How much does business insurance cost?

How much is small business insurance? Your small business insurance cost can vary depending on your industry, the type of work you do, the coverage you choose and your level of business risk. At ERGO NEXT, some business owners spend as little as $14 per month† for a single policy.¹ Other business owners pay about $25 to $75 per month per policy for affordable business insurance. And some high-risk professions could pay over $100 per month on their business insurance rates.

The price of business insurance depends on which policies you choose, and how many types of insurance you need to protect your business. For example, a consultant who sits at a desk most days usually has less risk (and may pay less) than a construction professional who works with tools and machinery. A large business with multiple employees may pay more than a freelancer or independent contractor.

Jump ahead to learn:

• The lowest cost of business insurance
• How much is business insurance by industry?
• What factors influence business insurance costs?
• 4 tips that could help you save money on small business insurance cost
• How can I get a small business insurance quote?
• Get a quote to see the cost of business insurance for your small business

Business insurance isn’t always a single policy. It is often a combination of different types of insurance policies that protect against different risks. While general liability insurance coverage is the most common, the right mix of insurance protection for your business depends on what kind of business you own, what you do, where you are and a number of other factors. Some industries also require different types of business insurance for licensing, to get a loan, to rent a commercial space, to submit a bid or to sign a contract.

Required or not, business owners usually create a business insurance package, and see their business insurance cost, from a combination of general liability insurance, commercial property insurance, professional liability insurance (also called errors and omissions insurance, or E&O) and workers’ compensation insurance.

The lowest cost of business insurance

How much is business insurance by industry?

Business insurance costs vary by industry because different work requires different types of policies; your cost of commercial business insurance depends on the number of policies you need to help secure your business, and the type of work your business does, amongst other factors.

Here’s what small businesses typically pay per month by industry, based on ERGO NEXT customer data:

The median cost of business insurance per month per industry

Industries with more physical risk or employees typically pay more than lower-risk, service-based businesses. Your actual cost will vary based on your specific circumstances.

This video breaks down pricing for common small business policies, including general liability insurance, workers’ comp insurance and professional liability insurance (E&O).

What factors influence business insurance costs?

Business insurance companies calculate cost based on several factors related to your business, level of risk and coverage choices. These include:

1. Your type of business and industry

Higher-risk work and industries usually cost more to insure due to increased chances of claims. Jobs on other people’s property often have higher insurance premiums due to their higher risk.

2.Your business structure

Insurance for LLCs and corporations may be higher than sole proprietors due to increased complexity and risk exposure. 

3. Your business location

Different states have different regulations and costs. And insurance rates are sometimes higher in densely populated areas that see more claims.

4. Your business size

This includes your business’s revenue, number of employees and operations. Larger businesses with more employees or higher revenue typically have more risks and may pay more. Start up business insurance costs may be lower if the company has fewer employees or limited operations.

5. Your business payroll

Payroll directly affects workers’ compensation costs, since higher payroll usually leads to higher premiums. 

6. Your claims history

Your safety record of losses and history of claims with previous insurance policies could impact your small business insurance rates.

7. Your coverage limits and deductibles

Your coverage limits (or policy limits) could also affect your cost, including:

• The per claim limit — The maximum amount for each insurance claim.
• The aggregate limit — Your maximum annual payout for a policy. 

The deductible you choose, or the amount you pay before your insurance kicks in, can also affect what you pay. Generally, higher coverage limits usually cost more, while higher deductibles may lower your monthly premium.

8. The value of your assets

If you have higher value equipment, inventory or property, this can affect your insurance costs.

9. Your vehicle and driving record

The type of vehicle you use for work and your driving history can both affect commercial auto insurance costs.

Business insurance costs are based on your specific risks, so your price may look different from another similar business in the same industry. Insurance companies also consider external factors like economic conditions and market trends to determine the cost of business insurance.

4 tips that could help you save money on small business insurance cost

These tips can help you find more affordable business insurance:

1. Bundle more than one policy

Small business insurance comes in many forms, and many business owners are either required to have more than one type of insurance coverage, or opt-in for more protection. You may be able to save up to 10% when you bundle some policies with ERGO NEXT.

Here are a few common ways businesses bundle policies:

• Solo businesses and consultants often bundle general liability and professional liability coverage to protect against client claims and mistakes.
• Businesses with a physical location often bundle general liability and commercial property coverage to protect both their space and customer interactions. A Business Owner’s Policy (BOP) combines these coverages, often at a cost savings.
• Businesses with employees are required to add workers’ comp coverage in most states to help cover workplace injuries and work-related illnesses.
• Businesses that handle sensitive data often add cyber liability insurance to help protect against data breaches or cyber attacks. 
• Higher-risk or hands-on businesses may combine multiple policies, like general liability, workers’ compensation and commercial property, for broader protection.
• Businesses that drive for work, such as cleaners or real estate agents, may add commercial auto insurance to cover business-related driving.

Taking these steps may help you find cheaper business insurance while you still get the protection your business needs.

2. Lower your risk level

A safety and training plan can help prevent accidents that might increase your insurance premium. A few simple steps could help lower your risk over time, including:

• Make sure you and your employees are properly trained for every job.
• Focus on work that you know how to do.
• Don’t do jobs you’re not trained to do.
• Make sure you have coverage for the work that you do.
• Keep your business or job site secure.
• Keep your business and work area clean so no one trips on cords, furniture, equipment or tools.
• Take steps to mitigate property damage and injuries from extreme heat, rain, wind, snow and inclement weather.

3. Learn from your previous claims history

Analyze your previous claims history to learn what you could have done to avoid those risks. Reviewing past claims can help you spot patterns and make changes that may reduce future risk.

4. Pick the right limits and deductible 

Lower limits will usually save on the cost of your business insurance, but you’ll have a higher risk of financial loss if you don’t have enough business insurance coverage. 

Choosing a higher deductible may lower your monthly rates — and your total annual premium —  but it also means you’ll pay more out of pocket if you file a claim.

How can I get a small business insurance quote?

Start with a small business insurance quote tailored to your business. With ERGO NEXT, you can get small business insurance 100% online in about 10 minutes.

We’ll ask a few basic questions about your business and use your answers to build a customized quote. Your actual cost depends on details like the work you do, where you operate and the coverage you choose.

Once you buy your policy, you can:

• Adjust the limits or choose additional recommended coverage at any time.
• Get instant access to your certificate of insurance (proof of insurance) to download or share, and add an additional insured.
• Manage your policy 24/7 via web or mobile app.

Get a quote to see the cost of business insurance for your small business

ERGO NEXT makes it fast, easy and affordable to protect your small business — and you can do it all online.

We’ll ask a few questions about your business and give you a quote. You can select your coverage options and buy your policy in about 10 minutes. Share your certificate of insurance at no extra cost, and you can access your policy 24/7 via web or mobile app.

If you have questions, our licensed, U.S.-based insurance professionals are available to help.

Start a free quote with ERGO NEXT.