How Much Is Business Insurance? Cost Factors To Consider

On average, The Hartford’s small business customers pay about $141 per month and $1,687 per year for a Business Owner’s Policy (BOP).**
Author:
Chloe Silverman
Chloe Silverman,Staff Copywriter
Chloe Silverman
Staff copywriter specializing in small business insurance for The Hartford.
Updated: 10/09/2025
Read Time: 9 minutes
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Key Takeaways

  • While the average cost of a Business Owner’s Policy is about $141 per month or $1,687 per year for The Hartford’s business customers, your premium may vary depending on the coverage you need.
  • Insurers use several different factors to determine your business insurance premium, like industry, business size, number of employees, location and claims history.
  • Business owners can consider bundling policies, paying premiums upfront, raising deductibles and implementing risk management practices to save money on insurance costs.
cost of small business insurance infographic

What’s the Average Cost for Small Business Insurance?

On average, The Hartford’s business customers pay about $141 per month, or $1,687 per year in business insurance costs.** However, what you pay for business insurance will vary based on the type of coverage you choose, your business’s risk profile and other considerations.
 
What can you expect for your business insurance cost? Get a quote from The Hartford today.
 
Click the image to view an infographic.

How Business Insurance Costs Are Calculated

Many people ask what the median cost of business insurance is, but it really depends on what kind of business you have. For example, higher risk companies can expect to pay more for insurance. That’s why looking at this average isn’t always helpful for small business owners who want an estimate of their own costs. Instead, focus on the average costs in your specific industry.
 
In many cases, it’s more realistic to plan your insurance costs based on your:
 
  • Industry type: Your industry may impact the cost for business insurance because of the risk factors associated with the work you do.
  • Size of business operations: If your business has expanded its operations and increased in overall size, you’ll most likely need to get more coverage.
  • Number of employees: If you have more employees, you’ll need more coverages to keep them protected from risks they might face on the job, like customer lawsuits, accidents, injuries or illnesses.
  • Coverage needs: Each business has different coverage needs because each business is unique. You may be legally required to carry certain coverages depending on what you do and where your company is located.
  • Industry risk: Typically, riskier businesses pay more for insurance. Risk factors can include financial and physical risks to your business, employees, vendors and customers. Learn more about business insurance by industry today.
  • Business location: Companies located in heavily populated areas often experience a higher likelihood of crime or vandalism, which can cause your rates to go up. State business insurance requirements also vary, which can impact your commercial property insurance cost.
  • Public visibility: People may target well-known businesses in the public eye more often than lesser known companies. For this reason, insurance rates may increase as your reputation grows.
  • Payroll size: Your payroll helps determine your workers’ compensation benefits. The larger your payroll, the higher your premium will be, because there’s a higher risk for bodily injuries.
  • Coverage levels: The more coverage you add to your policy and the higher the limits, the more you’ll pay. Sometimes, choosing a higher deductible can help lower your monthly or annual premiums.
There’s no hard-and-fast answer to the question, “How much is company insurance going to cost?” But it helps to know which factors determine costs.
 

How Much Is Business Insurance for a Small Business?

Bigger companies typically pay higher business insurance premiums because they employ more people, generate more income and have more complex operations. These factors make their potential losses, legal costs and the value of each insurance claim higher. But business insurance is also essential for shielding small companies from risk. The cost of business insurance for a small business will depend most heavily on these factors unique to your operations:
 
  • Industry
  • Number of employees
  • Payroll
  • Claims history

Costs for Different Types of Small Business Insurance Policies

How much is small business insurance when considering factors like employee coverage, vehicles, business property value and more? Here is a breakdown of the average costs for different types of small business policies.
The Hartford’s small business insurance customers paid an average of $141 per month, or $1,687 per year, for BOP coverage.** Remember, every small business is unique and has different needs, so 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
Our customers paid an average of about $68 a month or $810 annually for general liability.** Also known as business liability insurance, it helps cover claims that your business caused bodily injury or property damage.
 
Remember, rates vary, even when it comes to general liability insurance costs. Factors can include your:
 
  • Sales: The more customers your business has, the higher your risk of 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 injuries. So, your insurance rate may increase.
According to our policy data, most of our customers with less than $300,000 in payroll pay an average of $81 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.
Professional liability insurance helps protect you from claims that your business made a mistake or error in the professional services given. The Hartford’s small business insurance customers paid an average of $62 per month, or $744 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
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 $574 a month for commercial auto insurance coverage.**
 
Factors that can impact your commercial auto insurance cost include:
 
  • Where and how often you drive: Your commercial auto insurance will increase in line with how much time you or your employees spend driving business-owned vehicles and the number of hazards you face on the road.
  • 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 premiums.
  • 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 coverage for damages 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.
On average, The Hartford’s customers pay about $1,605 a year, or $134 a month, 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 with a 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.

Small Business Insurance FAQs

LLC business insurance costs often will vary. On average, our customers pay about $141 a month for a Business Owner’s Policy (BOP), which is a common type of business insurance for LLCs.**
Startup insurance costs will often vary depending on the type of industry you’re in. On average, our small business customers pay about $1,687 annually, or $141 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.
We know how important it is to protect the business you’ve worked so hard to build. Without the protection of business insurance, you’ll have to pay out of pocket for costly claims. If you’re ready to get business insurance, be sure to consider these ways to save money while getting the coverages you need:
 
  • Bundle your 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 into one convenient policy.
  • Pay your premium up front: It’s always an option to pay your premium monthly, but if you pay the entire cost upfront each year, you could get a discount on your business insurance costs.
  • Raise your deductible: Your deductible is the amount you’ll pay out of pocket before your insurance company will cover a claim. By increasing your deductible, you may be able to lower your total insurance costs per month.
  • Manage your risk: Safer businesses have lower insurance costs. Create a risk management plan to reduce the likelihood of accidents at your work location, jobsites and on the road.

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2 What you pay for professional liability insurance will vary by product, limits chosen and risk class or hazard group associated with your business.
** Costs, premiums, and coverages mentioned are estimates and are not guaranteed. Actual cost, premium, and coverage are determined at the time of quote or issue and are specific to an individual risk. Premiums are based on information provided to The Hartford, including, but not limited to, underwriting and rating criteria. All examples included on this website or in an advertisement are intended for informational purposes only and are not an offer or a guarantee of premium or coverage. Coverage and products described are subject to the terms and conditions found in the policy contract. Any educational information provided about available coverages does not modify the policy language or imply that any claim is covered. Products are not available in all states or for all businesses.
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 Insurance Group, Inc. listed in the Legal Notice.
 
The Hartford Insurance 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.
 
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