How much does Commercial Property Insurance cost?

Learn about commercial property insurance cost — and how to lower your annual small business premium.

Karen Solomon
By Karen Solomon
Published Apr 15, 2024
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Your small business could benefit from commercial property insurance to help protect your physical space, gear, goods, inventory, equipment and infrastructure (such as HVAC). But can you afford it? What’s an average business property insurance policy cost? And most importantly, what will commercial property insurance cost you?

To investigate further, dive deep into commercial property insurance coverage, try the NEXT calculator to see your specific monthly or annual cost, or get a free quote.

Or, jump ahead to learn:

What does Commercial Property Insurance cost?

NEXT commercial property insurance policyholders can pay an average annual premium of $538 (about $45 per month) and a median premium of $452 a year (or $38 per month).*

About half of NEXT policyholders pay $25-$75 per month on commercial property insurance.
  • About half of NEXT policyholders pay $25-$75 per month on commercial property insurance.
  • The lowest premium for NEXT commercial property insurance can start at just $168 per year (or $14 per month).†

    What you’ll pay for your small business will depend on your industry, location and work experience, as well as your insurance claims history and the policy limits you choose.

    To get specific about your cost for a commercial property insurance policy, use our premium calculator or get a free quote.

    Examples of monthly median cost for commercial property insurance by profession

    COST BY PROFESSIONMEDIAN MONTHLY PREMIUM FOR COMMERCIAL PROPERTY INSURANCE*
    Accountant$28
    Architect$28
    Auto repair shop$70
    Business consultant$30
    Carpenter$60
    Carpet cleaner$46
    Cosmetologist$30
    Daycare$48
    E-commerce$35
    Electrician$57
    Engineer$39
    Fitness instructor$57
    General contractor$61
    Hair stylist$37
    Handyman$60
    HVAC contractor$77
    Landscaper$60
    Painter$51
    Personal trainer$42
    Photographer$32
    Property manager$38
    Real estate agent$32
    Restaurant$107
    Retail store$41
    Yoga teacher$33

    Source: NEXT Insurance

    How insurance companies calculate Commercial Property Insurance cost

    Insurance companies calculate your premium by considering several higher risk factors, including:

    1. Your type of business or industry

    A florist likely may pay less than a restaurant because the equipment they use to do their job is less likely to get damaged or cause accidents.

    The cost for retail stores, which have inventory, equipment and physical commercial buildings, may be higher than other professions because they face more daily risk.

    In general, jobs that rely on business property and would suffer serious losses if there were property damage or destruction often have higher insurance costs.

    2. Your business location

    If your building, warehouse, office, manufacturing facility or storefront is in downtown Los Angeles you’re probably going to pay more for commercial property coverage than if you’re located in rural Pennsylvania.

    This is partly due to the increased threat of natural disasters like hurricanes along a coastal area.

    It’s also due in part to more populated areas that have higher property value and more crime.

    3. Your work experience

    The length of time you’ve operated a business in your industry can impact your insurance rates.

    For example, if you’ve been a nail technician for 10 years, you’ll likely pay less than a barber in business for two years because you have a proven history of success in your field.

    4. Your claims history

    Your record of losses and claims can also have an impact on your insurance premium.

    For example, if you own a bakery that caught fire and had to have major repairs, you may see a higher premium when it’s time for your policy renewal.

    5. How you set your insurance coverage limits

    You can elect to have higher insurance coverage limits on your policy to give you more help and protection over more covered incidents. While more types of coverage can be a good thing, higher coverage limits can increase the cost of your policy.

    Note: These are only a few common factors that affect your cost. Insurance companies take many other external factors into account such as economic conditions and market trends.

    4 tips to help lower the cost of Commercial Property Insurance

    You can take control of several actions that may help lower your insurance cost, including:

    1. Reduce your risk

    Keeping your commercial business property safe and secure can help limit the likelihood of accident, injury and filing an insurance claim. And if you take action to reduce harm, particularly if your small business relies on inventory and equipment to operate, you’re more likely to keep your premium low.

    Consider enhanced safety practices such as:

    • Installing a fire-retardant sprinkler system.
    • Installing more fire extinguishers and smoke detectors.
    • Upgrading your security system.
    • Minimizing tripping and falling hazards in the workplace.
    • Conducting regular safety checks to keep your job site safe.

    2. Learn from previously filed claims

    Analyze your previous insurance claims and figure out what you could have done to avoid those events.

    For example, if you filed a claim because of stolen merchandise, you could train your employees to recognize and react to theft and shoplifting or install an in-store security system.

    3. Choose a right-sized deductible

    If you choose a higher deductible for your commercial property policy, it’s quite likely that you will pay less for your premium. Compare the cost of different types of deductibles, such as flat-rate, percentage, or per occurrence and choose what works best for your small business needs.

    4. Bundle more than one policy

    With NEXT, you save 10% if you combine more than one type of insurance policy to create a secure business insurance package.

    For example, if you add general liability insurance to your commercial property insurance, you can benefit from a discounted business owner’s policy (BOP) for more coverage at a cost savings.

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    How NEXT helps protect small businesses with commercial business property insurance

    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 an insurance quote. You can select your coverage options and purchase your policy — all in about 10 minutes. Your certificate of insurance will be available immediately, and you can access your policy 24/7 via web or mobile app.

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

    Start a free quote with NEXT.

    * The cost data presented here are based on NEXT active customers in the U.S. who purchased commercial property insurance over the previous 12 months. These data should not be considered a substitute for obtaining a quote specific to your business. These data were updated in January 2024.
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    Issuance of coverage is subject to underwriting. Not available in all states. Please see the policy for full terms, conditions and exclusions. Coverage examples are for illustrative purposes only. Your policy documents govern, terms and exclusions apply. Coverage is dependent on actual facts and circumstances giving rise to a claim. Next Insurance, Inc. and/or its affiliates is an insurance agency licensed to sell certain insurance products and may receive compensation from insurance companies for such sales. Policy obligations are the sole responsibility of the issuing insurance company. Refer to Legal Notices section for additional information.

    Any starting prices or premiums represented before an actual customer quote are not guaranteed and are representations of existing premiums of active policies as of December 6, 2023. To the extent permitted by law, applicants are individually underwritten, not all applicants may qualify. Individual rates and savings vary and are subject to change. Discounts and savings are available where state laws and regulations allow, and may vary by state. Certain discounts apply to specific coverages only.