How much does business insurance cost?

How much is business insurance? Most small business owners pay about $25 to $75 per month per policy, based on ERGO NEXT customer data.¹ Your small business insurance cost can vary depending on your industry, coverage and level of risk.

Your exact business insurance cost depends on a few key factors, like the type of work you do, the coverage you choose, and how much risk your business has. For example, a consultant may pay less than a contractor, and a business with employees may pay more than a solo owner.

How much does business insurance cost?

Business insurance costs vary, but most small business owners fall within a similar monthly range for many types of coverage. These business insurance rates depend on the type of policy and level of risk.

Business insurance is often made up of different policies that protect against different risks. You might decide to buy a combination of general liability coverage, commercial property insurance and workers’ compensation insurance to protect your business and meet state or local requirements.

If you buy more types of coverage, your total cost will likely go up.

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.

Your deductible, or the amount you pay before your insurance kicks in, can also affect what you pay.

Here’s how business insurance costs break down across common policy types, based on ERGO NEXT customer data. For example, the cost of general liability insurance and professional liability can vary based on your business type, but many fall within similar monthly ranges.

Get an instant quote in about 10 minutes to see your cost for small business insurance.

What does business insurance cost by industry?

Business insurance costs vary by industry because different types of work carry different levels of risk. The cost of commercial business insurance often depends on the type of work your business does.

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

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. Let’s look at some of the factors insurance companies use to determine rates.

What factors impact the cost of your business insurance premium?

Several factors impact the cost of business insurance. These include:

• Your type of business and industry: Higher-risk work and industries usually cost more to insure due to increased chances of claims.
• Your business structure: Insurance for LLCs and corporations may be higher than sole proprietors due to increased complexity and risk exposure.
• Business location: Where your business operates can affect risk levels, local laws and insurance requirements.
• Business size (revenue, number of employees and operations): Larger businesses with more employees or higher revenue typically have more risks and pay more.
• Payroll: Payroll directly affects workers’ compensation costs, since higher payroll usually leads to higher premiums.
• Your claims history: A history of claims may signal higher risk and lead to higher insurance rates.
• Coverage limits and deductibles: Higher coverage limits usually cost more, while higher deductibles can lower your monthly premium.
• The value of your assets: More valuable equipment, inventory or property can raise your insurance costs.
• Your vehicle and driving record: The type of vehicle you use and your driving history 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.

How can you save money on business insurance?

These tips can help you find more affordable business insurance and lower your costs:

1. Bundle more than one policy 

Small business insurance comes in many forms. You may be able to save up to 10% when you bundle certain policies with ERGO NEXT.

Most small businesses bundle coverage based on how they operate, their level of risk and whether they have employees. 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.
• Businesses with employees: May add workers’ comp coverage to help cover workplace injuries and work-related illnesses.
• Businesses that handle sensitive data: Often add cyber insurance to help protect against data breaches or ransomware. 
• 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: May add commercial auto insurance to cover business-related driving.

Taking these steps may help you find cheaper business insurance while still getting the coverage 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 can help lower risk over time:

• Make sure you and your employees are properly trained.
• 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 and figure out 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 save you money, 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 business insurance?

Getting business insurance is easier when you start with a small business insurance quote tailored to your business. With ERGO NEXT, you can get small business insurance online, check prices and explore coverage options in 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.
• Manage your policy 24/7 via web or mobile app.

You can get business insurance from ERGO NEXT 100% online, without needing an insurance agent. But if you have questions, our licensed, U.S.-based insurance advisors are ready to help.