How Much Does Small Business Insurance Cost?

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Small business insurance costs anywhere from $14 to $124 per month, depending on what type you buy – general liability, commercial property, business interruption insurance, inland marine, cyber liability and/or workers compensation. If you buy all these models, you can pay about $340 per month.

Here’s an overview of how these costs break down and what makes the prices so great when shopping for the best small business insurance.

Business Damage Insurance in a Nutshell

General Liability Insurance cost

General insurance protects you from lawsuits or claims if someone is injured on your property, or you are responsible for damage to someone else’s property. It typically costs $30 a month, according to a recent Hiscox survey. The survey also found that 95% of business owners pay less than $50 a month, and only 1% pay $100.

What factors affect insurance premiums?

These four factors have a major impact on total insurance premiums:

  • The size of the house. Large buildings create more opportunities for accidents to happen. So if you work in a larger area with a lot of traffic, you can pay more.
  • Place. Businesses operating in areas with high risk and crime rates may pay higher insurance premiums.
  • Salary growth and annual income. The higher your expenses or operating costs, the more you can expect to pay for insurance.
  • Historical history. If you have filed many complaints in the past, it may increase your payout.
  • Details of the process. Coverage limits, deductibles and other legal factors affect the cost of your insurance.

Cost of Commercial Insurance

Commercial property insurance protects your business from damage caused by fire, natural disasters, theft or other problems.

The average cost of commercial insurance is $63 a year, according to Insureon. This is for a maximum limit of $60,000 and a $1,000 deductible.

Insureon found that nearly half (42%) of business owners pay between $46.67 and $83.33 per month for commercial insurance, while 16% pay less than $46.67.

What factors affect the cost of commercial property insurance?

Several factors can affect the cost of commercial property insurance:

  • Place. Working in areas that are at high risk of natural disasters can increase wages.
  • Building age and growth. Insuring older or larger homes costs more than insuring smaller or newer homes.
  • Types of fire protection. Having a sprinkler system, fire alarms and easy access to the fire station can reduce your utility bills.
  • Equipment price. Commercial property insurance covers items that are lost or damaged on your premises, so expect to pay more if you have expensive equipment.
  • Types of risks involved. Just like home insurance, you’ll pay more if you want to cover other perils for your business, such as floods, earthquakes or employee theft.

Cost of Business Interruption Insurance

If your business has to be temporarily closed due to a policy loss, business interruption insurance can help restore your income and cover operating costs during that time. This includes lost income, mortgages, rent or lease payments, loan payments, taxes, wages, moving expenses and training expenses.

The average cost of business interruption insurance is between $40 and $130 per month, or $500 and $1500 per year, according to Insureon.

What factors affect business interruption insurance rates?

Three main factors can affect business interruption insurance rates:

  • Money. Since business interruption insurance results in lost income, the company’s income increases, so the insurance premiums increase.
  • Companies. Industries, like restaurants, are prone to property damage and pay the highest business interruption insurance.
  • The value of your business assets. Generally, the higher the value of your business property, the more you will pay for business interruption insurance.

Cost of Inland Marine Insurance

Inland Marine insurance protects your business if something happens to your cargo or goods while in transit. This may include goods sent to or from your business, or goods used at work (such as lawnmowers or camera equipment).

The average cost of marine insurance is $14 a month or $169 a year, according to Insureon. This is for a limit of $5,000.

Insureon found that a limit of up to $5,000 is a popular choice among its customers for those in the landscaping, cleaning, installation and construction industries.

In comparison, photographers and videographers usually choose a limit of $86,000 (which has an annual income of $580), while architects and engineers buy a higher limit.

What factors affect the cost of marine insurance?

There is one major factor that affects marine insurance: Materials or cost of goods. Small business owners who need to transport expensive materials or equipment should expect to pay more.

Cost of Cyber ​​Liability Insurance

Cyber ​​liability insurance protects a business from financial damage that can occur as a result of a cyberattack. This type of insurance can cover costs associated with repairing or rebuilding your business after a cyber attack, as well as fines and debt recovery.

The average cost of cyber insurance is $123.75 per month or $1,485 per year, according to AdvisorSmith. But companies can pay as little as $650 a year or up to $2,357, depending on their industry.

For example, AdvisorSmith found that companies in the financial services, financial services, commercial services, legal and insurance industries pay the most for cyber insurance. The transportation and logistics companies, administrative services, manufacturing, car dealerships and factories pay less.

What factors affect cyber insurance rates?

There are several factors that affect the cost of cyber insurance:

  • Companies. Companies exposed to cyber risk may need policies with higher levels of coverage and, therefore, higher costs.
  • Money is your company’s money. Your income, expenses and operating expenses are what you can expect to pay for cyber insurance.
  • Security of your network. Strong network security measures, or the lack thereof, affect your vulnerability to cyber attacks.
  • The number of people who have access to your system and data. Freedom of access can mean more risk, leading to higher costs.
  • History of your claims. Past cyber insurance claims can affect future cyber insurance premiums.

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 often helps cover 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, according to The Hartford.

In most states, you are legally required to have workers’ compensation if you have at least one employee. But labor laws vary from state to state. For example, it is not necessary if you operate in Alabama with fewer than five employees or in Arkansas with fewer than three employees. Workers’ Comp insurance is not required in Texas or Wyoming.

What factors affect the cost of workers’ compensation insurance?

Three main factors affect the cost of labor:

  • The size of the salary. The bigger your company and the bigger your payroll, the more you can expect to pay for workers’ compensation insurance.
  • Employee duties. Expect to pay more for workers with risky jobs. For example, the fees for office services are lower than for manual services such as construction or mechanical engineering.
  • Place. If you live in a private state, such as North Dakota, Ohio, Wyoming or Washington, the law requires you to hire state-paid workers. You have no other options. But in some states, you can shop around the market workers.

For all six plan types above, expect to pay about $340.75 per month, or $4,090 per year, on average.

How to Lower the Cost of Business Insurance

Commercial insurance is an important way to protect a company from costly damages. It can be devastating, especially for small businesses.

One of the best ways to save is to buy a business owners policy (BOP). BOP includes three basic types: general insurance, business insurance and business interruption insurance. It is often cheaper to buy a BOP instead of three different points.

Here are some tips for reducing the cost of business insurance:

  • Shop around and compare quotes from many insurance companies.
  • Combine several policies together from one insurance, such as property and loan insurance.
  • Pay your bills annually instead of monthly.
  • Raise your deductible – if you can afford the out-of-pocket costs you’ll pay to file a claim.
  • Avoid the dangers that can lead to regret.

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