How Much Does Small Business Insurance Cost?

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How Much Is Small Business Insurance?

small business owner unloading car
On average, customers of The Hartford pay $85 per month, or $1,019 per year, in business insurance costs.** However, your small business insurance costs often depend on different factors, like the type of small business insurance coverage you’ve selected and the industry you’re in.
 
The best way to learn more about your small business insurance cost is to get a quote from The Hartford today.
 
How Much Will Small Business Insurance Cost You?
 
You've worked hard building your business. Now, it needs the right business insurance. If you're wondering how much it will cost, that will depend on your:
 
small business insurance cost
Industry
average cost of small business insurance
Number of Employees
cost of business insurance
Payroll
average cost of business insurance
Claims History
 
What Is the Average Cost of Small Business Insurance?
cost of insurance for small business
Business Owner's Policy (BOP)
$1,019 Average Annual Premium
$85 Average Monthly Premium
cost of liability insurance for small business
General Liability Insurance (GLI)
$805 Average Annual Premium
$67 Average Monthly Premium
average cost of insurance for small business
Workers' Compensation Insurance
$1,028 Average Annual Premium
$86 Average Monthly Premium
 
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Costs for Different Types of Small Business Insurance

Below are the average costs for different types of small business insurance.
 

Cost Factors for a Business Owner’s Policy (BOP)

Small business insurance customers of The Hartford paid an average of $85 per month, or $1,019 per year, for BOP coverage.** Remember, every small business is unique and has different needs, which means insurance rates will vary. What you’ll pay depends on different factors, like:
 
  • Your claims history
  • Your industry
  • The number of employees you have
  • Your payroll
  • The coverage you need

Cost Factors for General Liability Insurance

Our customers paid an average of about $67 a month or $805 annually for general liability insurance.** Also known as business liability insurance, it helps cover claims that your business caused bodily injury or property damage.
 
Remember, rates vary and it’s no different when it comes to general liability insurance costs. This includes your:
 
  • Sales: The more customers your business has, the more risk you face for claims. This can increase your general liability insurance cost. But if you keep a safe area for your customers, it can prevent claims and keep your insurance costs down.
  • Industry: More hazardous industries need risk management. This can lead to higher costs.
  • Location: Being in a more populated area can increase your risk of customer injury. So, your insurance rate may increase.

Cost Factors for Workers’ Compensation Insurance

According to our policy data, most of our customers with less than $300,000 in payroll pay an average of $86 a month for workers’ compensation insurance. This is a coverage that most states require.** It helps your employees recover from a work-related injury or illness.
 
The factors that insurers use to determine your workers’ compensation cost include your:
 
  • Type of work: Certain types of industries put employees at a higher risk of injury or illness.
  • Claims history: Even if your business has some workers’ comp claims, you can still qualify as a safe workplace, which can lower your workers’ comp cost.
  • Payroll: Your cost is calculated per $100 of payroll. So, the larger your payroll, the higher your costs.

Cost Factors for Professional Liability Insurance

Professional liability insurance helps protect you from claims that your business made a mistake or error in the professional services given. Small business insurance customers of The Hartford paid an average of $76 per month and $907 per year for a professional liability insurance standalone policy.** Keep in mind that different industries may have higher costs than others because some face more risks than others.
 
Some factors that can impact your professional liability insurance costs include your:
 
  • Number of employees
  • Exposure to risk
  • Business size
  • Location
  • Coverage limits selected

Cost Factors for Commercial Auto Insurance

A commercial auto insurance policy helps protect you and your employees on the road if you’re driving a company-owned vehicle for business. On average, our customers paid an average of $574 a month for commercial auto insurance coverage.**
 
  • Where and how often you drive: The more time you or your employees spend on the road and the more hazards you have when traveling can increase your commercial auto insurance cost.
  • Driver demographics: Drivers with less experience are most likely to have a commercial auto claim and can drive up premiums.
  • Type of driving and vehicle: Whether businesses have high or low commercial auto insurance rates depends on the type, make and model of their vehicles. Typically, more expensive vehicles have higher premium rates.
  • Driving record: As with personal auto insurance, driving records can impact the cost of your premiums. Your insurance company will look at the experience of the drivers covered under your commercial auto policy. The better your driving record, the lower your commercial auto premiums may be.
  • Coverage required: The level of damage coverage impacts the cost of your commercial auto insurance. This means you’ll pay more for higher coverage limits than a basic policy.
  • The nature of your work: The types of goods and services you provide can impact your insurance rate.

Cost Factors for Commercial Property Insurance

Customers of The Hartford pay about $1,605 a year, or $134 a month, on average for commercial property insurance.** Keep in mind that what you pay for commercial property insurance may be higher or lower than that amount because of factors like your property’s:
 
  • Location: If your business is located in a populated area that has higher risk for crime or vandalism, you may pay a higher rate.
  • Construction: Materials used in the construction of your business can impact your commercial property insurance cost. For example, buildings made from fire-resistant materials will typically cost less to insure.
  • Occupancy: Businesses with larger amounts of people consistently on the premises, like restaurants, will likely pay higher insurance costs.
  • Fire and threat protection: Installing safety features like smoke detectors and burglar alarms at your business may help lower your rate.

How To Lower Your Small Business Insurance Cost

small business employee helping a customer No matter the size of your company, one of the best ways to lower your business liability insurance cost is to reduce potential risk. There are a few additional ways small business owners can save on the cost of small business insurance. This includes:
 
  • Bundling insurance policies: You can save money on business insurance by bundling essential coverage into one policy. For instance, a Business Owner’s Policy (BOP) combines business income, commercial property and general liability insurance.
  • Pay your entire premium up front: You could pay your premium monthly but paying for the entire total at once can get you a discount on your business insurance coverage.
  • Managing risk: The safer your business is, the less your insurance costs. Create a risk management plan to reduce the likelihood of accidents at your work location, jobsites and on the road.
 

Small Business Insurance Frequently Asked Questions

Below you will find answers to small business insurance FAQs.
When calculating how much small business insurance coverage you’ll need, you should have these specific business details ready to help you ahead of time:
 
  • Business type
  • Number of employees
  • Gross annual sales
LLC business insurance costs often will vary. On average, our customers pay about $85 a month for a Business Owner’s Policy (BOP), which is a common type of business insurance that LLCs have.**
Startup insurance costs will often vary depending on the type of industry you’re in. On average, our small business customers pay about $1,019 annually, or $85 a month, for a Business Owner’s Policy (BOP).** The BOP coverage is a popular choice for startups because it combines three essential types of business insurance into one policy – General Liability, Commercial Property and Business Income.
For business insurance, there’s not a one-size-fits-all approach because each business has their own unique needs. With insurance from The Hartford, you can customize your coverage to create the best small business insurance policy fit for your business needs. Many small business owners start with a Business Owner’s Policy (BOP) because it combines three essential coverages to protect against claims of bodily injury, property damage and lost income. You can add on other optional coverages to your BOP, such as:
 
If you’re wondering “Do I need insurance for my small business?” the answer is most often yes. Most states require small businesses to have some level of insurance, especially if you use any commercial vehicles for business reasons or have any employees. That’s why it’s important to understand your state laws and the risks associated with your line of work.
 

Get a Fast and Free Quote for Small Business Insurance

Business owner researches small business insurance costs To find out how much you'll pay, get a small business insurance quote from us today.
 
 
 
 
 
 
Last Updated: May 3, 2024
 
** Premium amounts presented are based on monthly premium paid by The Hartford’s Small Business customers between 1/1/22 and 9/14/23 for 12-month policies. Premium is derived from a number of factors specific to your business and may vary.
 
Additional disclosures below.
The Hartford shall not be liable for any damages in connection with the use of any information provided on this page. Please consult with your insurance agent/broker or insurance company to determine specific coverage needs as this information is intended to be educational in nature.
 
The information contained on this page should not be construed as specific legal, HR, financial, or insurance advice and is not a guarantee of coverage. In the event of a loss or claim, coverage determinations will be subject to the policy language, and any potential claim payment will be determined following a claim investigation.
 
Certain coverages vary by state and may not be available to all businesses. All Hartford coverages and services described on this page may be offered by one or more of the property and casualty insurance company subsidiaries of The Hartford Financial Services Group, Inc. listed in the Legal Notice.
 
The Hartford Financial Services Group, Inc., (NYSE: HIG) operates through its subsidiaries under the brand name, The Hartford, and is headquartered in Hartford, CT. For additional details, please read The Hartford’s Legal Notice.
 
* Customer reviews are collected and tabulated by The Hartford and not representative of all customers.
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