cyberattack, as well as legal fees and settlements.
The average cost of cyber liability insurance is $123.75 per month or $1,485 per year, according to advisorsmith. but businesses can pay anywhere from $650 a year to $2,357, depending on their industry.
for example, advisorsmith found that companies in the payment processing, financial services, investment services, law, and insurance industries pay the most for cyber insurance. companies in the transportation and logistics, administrative services, manufacturing, car dealerships, and construction sectors pay the least.
what factors affect cyber liability insurance costs?
There are several main factors that affect cyber insurance costs:
cost of workers’ compensation insurance
Workers’ compensation insurance is a type of insurance that helps employees who are injured while on the job. the insurance company usually helps pay for medical expenses and lost wages, among other things.
The average cost of workers’ compensation insurance is $70 a month or $840 a year for businesses with less than $300,000 in payroll costs, according to Hartford.
In most states, you are legally required to have workers’ compensation if you have at least one employee. But workers’ compensation laws vary by state. For example, it is not required if you operate in Alabama with fewer than five employees or in Arkansas with fewer than three employees. workers’ compensation insurance is not required in texas or wyoming.
what factors affect workers’ compensation insurance costs?
Three main factors affect workers’ compensation costs:
For the six types of policies above, expect to pay around $340.75 a month in total, or $4,090 a year, on average.
how to reduce business insurance costs
Business insurance is an important way to protect a business from costly damage. can be a significant expense, especially for small businesses.
One of the best ways to save is by purchasing a business owners policy (bop). A bop groups three essential types of coverage: general liability insurance, commercial property insurance, and business interruption insurance. it’s usually cheaper to buy one bop instead of three separate policies.
Here are some more tips to reduce business insurance costs: