The cost of a business owner’s policy, a package of coverages that many businesses require, can start as low as $300 a year, based on our team’s research. But the annual premium your business pays will depend on factors such as your location and industry. The coverages you choose and any endorsements you add will also affect your cost.
We’ll cover the types of business insurance you may need, the factors that affect their cost, and other common questions about getting business insurance so you can find the right one for your budget. Be able to make decisions.
How much is business insurance?
Insurers tailor their business insurance policies to individual businesses, and factors such as the type of coverage can affect prices. However, many business insurance companies quote starting premiums used for low-risk small businesses. Our data shows a range of initial costs for the most common types of business insurance.
| Type of Coverage | Lowest Cost (per year) |
|---|---|
| Business Owner’s Policy (BOP) | $300 to $500 |
| Professional Liability | $300 to $500 |
| General Liability | $200 to $381 |
Here are the lowest premiums that some of the best small business insurance companies charge for a few different types of policies.
| Lowest Annual Premium for Small Business BOP | Lowest Annual Premium for Professional Liability | Lowest Annual Premium for General Liability | |
|---|---|---|---|
| NEXT Insurance | $400 | $300 | $200 |
| CoverWallet | $450 | $500 | $250 |
| The Hartford | $300 | Not disclosed | Not disclosed |
| BiBerk | $500 | $300 | $330 |
| Thimble | Not disclosed | $432 | $263 |
| Hiscox | $500 | $400 | $381 |
Cost is an important consideration when choosing an insurance company, but the cheapest option may not be right for you. Ratings and customer reviews of companies vary, some provide more digital tools than others, and some policies may vary in coverage while others come with required endorsements. All of these factors are important to consider when comparing business insurance quotes.
Factors affecting cost
Industry or profession
How much business insurance costs based on the level of risk your business presents. For example, a construction company or restaurant will have much higher liability risks than a retail store or office. Businesses that use expensive equipment will have higher commercial property costs, and businesses that own and operate vehicles will have additional commercial auto costs. Your business income will also affect the cost of business insurance and whether you qualify for a small business owner’s policy.
Business location
Some locations expose businesses to more risks than others. If your business is in an area prone to natural disasters or high crime rates, you will likely pay more for commercial property insurance than if your business were in a low-risk area. Your cost will also depend on whether you rent or own your space, as well as its size. State regulations, such as workers’ compensation insurance requirements, can also affect your costs.
History of claims
Business insurers check your past claims history to identify trends that may indicate a higher risk to your business. If you have been sued repeatedly, your insurance company may charge you higher premiums because it may assume that your business is not taking proper precautions to avoid the risk.
Number of employees and customers
If your business has employees, you will likely need workers’ compensation insurance. The cost will be based on the number of workers your business employs. Business insurance companies also look at your annual revenue when determining your premium, as serving a large customer base and handling a large amount of inventory naturally exposes your business to more liability and property risks. does.
Coverage requirements
When purchasing a business insurance policy, you’ll choose the coverage options for your business needs, add any necessary endorsements, choose your annual coverage limits, and choose your deductible. Choosing higher annual gross liability limits will increase your premiums, as will choosing a $0 deductible for your property insurance.
Types of Business Insurance
General Liability Insurance:
General liability insurance covers legal fees and judgments in lawsuits related to bodily injury, personal and advertising injury, and property damage resulting from nonprofessional negligence.
Commercial Property Insurance:
Covers reconstruction, repair or replacement of buildings and their contents and equipment, such as fire or vandalism.
Business interruption insurance:
Helps pay ongoing expenses and debts as well as replace lost business income after a covered event, such as a hurricane.
Business Owner’s Policy:
A business owner’s policy is a package of coverages that includes general liability insurance, commercial property insurance, and business interruption insurance.
Professional Liability Insurance:
A professional liability policy covers legal fees and judgments in lawsuits brought by consumers claiming professional negligence, such as wrongful advice or misrepresentation.
Workers’ Compensation Insurance:
Required in most states for businesses with a certain number of employees, workers’ compensation insurance pays for medical bills and lost wages if an employee is injured or ill on the job. It also generally protects the business from employee lawsuits related to injury.
Commercial Auto Insurance:
Commercial auto insurance covers medical bills and property repairs for the other party in an accident, and can also pay for driver injuries and physical damage to a business-owned vehicle.
Hired and Non-Owned Vehicle Insurance:
Works like commercial auto insurance, except it covers personal or rented vehicles driven for business purposes.
Inland Marine Insurance:
Covers inventory and equipment you ship to job sites or customers.
Cyber Liability Insurance:
Cyber liability insurance covers liability, reputation recovery and lost data, lost business revenue, and other consequences of a cyber breach.
How to Save Money on Business Insurance
Compare quotes:
Some insurance providers may offer the coverage you need for less than others. That’s why it’s important to compare business insurance quotes on a site like Tivly before choosing a company. However, keep in mind that price is not the only consideration. Make sure the company has good financial strength and customer satisfaction ratings.
Bundle your coverages:
Many insurers offer bundling when you buy two or more policies.
How much is liability insurance for a business?
The cost of small business liability insurance depends on the type of business you operate, where your business is located, your past claims history, and the limits you choose for your policy. do Some small, low-risk businesses may pay $200 or less per year for general liability insurance and $300 or less per year for professional liability insurance.
How Much Insurance Coverage Should a Business Have?
The Small Business Administration recommends that businesses purchase business insurance for anything they cannot cover themselves.
The U.S. Chamber of Commerce notes that you should insure the full value of your business property and purchase enough liability coverage to protect your assets, which means you have higher limits for sole proprietorships and LLC’s will require less liability coverage.
One of the most popular options for small businesses is a business owner’s policy (BOP) with general liability coverage of $1 million per occurrence and $2 million in aggregate.
Is Business Insurance Needed?
Legal insurance requirements for businesses vary by industry and the city and state where you operate. For most businesses with employees, workers’ compensation insurance is required. Commercial auto insurance is required for businesses that own vehicles and drive or park them on public roads. Professional liability insurance is mandatory for legal and medical professionals in some states.
Is Business Insurance Tax Deductible?
Generally, yes. IRS Publication 535 lists several types of business insurance that you can deduct from your taxable income, including commercial property insurance, health insurance for employees, general and professional liability insurance, workers’ compensation insurance, and Business interruption insurance. However, you cannot deduct certain life insurance and annuity premiums, nor can you deduct self-insurance reserve funds.
What is the business owner’s policy?
A business owner’s policy is a package of small business insurance coverages that can vary from one insurer to another but typically includes commercial property insurance, general liability insurance, and business interruption coverage. A BOP will not cover professional liability insurance; You must purchase this coverage separately.
Do I need International Business Insurance?
If your business operates in foreign countries, you will likely need international business insurance because most policies do not cover events that occur abroad. Whether you have international employees, customers, or suppliers, your exposure to global liability risks makes it necessary to purchase a global insurance policy or multinational endorsement.
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