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What is the price for small business insurance?

Price for Small Business Insurance

Business owners are constantly juggling a lot of expenses. For most of these expenses, it’s pretty easy to estimate the price. This isn’t the case with business insurance. This explains why one of the most popular questions in we get is, what is the price for small business insurance? Unfortunately, this is not an easy question to answer.

For this reason, we pulled together as much information as we could to help small business owners understand what to expect when they decide to buy business insurance.

Small Business Insurance Price and Premium

It’s important to note, pricing business insurance does have some variables which make it tricky to determine a specific cost without a full quote. However, using some internal data, we’ve provided pricing ranges. This will help provide a benchmark as you begin shopping for business insurance. Your rate may vary from the averages.

Here is a summary of our research, this should help you begin to get a handle on what your small business insurance price may be.

The average cost of general liability insurance for a small business is around $750 to $2,000 per year. The premium can vary widely based on factors such as the size of the business, industry, location, and level of coverage.

Example: a small retail store may pay a lower premium than a construction company with multiple employees and a higher risk of accidents.

The average cost of a business owner’s policy (BOP) varies based on factors such as the size of the business, industry, location, and coverage. On average, small businesses can expect to pay anywhere from $400 to $3,500 annually for a BOP. A BOP typically includes property and liability coverage and can be a cost-effective way for small businesses to package several important coverages.

On average, small businesses can expect to pay around $1,000 to $5,000 per year for workers’ compensation insurance. The exact cost will depend on factors such as the number of employees, the type of work they perform, and the state where the business is located, as workers’ compensation laws and rates vary by state.

The average small business can expect to pay anywhere from $750 to $6,500 dollars per year for commercial auto insurance. The exact cost will depend on the type of vehicle, the coverage levels, the deductible, and other factors.

Example: A delivery business with several vehicles may pay a higher premium than a small consulting business with just one or two vehicles. 

This line of business may have the most variability and is highly dependent on your industry, annual revenue, and loss history. On average, small businesses can expect to pay anywhere from $800 to $5,500 per year for professional liability insurance.

Example: A technology consulting firm may pay a higher premium than a small graphic design business. It’s important to shop around and compare quotes from multiple insurance providers to find the best coverage for your specific needs at a cost that fits your budget.

We need to note once again, these averages and median costs are provided to give the small business owner a sense of premiums and what they can anticipate for insurance expenses. It’s important to note, the only way to really determine the small business insurance price for your unique company is to get a business insurance quote.

What impacts small business insurance price

There are several factors that impact the pricing for business insurance, including:

  • Industry: Different industries carry different levels of risk, which can impact the cost of insurance. For example, a construction company may pay a higher premium than a retail store.

  • Size of the business: The size of the business, including the number of employees and the revenue, can impact the cost of insurance.

  • Location: Insurance rates can vary greatly by state, and even by city or region, based on factors such as crime rates, natural disasters, and local regulations.

  • Type of coverage: The level of coverage, including the amount of insurance and the deductible, can impact the cost of insurance.

  • Claims history: A business with a history of frequent insurance claims may pay a higher premium than a business with a clean claims history.

  • Business operations: The type of work performed by the business and the level of risk involved can impact the cost of insurance.

  • Financial stability: A well-established, financially stable business may pay a lower premium than a new or struggling business.

It’s important to consider these and other factors when shopping for business insurance to ensure that you obtain the best coverage for your specific needs at a cost that fits your budget.

The bottom line

Your small business insurance price will vary depending on several factors. In some instances, you can control how much you pay by employing good risk mitigation, and hiring strategies.

There really is no better way to get a handle on the price of small business insurance than to work with an insurance agent. Insurance agents can shop the market, and may even have some discretionary credits (code for discount) to help you save money. Don’t know any good agents? You can contact us and we’d be happy to help. You can always start a quote online, and an agent will contact you with a quote.

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