How Much Does Small Business Insurance Cost?  (2024)

More than 1 in 10 Americans runs a small business, according to the Bureau of Labor Statistics. If that’s you, it’s important to make sure an unforeseen disaster will protect all your hard work.

Small business insurance, which can cost as little as $20 a month, may save you from trouble like customer lawsuits or damage from fire or storms.

Of course, not all businesses need insurance. Freelancers and solopreneurs who work from home may have few assets they need to insure. On the other end of the scale, very large businesses may be able to self-insure, that is, count on their own assets to cover unforeseen costs.

Still, for millions of businesses in between these two extremes, insurance can be a smart way to avoid unnecessary risks. “It’s difficult to recover from a loss without adequate insurance protection,” said Mark Friedlander, the director of corporate communications with the Insurance Information Institute

Here’s a rundown of what small business insurance costs—and what’s covered.

Typical costs for small business insurance policies

We requested quotes from 12 price comparison sites and small business insurers in 2024. Based on our research, we found that rates ranged from $25 to $165 per month for basic liability coverage. Your actual cost will depend on the type of policy you need, the selected coverage limits, location and industry.

*Rates based on estimates from 12 insurance companies and marketplace comparison sites for standalone policies for small businesses with fewer than 50 employees

Business owners’ policies (BOPs)

Cost: $40 to $115 per month

A BOP, or business owner’s policy, is a type of insurance product that combines several forms of coverage into one policy. With most insurers, BOPs include the following:

• Property insurance for your buildings and equipment.
• Liability protection to cover your legal responsibility for any injuries or damages your business causes.
• Business interruption insurance to replace a portion of your income that’s lost due to closures after a fire or other disaster.

BOPs can make sense for small to midsize businesses since BOPs are cheaper than buying each type of coverage separately. Typically, businesses need to have fewer than 100 employees and less than $5 million in revenue to qualify for a BOP.

Commercial auto

Cost: $125 to $575 per month

If you or your employees drive vehicles that your business owns or you transport clients or inventory, you’ll likely need a commercial auto insurance policy. At the very least, your policy will have to meet state-minimum liability requirements, but you may need additional coverage—including collision and comprehensive insurance—to adequately protect your vehicle and business.

If you’re a ride-share driver for a service like Uber or Lyft, you may need different coverage than a commercial auto policy. Because you use a personal vehicle occasionally for work, you may need a specialized ride-share policy. Adding ride-share insurance to your personal auto policy will increase your premiums by $5 to $20 per month, according to The Zebra, an insurance comparison site,

Cyber insurance

Cost: $40 to $145 per month

Cyber insurance provides protection in case your business is involved in a lawsuit after a data breach. It’s a critical insurance product if you process online payments or store customer information digitally.

Cyber insurance is often available as an add-on to a BOP or other business insurance policy for a relatively low cost—as low as $25 per month—but you can also purchase a stand-alone policy if you don’t need other coverage or if your insurer doesn’t offer a cyber insurance rider.

General liability

Cost: $25 to $115 per month

General liability insurance provides you with protection in case your business is sued and found liable for injuries or damages caused by your business, services or employees. For example, general liability insurance would cover the cost of medical expenses for a customer who slips and falls while visiting your store, or the cost of damages your contractor causes while fixing the plumbing on a client’s home.

Professional liability

Cost: $45 to $165 per month

Professional liability insurance, also known as errors and omissions, or E&O, coverage, is a type for small businesses that provide professional services, including making recommendations or giving advice. For example, financial advisors who provide financial or investment advice may need E&O coverage to protect against lawsuits that allege their clients lost money due to professional negligence or fraud.

Property insurance

Cost: $60 to $190 per month

Property insurance compensates you if your business’ buildings, equipment or supplies are damaged by fires, storms or theft. This form of coverage also protects other business supplies, such as furnishings or electronics.

Workers’ compensation

Cost: $35 to $120 per month

In most states, workers’ compensation insurance is the only one small businesses are required by law to have. Workers’ compensation insurance is necessary if you have employees; it pays for the worker’s medical care and replaces a portion of their wages if they are injured while working.

The cost of coverage depends on the total combined payroll amount, location and industry.

How to get affordable small business insurance

The cost of small business insurance varies by your business size, industry and the type of coverage you purchase. In general, policies range from $50 to $250 per month.

If you’re a small-business owner looking to manage costs (and who isn’t?), here are some ways to save money on your commercial insurance policy:

Ask about discounts

Some insurers offer discounts for small-business owners, such as discounts for bundling multiple types of commercial insurance or certain business structures For example, Farmers Insurance offers a 15% discount for businesses that are corporations.

Or if you have a commercial auto policy, you may qualify for a discount by adding a telematics device to your business vehicles. These devices track vehicle usage and driver habits, so safe drivers can save money.

Pay annually

Instead of paying your premiums monthly, you may be eligible for a discount by paying for your policy annually. For example, Progressive offers a discount of 15% on commercial auto insurance policies that are paid for upfront.

Increase your deductible

As with other forms of insurance, small business insurance policies have a deductible—the cost you have to cover before your insurer will cover the expense after a covered incident. Increasing your deductible will cause your premiums to decrease. For example, we found that adjusting our deductible from $0 to $1,000 on a professional liability policy reduced our premiums by about $10 per month.

Shop around

We found that premiums varied significantly by insurer; in some cases, the premiums of some companies were double the rates of others for the same coverage limits.

If there are several small business insurers licensed in your state, that competition can work in your favor.

“Some states have more insurance options, which can help create more pricing competition, which usually benefits the customer,” said Effi f*cks-Leichtag, chief product officer of NEXT Insurance.

Companies will have to compete by offering more competitive rates or discount programs to appeal to customers, and getting quotes from several small business insurance companies can help you find the most affordable coverage.

“As a general rule, small-business owners should get business insurance quotes from at least three different carriers,” said Friedlander.

If you’re short on time or aren’t sure what kind of coverage you need, Elliot Richardson, the co-founder and president of the Small Business Advocacy Council, says small-business owners should seek out help.

“My recommendation is for any business owner, whether a solopreneur or the owner of a sizable company, to consult an insurance broker,” Richardson said. “[They will] explain all facets of the business and work together to ensure the business has the right type of coverage and adequate policy limits.”

Brokers may be able to help you find cheaper rates than you’d find on your own, but be aware they often work on commission or charge fees. Ask about any fees or financial incentives the broker may receive to avoid unexpected costs.

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