Small business insurance encompasses various coverage types, with costs ranging from approximately $14 to $124 per month. The specific amount you pay depends on the types of coverage you select, such as general liability, commercial property, business interruption insurance, inland marine, cyber liability, and workers’ compensation. If you opt for all these coverage types, you might find yourself paying around $340 per month.

Top Small Business Insurance Providers

1. Clear Blue Insurance
2. CAN
3. Travelers

How Much Is General Liability Insurance?

General liability insurance, a fundamental coverage, typically costs around $30 per month according to a study by Hiscox. The study reveals that 95% of business owners pay less than $50 a month, while only 1% pay over $100. This type of insurance provides financial protection in case your business is held responsible for injuries or damage to someone else’s property.

Factors Affecting General Liability Insurance Premiums:

1. Building Size:

• Larger buildings with more foot traffic may lead to increased premiums due to higher accident probabilities.

• Location:

• Businesses in high-risk areas with elevated crime rates may experience higher liability insurance costs.

• Size of Payroll and Annual Revenue:

• Higher operating costs can result in increased liability insurance expenses.

• Claims History:

• Past general liability claims may contribute to higher premium rates.

• Policy Details:

• Coverage limits, deductibles, and other policy details can impact overall business insurance costs.

How Much Is Commercial Property Insurance?

Commercial property insurance, safeguarding against property theft or damage, costs approximately $63 per month, as reported by Insureon. This figure is based on a standard coverage limit of $60,000 with a $1,000 deductible.

Factors Affecting Commercial Property Insurance Costs:

1. Location:

• Operating in high-risk areas susceptible to natural disasters can elevate insurance premiums.

• Building Age and Size:

• Older or larger buildings incur higher insurance costs compared to smaller or newer structures.

• Types of Fire Protection:

• Investments in fire prevention measures like sprinkler systems and alarms may reduce premium expenses.

• Equipment Costs:

• The presence of expensive equipment on the premises can contribute to higher insurance costs.

• Types of Perils Covered:

• Additional coverage for specific perils like floods, earthquakes, or employee theft may increase insurance expenses.

How Much Is Workers Compensation Insurance?

Workers compensation insurance, essential for businesses with employees, averages $70 per month or $840 per year for businesses with less than $300,000 in payroll costs, according to The Hartford.

Factors Affecting Workers Compensation Insurance Costs:

1. Payroll Size:

• Larger companies with a substantial payroll generally incur higher workers compensation insurance costs.

• Employee Job Duties:

• Riskier job duties result in increased costs. For instance, office jobs may have lower costs compared to hands-on roles like construction or mechanic work.

• Location:

• In some states, such as North Dakota, Ohio, Wyoming, or Washington, state-funded workers compensation is mandatory. However, in other states, businesses can explore private market options for workers comp quotes.

How Much Does Business Interruption Insurance Cost?

The average cost of business interruption insurance typically ranges between $40 and $130 per month or $500 and $1500 per year, as reported by Insureon. This insurance is crucial for businesses facing temporary closures due to covered losses, helping to replace income losses and cover operating expenses during that period. These expenses include lost revenues, mortgage/lease payments, loan payments, taxes, payroll, relocation costs, and training expenses.

Factors Influencing Business Interruption Insurance Costs:

1. Revenue:

• The insurance premium is influenced by the company’s revenue since business interruption insurance covers lost revenue. Higher revenue results in higher premiums to adequately cover losses.

• Industry:

• Certain industries, such as restaurants, more prone to property damage, often face higher premiums for business interruption insurance.

• Property Value:

• The value of your commercial property directly affects the cost of business interruption insurance. Generally, higher property values result in higher premiums.

How Much Does Inland Marine Insurance Cost?

Inland marine insurance, providing coverage during the transit of property or products, typically costs around $14 per month or $169 per year, with $5,000 in coverage being the median choice. Industries like landscaping, cleaning, installation, and construction commonly opt for this coverage.

Factors Influencing Inland Marine Insurance Costs:

• Equipment or Product Costs:

• The primary factor affecting costs is the value of equipment or products being transported. Small business owners with high-value items can expect higher premiums.

How Much Does Cyber Liability Insurance Cost?

The median cost of cyber liability insurance for small business owners is $140 per month or $1,675 per year, according to Insureon. Approximately 27% of businesses pay under $1,000 annually for this coverage. A typical policy has a $1 million per occurrence limit, a $1 million aggregate limit, and a $1,000 deductible.

Cyber liability insurance comes into play in the event of a cyberattack, covering costs related to repairing or rebuilding the business, legal fees, and settlements.

Factors Influencing Cyber Liability Insurance Costs:

1. Industry:

• Industries more exposed to cyber risks may require higher coverage levels, leading to higher premiums.

• Company’s Revenue and Costs:

• Higher revenue, expenses, and operating costs can result in increased cyber insurance premiums.

• Network Security:

• The strength or weakness of your network security practices directly impacts the risk of cyber claims and, consequently, insurance costs.

• Access to Systems and Data:

• The number of individuals with access to systems and data can influence risk levels, affecting premium amounts.

• Claims History:

• Past cyber insurance claims may impact future premiums, reflecting your historical risk profile.

Understanding these factors is essential for businesses seeking adequate insurance coverage tailored to their specific needs and circumstances.

How To Lower Small Business Insurance Costs

Business insurance plays a crucial role in safeguarding companies from costly damages. However, for small businesses, it can become a significant expense. This article explores effective strategies to lower small business insurance costs.

1. Consider a Business Owners Policy (BOP)

A Business Owners Policy (BOP) is a cost-effective solution that bundles three essential coverage types: general liability insurance, commercial property insurance, and business interruption insurance. Purchasing a BOP is generally cheaper than acquiring three separate policies.

2. Tips to Lower Business Insurance Costs

Here are additional tips to effectively reduce business insurance expenses:

Tips	Description
Shop around and compare quotes	Obtain quotes from multiple insurance companies to ensure the best rates.
Bundle policies with the same insurer	Combine multiple policies, such as property and liability insurance, for potential discounts.
Annual premium payments	Opt for annual premium payments instead of monthly to save on overall costs.
Increase your deductible	Consider raising your deductible if you can afford higher out-of-pocket costs in case of a claim.
Risk avoidance	Take proactive measures to avoid risks that could lead to insurance claims.

Average Cost of Small Business Insurance

Understanding the average costs of small business insurance is essential for effective financial planning.

1. General Liability Insurance

General liability insurance, a fundamental policy for small businesses, costs an average of $42 per month or $500 per year.

2. Business Owner’s Policy (BOP)

A Business Owner’s Policy, combining general liability and commercial property insurance, has an average cost of $57 per month or $684 annually.

3. Professional Liability or E&O Insurance

Professional liability or errors and omissions insurance averages $61 per month.

4. Workers’ Compensation Insurance

Workers’ compensation insurance, vital for employee coverage, costs an average of $45 per month.

5. Commercial Umbrella Insurance

Commercial umbrella insurance, providing additional liability coverage, averages $75 per month.

6. Cyber Liability Insurance

Cyber liability insurance, essential for digital risks, has an average cost of $140 per month.

7. Commercial Auto Insurance

Commercial auto insurance, crucial for business vehicles, averages $147 per month.

8. Commercial Property Insurance

Commercial property insurance, protecting business assets, has an average cost of $67 per month.

9. Contractor’s Tools and Equipment

Insurance for contractor’s tools and equipment averages $14 per month.

Understanding Small Business Insurance Cost Factors Factors influencing small business insurance costs include policy limits and coverage specifics.

1. Policy Limits

• Per-Occurrence Limit: The maximum amount the insurer pays for a single claim during the policy period.
• Aggregate Limit: The total amount the insurer pays for all claims during the policy’s lifetime.

Most Insureon customers opt for $1 million / $2 million general liability insurance limits.

2. Deductibles

Ensure the deductible is affordable, as it represents the amount you must pay before insurance coverage activates. The average deductible chosen by Insureon customers for general liability insurance is $500.

3. Coverage Specifics

Select coverage based on your business needs. Consult with a licensed insurance agent to determine the right limits for your business.

Conclusion:

Lowering small business insurance costs involves strategic choices, including policy selection and risk management. By implementing these strategies, businesses can effectively reduce their insurance expenses.