One of the best steps you can take for your small business is to get it insured. Small businesses can save you from a whole lot of risk while giving you a lot of value. If you have been asking a question, how much does small business insurance cost? this article will contain all the information that you have been searching for.
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How Much Does Small Business Insurance Cost
The cost of small business insurance can be between $600 to $1200 per month or more. This price depends on a lot of factors including the size of your business, the number of employees, insurance needs, etc. more of these factors will be explained in the latter part of this article. Keep reading to get the full information.
How Much Does Small Business Insurance Cost Per Month
We have decided to put the various costs every month. The list below contains the prices of small business insurance according to estimates compiled from the 2022 data from insurance companies including Progressive, Hartford, and Insureon.
General Liability Insurance: $65–$88/Month
This type of insurance covers bodily injury, property damage, and reputational harm. This includes claims of slander, libel, or copyright infringement against your business.
It is more like a business version of homeowners insurance. General liability insurance is not typically mandated by the law. You are often required to obtain specific licenses and contracts.
This insurance costs between $65 to $88 per month.
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Professional Liability Insurance: $56–$117/Month
This insurance is for businesses that offer business advice or services. It is also called errors and omission insurance. This insurance protects you against work performance claims, errors omissions, and negligence.
A good example is a realtor is a that fails to note the mold in a basement. Such a person can be liable for damages. The average professional liability insurance cost ranges from about $56 to $117 every month.
The requirements for having or purchasing this insurance vary from state to state.
Workers’ Compensation Insurance: $70–$111/Employee/Month
This type of insurance is the insurance that provided benefits and the wages that were lost if one of your employees has sustained an injury in the workplace. Most states will require small business owners to get workers’ compensation insurance coverage when they hire their first employee.
The cost of workers’ compensation insurance depends on payroll, your premium increase as you hire more employees. This insurance costs between $70 to $111 per employee per month.
Commercial Auto Insurance: $135–$188/Month
This type of insurance covers accidents for business vehicles. Every state requires it except New Hampshire and Virginia.
The average cost of having Commercial auto insurance is between $135 to $188 per month.
Business Owner’s Policy: $99–$261/Month
Business owner’s insurance covers the protection of general liability insurance and commercial property insurance in a single plan. The specifics of this plan differ depending on the offerings of your providers.
Additionally, it also offers coverage for accidents, emergencies, thefts, and vandalism on your property.
The average cost of the business owner’s policy ranges from $99 to $261.
What Determines Business Insurance Costs?
The factors that determine the cost of your small business insurance are;
- Business size and number of employees
- Claims history
- Location
- Industry
All the costs described above are averages. Some premiums may cost above or below that range. More explanations of these factors are given below;
Business Size and Number of Employees
The larger your business grows, the more you can expect to pay for business insurance coverages. For every single type of sale you make, the employee you hire, and the asset you acquire (including vehicles and property) gives a new opportunity for something wrong to happen; your insurance costs will reflect this.
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Claims History
If your business has made many claims in the past and this is noticed by your insurance company, the company may see you as a high-risk client and raise the monthly rate of your insurance claim. To avoid getting into this position, implement and follow safety precautions to lessen the risks of accidents or losses in your business.
Location
Location is another vital factor that influences the price of small business insurance. For some states, you will be required to purchase certain types of insurance that are optional in other states. A good example is Oregon. In Oregon, you must have professional liability insurance. You will also encounter higher business costs in areas of higher risk and places where business operations are expensive.
Industry
Another thing that will affect the cost of business insurance is your type of industry. In different industries, there are different risks. Businesses in industries having higher risks of injury will most likely pay more money for business insurance.
Things To Consider When Choosing Business Insurance
Now you know the various types of insurance and their various costs, it is right to know what best to consider when choosing business insurance. The factors below are what you should consider
Your Business Needs
Your business insurance should depend on the needs of your business. Different types of businesses have different levels of risk. Access the risk level of your small business and what type of coverage will protect it. you may need the help of an insurance broker here.
Get Multiple Quotes
You will only get a one-sided view if you get quotes from just one provider. The best step to take when shopping for business insurance quotes is to get quotes from different providers. When you have done that, you can now choose which has the best price and quality for your business.
Bundle Up
Business Insurance plans with features from different insurance types are offered by so many providers. It is very adjustable to choose from such plans. A good example of such plans is a business insurance policy that combines general liability insurance with commercial property insurance
The Small Business Insurance Cost Calculator
There are several small insurance business calculators online. You can use this calculator to know what exactly your quote should cost. A good example of this online calculator is given on the page below;
www.thimble.com/blog/business-insurance-calculator
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Business Insurance Costs FAQ
How Much Does General Liability Insurance Cost
According to various research, general liability insurance typically costs about $30 a month or even. It was also found that about 95% of the surveyed small business owners pay less than $50 per month for general liability insurance, and 1% of small businesses pay more than $100 per month.
How Much Should I Budget for Business Insurance?
The prices of small business insurance vary depending on the needs of your business and its risk exposure. You can start with $65 per month for general liability insurance and after a while, consider what other types of insurance you might need.
What Insurance Should You Get When Starting a Business?
When you are starting a business, it is advisable to start with general liability insurance, workers’ insurance if you have employees, and auto insurance if your business requires vehicles. After handling all these, consider what your business will need and focus on that.
Is Business Insurance A Start-Up Cost?
Of course, it is, business insurance is very important for all start-ups because it is important for the normal operations of a business. Your fees may be very small when you start especially if you have no employees.
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