Small business insurance is no longer optional—it is a necessity for protecting your company from financial risks, lawsuits, property damage, and unexpected losses. One of the most common questions business owners ask is: how much is small business insurance?
The cost of small business insurance depends on multiple factors such as business type, size, location, coverage limits, and risk exposure. In this guide, we will break down small business insurance costs, coverage types, average pricing, and tips to get cheap small business insurance without compromising protection.
What Is Small Business Insurance?
Small business insurance is a collection of insurance policies designed to protect businesses from common risks such as property damage, liability claims, employee injuries, cyberattacks, and income loss.
How Much Does Small Business Insurance Cost?
On average, small business insurance costs between $40 to $100 per month, or $500 to $1,200 per year. However, this amount can increase or decrease depending on your business profile.
Average Small Business Insurance Costs (Monthly)
| Insurance Type | Average Cost |
|---|---|
| General Liability Insurance | $40 – $70 |
| Professional Liability Insurance | $50 – $90 |
| Business Owner’s Policy (BOP) | $60 – $120 |
| Workers’ Compensation Insurance | $70 – $150 |
| Commercial Property Insurance | $60 – $100 |
| Cyber Liability Insurance | $40 – $90 |
Factors That Affect Small Business Insurance Cost
1. Type of Business
High-risk industries like construction, manufacturing, and healthcare pay higher premiums than low-risk businesses like consulting or online services.
2. Business Location
Insurance costs are higher in areas prone to natural disasters, high crime rates, or lawsuits. For example, small business insurance in the USA varies by state.
3. Business Size & Revenue
More employees and higher annual revenue increase your insurance cost due to greater exposure to risk.
4. Coverage Limits & Deductibles
Higher coverage limits mean higher premiums. Choosing a higher deductible can lower your monthly insurance cost.
5. Claims History
Businesses with previous insurance claims are considered higher risk and pay more.
Types of Small Business Insurance and Their Costs
1. General Liability Insurance
Cost: $40–$70/month
This is the most essential coverage. It protects against third-party bodily injury, property damage, and legal expenses.
High-CPC keywords:
- small business liability insurance cost
- general liability insurance for small business
2. Business Owner’s Policy (BOP)
Cost: $60–$120/month
A BOP bundles general liability and commercial property insurance at a discounted rate.
Why it’s popular:
It offers comprehensive protection at a lower cost—ideal for startups.
3. Professional Liability Insurance
Cost: $50–$90/month
Also known as errors and omissions insurance, it protects service-based businesses from negligence claims.
4. Workers’ Compensation Insurance
Cost: $70–$150/month per employee
Required by law in most states, it covers medical expenses and lost wages for injured employees.
5. Commercial Property Insurance
Cost: $60–$100/month
Protects your building, equipment, inventory, and furniture from fire, theft, and natural disasters.
6. Cyber Liability Insurance
Cost: $40–$90/month
Essential for online businesses handling customer data. It covers data breaches, hacking, and ransomware attacks.
High-CPC keyword: cyber insurance for small business
How Much Is Small Business Insurance Per Year?
Most small businesses pay $500 to $3,000 per year, depending on coverage. Businesses with higher risk exposure may pay $5,000+ annually.
Estimated Annual Costs
- Freelancers & Consultants: $400–$900
- Retail Stores: $800–$2,500
- Restaurants: $2,000–$6,000
- Contractors: $1,500–$5,000
How to Get Cheap Small Business Insurance
1. Compare Multiple Insurance Quotes
Never settle for the first offer. Always compare small business insurance quotes online.
2. Bundle Policies
Choose a Business Owner’s Policy to reduce overall costs.
3. Increase Deductibles
Higher deductibles reduce monthly premiums.
4. Improve Risk Management
Safety training, security systems, and cyber protection can lower premiums.
5. Choose Only Required Coverage
Avoid unnecessary add-ons that increase costs.
Best Small Business Insurance Providers (Popular Options)
- Hiscox
- Next Insurance
- The Hartford
- State Farm
- Nationwide
These companies are known for affordable pricing and flexible commercial insurance policies.
Is Small Business Insurance Worth the Cost?
Absolutely. One lawsuit or accident can cost thousands—or even millions—of dollars. Paying a small monthly premium protects your business from financial ruin.
Without insurance, you risk:
- Legal fees
- Medical expenses
- Property replacement costs
- Business shutdown
Final Thoughts
So, how much is small business insurance?
For most businesses, it is affordable and scalable—starting as low as $40 per month. The cost depends on your business size, industry, location, and coverage needs.
Investing in the right small business insurance coverage is not an expense—it’s a smart financial decision that safeguards your future.
If you’re serious about protecting your business, start comparing small business insurance quotes today and choose a policy that fits both your budget and risk profile.
