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How Much Does Business Insurance Cost?

As a business owner, business insurance can protect you against unexpected costs. Follow our guide to find out more about the price of purchasing insurance for your business.

Photo of two business professionals in an office who look like could be discussing insurance topics
December 19, 2022
Chloe Mulliner
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Reading time about 5 min

If you’re a business owner who oversees employees, there’s a good chance you’ll need business insurance. Just like your auto insurance protects you from costs associated with a car accident, business insurance covers unexpected expenses related to incidents, property damage, lawsuits, liability claims, and more.

But what happens if your business doesn’t have insurance? To put it lightly, an unforeseen incident, like a work-related injury or defective product, could wipe out your savings, as you’d need to pay out-of-pocket to cover the damages—from medical bills to lawsuits. Essentially, business insurance prevents you from using your personal and business assets to pay for accidents related to your business.

When making your business plan, it’s crucial to consider business insurance. Not only is it important to have, but in many states, it's required. So, what kind of business insurance do you need? And better yet, what will it cost you? In our guide, we’ll cover everything you need to know about business insurance.

Figuring Out Your Business Insurance Costs

How much does business insurance cost? Well, it depends. Several factors contribute to the total price of your insurance premium, and that will depend on the kind of insurance you purchase. That said, based on our calculations, you could spend anywhere from around $72 to $153 per month per policy.

Below, we’ll dive deeper into small business insurance costs, giving you a better idea of what kind of coverage your company might need, and what you can expect to pay for it.

Types of Business Insurance

There are various types of business insurance policies, and the state you work in may require you to purchase specific coverage. At the bare minimum, you’ll likely need to purchase worker’s compensation if you have one or more employees. But depending on the kind of business you run and where you operate, you may need a combination of these policies.

So, how much will your business insurance policy cost you? In the chart below, we cover some of the most popular business insurance policies and their average related costs.

insurance information and pricing in a table

Other insurance policies you may come across include:

  • Product liability insurance: Provides financial protection against defective products that have caused harm
  • Commercial property insurance: Covers property damage due to factors like vandalism, weather, or civil disobedience
  • Commercial auto insurance: Oversees expenses if your business-owned vehicle is in an accident

What Factors Determine the Price of My Business Insurance?

Someone calculating cost

Now that you’re more familiar with a few of the most common business insurance policies and their prices, let’s discuss some additional factors that could impact the price you actually end up paying.

Your Industry

The risk factor associated with your business is one of the most important elements determining your premium rates. So, how risky is your profession? Are your employees teetering on ladders and operating heavy machinery at construction sites? Or are they typing away on computers in an office space? The riskier your business, the higher your insurance costs.

The Size of Your Business

The number of people your business employs also plays a role in the price of your business insurance. If your company has a lot of employees, you can expect to pay higher rates than a business with fewer or no employees. Why is that? Well, more people means more chances for incidents, and more incidents mean more liability.

The Location of Your Business

If the city where you run your business has higher-than-average claim rates, then, yes, you guessed it, you may face higher premiums. These more expensive insurance costs could be associated with everything from higher crime rates to extreme weather in your city.

Unfortunately, this is one factor you can’t control unless you decide to relocate your business to an area with lower claim rates.

Your Claims History

Has your company recently been hit with a myriad of claims or lawsuits? If so, insurance companies may be wary of doing business with you and raise the cost of your premiums to accommodate these risks. /However, if your business has a squeaky-clean record, you’ll likely enjoy more attractive premiums.

Can I Lower My Business Insurance Costs?

Image/graphic that implies savings or lowering costs.

Now that you have a better idea of how much your start-up business insurance might cost, you’re probably wondering if there are ways to lower your rates. And yes, in some cases, you can score cheaper premiums.

For one, you could try bundling your coverage. If you need to purchase various policies, many insurance providers will offer a package deal at a lower rate. Paying your premium upfront rather than monthly is another way to potentially snag a discount. And finally, investing in the safety of your business and minimizing risks could help lower your rates. Basically, the safer your business appears in the eyes of your insurance company, the better premiums you’ll receive.

Find out More about EZ Texting

Your business insurance costs are just one part of the equation when it comes to running your business. You also need to consider your marketing efforts, in which case, an SMS platform can do wonders for your company. When you implement EZ Texting into your marketing strategy, you can expect higher engagement rates and increased customer loyalty. Contact us today to find out more.

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