Starting a business is exciting and new. It comes with a lot of thrill and risk, too. A business owner should be prepared for the risks that come with the business. There are unexpected risks in business, such as lawsuits and property damage. You never know what happens next. It is the reason why many business owners have this question in their heads: “How much is business insurance?”
You will get to understand everything about this in this article. The business insurance cost depends on many factors. We will cover everything related to the same in this guide.
How much is Business Insurance and Why Do You Need It?
The importance of business insurance is to protect your business or company from financial losses. These losses can happen due to many things. It includes accidents, unexpected situations, lawsuits, etc. Business insurance plays an important role as it is like a safety net for your business.
The kind of business insurance you need depends on the type of your business. There are different insurance policies for different types of businesses. Some of these are:
General Liability Insurance: This business insurance is known to cover the expenses of damage to property and other injuries.
Professional Liability Insurance: This business insurance policy provides protection against mistakes and carelessness in professional settings.
Workers’ Compensation Insurance: This insurance policy covers the bills for sickness and injuries that occur during the job.
Commercial Property Insurance: This insurance policy covers the expenses if the professional items are damaged or if things are stolen from the workplace.
Business Owner’s Policy (BOP): This policy contains a bundle of property insurance and general liability. This bundle of different insurances is available in this BOP at a low cost.
It is a wise thing to have a range of policy coverage. It makes sure that no unexpected event or accident destroys the business you have worked so hard to build.
How much is Business insurance in 2025: Average Business Insurance cost
Many business owners have this question in their minds: how much is business insurance? This question and concern are valid. We have listed the average business insurance cost of businesses in the U.S.:
- The average monthly cost of General Liability Insurance is $40-$80. If we talk about its yearly business insurance cost, then it is $480-$960.
- The average monthly cost of professional liability insurance is $60-$120. The cost for a year is $720-$1440.
- Workers’ compensation costs around $70-$150 for a month. The business insurance cost for a year is $840-$1800.
- The price of commercial property insurance for a month is $50-$100. The cost for a year is $600-$1200.
These are the rough figures that we have given when it comes to the business insurance cost. Your business insurance cost may differ as it depends on your business type.
Factors That Affect Your Business Insurance Cost
Providers of Insurance first go through your business properly. They check all the details related to your business, and then they give you your business insurance. Many factors determine the business insurance cost. Some of these factors are:
The type of your business or company: Different companies have different business insurance costs. Companies where there is more physical risk involved cost more. For example, a construction company faces more physical risks than a freelance writer.
The size of your business: The size of your business matters a lot when it comes to the business insurance cost. If the business is huge, then it will cost more.
Location or area of your business: Some companies or businesses are located in areas where they face natural disasters. These companies then pay more for their business insurance.
Coverage Type and Limits: If you have chosen a policy with more coverage, then you have to pay more.
History of Claims: Businesses that have clean records have to pay less for insurance. A business that has a history of claims may have to pay more.
Number of Employees: The business that has a larger number of employees pays more for the compensation of workers. That is why the business insurance cost is higher.
How Much Is Liability Insurance for a Business?
Many business owners often wonder- How Much Is Liability Insurance for a Business? This guide will help you understand it properly.
Business liability insurance is also known as general liability insurance. It is an important part of every business insurance plan. It includes many things like damage to property, lawsuits, injuries, etc.
There are different types of business liability insurance. The business liability insurance cost differs from business to business. We have mentioned it here. Read the following:
- Small business insurance costs are $40-$80 per month.
- The business liability insurance cost for a medium-sized business is different from the small business insurance cost. It is $100-$200 for a month.
- The business liability insurance cost for high-risk businesses is high. It costs more than $300 per month.
Business owners often think, “How much is liability insurance for a business?” The answer to this question is given here in this paragraph. It is good to have business insurance as it will help in protecting your business in the worst case.
Small Business Insurance Cost Breakdown
People often wonder, “How much is business insurance for small business?” You would be happy to know that you can afford the small business insurance cost. It is affordable when you get the bundle policies. One such example is Business Owner’s Policy (BOP). This policy contains many different policies at a low cost.
The sample breakdown of small business insurance cost:
Freelancers and consultants pay around $30–$60 per month.
Retail stores and cafes pay $80–$150 per month for a BOP.
Contractors or tradespeople pay $120–$300 per month.
Home-based businesses pay as little as $25–$50 per month.
Getting a bundle policy will help you save money by 10-20 per cent.
Tips to Save on Business Insurance Cost
You do not have to spend a lot to protect your business. There are a few tips and tricks that you can use to save on business insurance cost. These are:
Always check with multiple insurance providers. Different insurance providers give business insurance policies at different prices.
You should consider getting bundle policies. A bundle policy has a range of different policies. It will be beneficial for you.
Always try to have a clean business record. Businesses that have clean records pay less for business insurance.
It would be a good idea to pay for business insurance on an annual basis. When you pay annually instead of monthly, you save a lot due to the discounts.
Conclusion
So, how much is business insurance? The answer to this question depends on the type of business, physical risk and coverage. The small business insurance cost is $50-$150 per month. Medium-sized and high-risk business pays more for the insurance.
It is wise to have business insurance for your business. It helps to protect your business from unexpected risks and events. The business insurance cost is worth the protection it offers to your business. It makes sure that your business does not get destroyed completely in the worst-case scenario.
