Cheap Business Insurance Options for Small Businesses

For small businesses, finding affordable business insurance can be a challenge. According to our research, the average cost of business insurance in the US is around $1,000 to $2,000 per year.

You can save money by shopping around and comparing quotes from different insurance providers. This can help you find the best deals and discounts.

Some insurance companies offer specialized policies for small businesses, such as liability insurance and property insurance. These policies can be tailored to meet the specific needs of your business.

By choosing the right insurance policy, you can protect your business from unexpected events and financial losses.

The cost of business insurance can vary greatly depending on several factors, including your industry, business operations, and location. The average cost of a general liability insurance policy is around $42 per month or $500 per year, making it the least expensive type of small business insurance.

A business owner's policy (BOP) provides financial protection against common lawsuits and property losses, and can be purchased for around $57 per month or $684 annually. However, costs can range from $25 to $165 per month for basic liability coverage, depending on the type of policy and coverage limits.

Here are some typical monthly premiums for small business insurance policies, based on research from 12 price comparison sites and small business insurers in 2024:

Keep in mind that these are just estimates, and your actual cost will depend on the specifics of your business and the insurance policy you choose.

The cost of business insurance can vary significantly depending on several factors. The type of policy you need is one of the biggest factors, with general liability insurance being the most affordable option, costing as little as $25 per month for basic liability coverage.

Your industry and business operations also play a role in determining your insurance costs. For example, a manufacturer may pay more for insurance than a service-based business. The size of your business is another factor, with larger businesses typically paying more for insurance.

The value of your business property and its condition also impact your premiums. Businesses with higher revenue and more employees also pay more for insurance. Your business experience and structure can also affect your insurance costs, with more experienced businesses and those with a good claims history paying less.

Here are some typical monthly premiums for different types of business insurance policies:

Your deductibles can also impact your premiums, with lower deductibles increasing your costs.

The cost of your business insurance is affected by the amount and circumstances of your policy payouts. A commercial auto insurance policy with comprehensive coverage costs more than one with only the state minimum requirement.

A general liability policy with a higher aggregate limit, such as $3 million, will have higher premiums compared to one with a lower limit, like $1.5 million. This is a key factor to consider when choosing your policy limits.

Increasing your deductible can lower your premiums. For example, adjusting the deductible from $0 to $1,000 on a professional liability policy reduced premiums by about $10 per month.

The average deductible selected by Insureon customers for general liability insurance is $500. This is a good idea to keep in mind when choosing your deductible.

Here are some common deductible amounts for general liability insurance:

Keep in mind that if you can't afford the deductible, your insurance won't activate to cover your liability claim. So, it's essential to choose a deductible that you can easily afford in a crisis.

General liability insurance is a must-have for many small business owners, but it's not a one-size-fits-all solution. It's included in many business insurance packages and can help cover risks like property damage and bodily injury.

Some businesses are required to have general liability insurance to get professional licenses or work on certain jobs. Construction trades, for example, often need it to protect against injury to other people and property damage.

General liability policies can also help cover medical payments and lawsuit expenses, which is especially important for businesses like food establishments that worry about slip-and-fall accidents. Liquor liability and workers' compensation can also be added for more coverage.

Retail business owners can benefit from the protection general liability provides for customer injuries, and it can also include some protection for product liability coverage. Personal trainers might need to be a policyholder for some professional certifications, and it can be required if they work at a gym.

General liability business insurance can protect cleaners from financial losses if they accidentally break or damage property at a job. If you want to rent commercial property, you might also be required to have coverage as part of your commercial lease.

Other types of liability coverage, like professional liability insurance, can help protect your business from losses after a professional mistake. Depending on your industry, you might also benefit from product liability insurance or liquor liability insurance.

Most states require workers' compensation if you have employees, which can help cover medical expenses and lost wages after an employee's workplace accident. Commercial property insurance can also help pay for a replacement or repair for your business property.

Business Owners Policy (BOP) is a cost-effective insurance policy that combines coverages like business liability, commercial property, business income, and crime insurance into one package for businesses. BOP policies can be general or personalized to meet your business's industry-specific needs.

General liability insurance can help protect you from the financial loss that results from property damage, bodily injury, and medical expenses, as well as attorney fees. Workers' compensation insurance can help cover medical expenses and rehabilitation costs for employees who experience an occupational injury or illness.

Commercial property insurance helps businesses protect against the loss or damage of company property from causes like fire, explosions, wind, and hail. Commercial auto insurance can help cover injuries and damages caused by you or your employees while driving.

Business and industry play a significant role in determining the cost of business insurance. Your industry is a top consideration for insurance companies, and they take into account any risks that might increase the chance of an expensive claim.

For example, businesses in high-risk industries like healthcare and finance may pay more for cyber insurance to cover costs in the event of a data breach or cyberattack. Similarly, retailers and restaurants that depend on a physical location to conduct business may face bigger losses in the event of a forced closure from a fire or storm, leading to higher premiums for business interruption insurance.

Some industries, such as construction and cannabis, are often required to carry general liability insurance. Businesses in these industries should factor this requirement into their insurance costs.

Your industry plays a significant role in determining your insurance costs. Businesses in high-risk industries are more likely to file claims, leading to higher premiums.

General liability insurance costs are higher for businesses that engage with the public, such as retailers, but lower for consultants who work on their own. This is because they're more likely to be involved in third-party bodily injuries and property damage.

Commercial auto insurance costs depend on the type of driving you do. Trucking businesses, for example, can expect to pay more for this coverage than small businesses that own a company car.

Professional liability insurance costs also depend on the type of professional services or advice you provide. If other businesses like yours have a history of claims, that means increased costs for your business too.

Businesses that store sensitive information, such as medical records or credit card numbers, may need to pay more for cyber insurance. This is also true for IT consultants and tech companies that need specialized policies to protect against data breach lawsuits.

Here are some examples of industries with higher insurance costs:

Having business liability insurance can be a game-changer for your job prospects. It shows clients that your business is trustworthy and responsible.

Many larger clients require coverage before signing a contract with you, so having insurance can give you a competitive edge. This means you'll have a better chance of landing bigger clients and more lucrative projects.

Having business liability insurance can also help you stand out from the competition, especially if a potential client has a choice between your business and another that doesn't have insurance.

Most small businesses have only one employee, with 57% of them being sole proprietors, independent contractors, and freelancers.

Business insurance premiums may be lower for companies that have been in business for many years without making a claim.

When you're running a business, it's essential to understand how your payroll and sales impact your insurance costs.

Your annual payroll size directly correlates to the cost of workers' compensation insurance. Insurers use revenue to determine general liability insurance costs, assuming that the more customers you have, the higher the risks.

As a business owner, you need to consider the correlation between your payroll and sales to make informed decisions about your insurance coverage.

Business location can significantly influence the cost of business insurance. For example, businesses in areas with high crime or increased foot traffic may pay more for insurance that covers theft or customer accidents.

Some states and cities require specific insurance policies to operate a business. For instance, most states require workers' comp insurance for businesses with employees, while many states require commercial auto insurance for business-owned vehicles.

Businesses operating in certain locations may need specific policies to obtain licenses or work in specific settings. For example, businesses in real estate, insurance, or healthcare may need professional liability insurance to get licensed in their state.

Here's a list of states that require workers' comp insurance for businesses with employees:

Compliance is a crucial aspect of running a business, and your location plays a significant role in it. State laws can dictate the type of insurance you need to have, and some states and cities will only give you a business permit if you have an active general liability insurance policy and a certificate of insurance.

Some states require workers' comp insurance for businesses with employees, and most states require commercial auto insurance for business-owned vehicles. This means you'll need to factor these costs into your business plan.

If you're in a specific industry like real estate, insurance, or healthcare, you may need professional liability insurance to get licensed in your state or work in a specific setting like a hospital. This is a requirement, not an option.

Here's a list of states that require workers' comp insurance:

Remember, compliance is not just about following the law; it's also about maintaining a good reputation and protecting your business.

When you're looking for a commercial space to lease, there are certain requirements you'll need to meet. Your commercial lease might require it, especially if you plan to lease commercial space.

Property owners may ask to see your certificate of insurance, which is often required for business liability. This shows you have financial protection to cover expenses related to customer injuries at your leased space.