How Much Does Business Insurance Cost?

Business insurance costs $500 to $3,500 per year for small businesses. Your cost depends on your industry, revenue, employee count, and coverage needs.

$400-$600/yr

General Liability

$500-$3,500/yr

Business Owner's Policy

Varies by State

Workers' Comp

Estimate Your Cost

Business Insurance Cost Calculator

Insurance Types Explained

General Liability (GL)

$400 - $600/yr

Covers third-party injuries, property damage, and advertising injury. Required by most commercial leases and client contracts.

Professional Liability (E&O)

$500 - $1,000/yr

Covers errors, negligence, and malpractice in professional services. Essential for consultants, accountants, and IT firms.

Business Owner's Policy (BOP)

$500 - $3,500/yr

Bundles GL + commercial property + business interruption. Saves 10-20% over buying each separately.

Workers' Compensation

$0.75-$2.50 per $100 payroll

Covers employee work injuries and illness. Mandatory in most states for businesses with employees.

Cyber Liability

$500 - $5,000/yr

Covers data breaches, ransomware, and cyber business interruption. Increasingly required by contracts.

Commercial Auto

$1,200 - $2,400/yr per vehicle

Required if employees drive for business. Covers vehicle damage and third-party injury from business driving.

Cost by Industry

Insurance costs vary 5x or more between low-risk and high-risk industries.

IndustryGLBOP
Consulting$350 - $500$500 - $1,200
Construction$800 - $2,000$1,500 - $5,000
Retail Store$400 - $600$750 - $2,000
Restaurant$500 - $1,200$1,000 - $3,500
Technology$350 - $500$500 - $1,500
Healthcare$600 - $2,500$1,200 - $4,000

What Insurance Do I Need?

Answer six questions to get a personalised recommendation.

Do you have employees?
Do clients visit your location?
Do you provide professional advice or services?
Do you store customer data?
Do you own or lease a commercial space?
Do employees drive for work?

State Requirements Overview

Workers' Compensation

Mandatory in almost every state for businesses with employees. Texas is the only state where workers' comp is optional for private employers. Some states allow exemptions for businesses with fewer than 3 to 5 employees. Several states operate state-run workers' comp funds (Ohio, North Dakota, Washington, Wyoming).

General Liability

Not legally required in most states, but practically mandatory. Most commercial leases, client contracts, and government permits require proof of GL coverage. Standard limits are $1 million per occurrence and $2 million aggregate.

Professional Liability

Required by law for certain regulated professions: doctors, lawyers, architects, engineers, and insurance agents. Even when not legally required, many clients and contracts mandate it for consulting and professional services firms.

Bundle Savings: BOP vs Individual Policies

Individual Policies

$1,500 - $4,000/yr

  • -General Liability: $400-$600
  • -Commercial Property: $500-$3,000
  • -Business Interruption: $500-$1,000
  • -Separate deductibles for each
  • -More flexibility in limits

BOP Bundle

$500 - $3,500/yr (save 10-20%)

  • -GL + Property + Interruption bundled
  • -Single deductible
  • -Simpler management
  • -Can add endorsements (cyber, auto)
  • -Best for small to mid-size businesses

How to Get the Best Rate

1

Get quotes from at least 3 providers

Prices vary significantly between carriers. An independent broker can shop multiple carriers for you.

2

Use an independent broker

Independent brokers represent multiple carriers and can find the best fit for your specific needs.

3

Bundle policies with one carrier

Multi-policy discounts save 5% to 15% in addition to BOP bundle savings.

4

Increase your deductible

Raising your deductible from $500 to $1,000 can reduce premiums by 10% to 20%.

5

Maintain a clean claims history

Businesses with no claims in the past 3 to 5 years qualify for lower premiums.

6

Review coverage annually

As your business grows, your coverage needs change. Annual reviews prevent overpaying or being underinsured.

Frequently Asked Questions

How much does business insurance cost per month?
Business insurance costs $40 to $300 per month ($500 to $3,500 per year) for a typical small business. General liability alone averages about $33 to $50 per month. Your actual cost depends on your industry, revenue, and the types of coverage you need.
What insurance does a small business need?
At minimum, most small businesses need general liability insurance. If you have employees, workers' compensation is mandatory in most states. Professional services firms need professional liability (E&O). Businesses that store customer data should consider cyber liability. A BOP bundles multiple coverages at a discount.
How much is general liability insurance?
General liability insurance costs $400 to $600 per year for a typical small business. High-risk industries like construction pay $800 to $2,000 per year. Low-risk businesses like tech consulting pay $350 to $500 per year.
Is business insurance tax deductible?
Yes. Business insurance premiums are generally tax deductible as ordinary business expenses. This applies to general liability, professional liability, workers' compensation, and other commercial insurance policies.
How much does workers' comp cost?
Workers' compensation costs $0.75 to $2.50 per $100 of payroll on average. Office-based work is the cheapest at $0.10 to $0.30 per $100. Construction can cost $3.00 to $15.00 per $100 of payroll.
What is a BOP and is it worth it?
A Business Owner's Policy bundles general liability, commercial property, and business interruption into one policy for $500 to $3,500 per year. It saves 10% to 20% over buying each policy separately and is worth it for most small businesses with a physical location.
Do I need cyber insurance?
If you store customer data, process payments, or rely on technology, cyber insurance is strongly recommended. It costs $500 to $5,000 per year and covers data breaches, ransomware, and cyber business interruption.
How much is professional liability insurance?
Professional liability (E&O) costs $500 to $1,000 per year for most small businesses. Healthcare and financial services pay $1,000 to $5,000 per year. It covers claims of negligence, errors, or failure to deliver promised services.
What happens if I operate without business insurance?
Without insurance, you are personally liable for lawsuits, injuries, and property damage. A single claim can cost tens of thousands of dollars. Many leases, contracts, and permits require proof of insurance.
How do I get a certificate of insurance?
Contact your carrier or broker to request a Certificate of Insurance (COI). Most issue same-day. Standard requirements are $1M per occurrence and $2M aggregate. Adding a client as an additional insured costs $25 to $100.