Below we answer all of your most frequently asked questions specific to sole proprietor business insurance:
Best Sole Proprietor Business Insurance
NEXT Insurance is MoneyGeek’s top pick for the best sole proprietor business insurance with an overall score of 4.64 out of 5.
Discover cheap business insurance for sole proprietors below.
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Updated: October 9, 2025
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Sole Proprietor Business Insurance: FAQ Fast Answers
Who are the best sole proprietor business insurance companies?
To summarize, out top business insurers for sole proprietors is as follows:
- NEXT Insurance: Best Overall For Sole Proprietors
- The Hartford: Best Cheap Business Insurance For Sole Proprietors
- Simply Business: Best Sole Proprietorship Insurance Coverage Options
Who offers the cheapest business insurance for sole proprietors?
The following companies offer the cheapest business insurance for sole proprietorships:
- The Hartford: $62/mo
- Thimble: $69/mo
- Simply Business: $71/mo
Do I really need business insurance as a sole proprietor?
Yes, there are both requirements for insurance for sole proprietors and genuine business risks that make it necessary for you to get coverage. Unlike an LLC structure, you assume all risk associated to any personal liabilities if there are accidents and mistakes involving your business. You'll also be required by law in some cases even with no employees to have workers comp and commercial auto insurance (if you use a vehicle for business) depending on state laws and regulations.
What types of insurance should a sole proprietor have?
The best coverage depends on your industry, but most sole proprietors start with these key types of business insurance:
- General Liability Insurance: Covers bodily injury, property damage, and advertising injury claims.
- Professional Liability Insurance (Errors & Omissions): Protects against claims of negligence or mistakes in your professional work.
- Business Property Insurance: Covers tools, equipment, and office space.
- Business Interruption Insurance: Helps replace lost income if your business is forced to close temporarily.
- Cyber Liability Insurance: Protects against data breaches or cyberattacks.
- Workers Comp Insurance: May be required depending on state if you are the only employee and protects you if you get hurt on the job.
- Commercial Auto Insurance: Often required if you use vehicles for business with requirements varying by state.
How much does sole proprietor business insurance cost?
While costs vary by industry, location and plan limits, this is what business insurance costs on average for sole proprietors by common coverage types:
- Professional Liability: $57/mo
- Workers Comp: $54/mo
- General Liability: $76/mo
- BOP Insurance: $108/mo
Can I deduct business insurance on my taxes?
Most business insurance premiums are deductible on Schedule C documents as part of your 1040 tax form. As a heuristic if the commercial insurance policy protects your business operations or income, it’s generally deductible.
Does my personal insurance cover business activities?
Personal insurance does not cover business activities inherently and you'll need to buy either a separate commercial insurance policy or get an add-on (endorsement) added to your existing personal policy.
Best Business Insurance Companies for Sole Proprietors
We evaluated sole proprietor business insurance options and found NEXT delivers the best overall value with a 4.64 MoneyGeek score. The Hartford earned second place, while Simply Business rounded out our top three recommendations.
4.64 | $73 | |
4.63 | $62 | |
4.48 | $71 | |
4.45 | $74 | |
4.4 | $74 | |
4.38 | $77 | |
4.3 | $73 | |
4.3 | $69 | |
4.27 | $86 | |
4.24 | $79 | |
Note: Rates shown represent average monthly premiums of the companies MoneyGeek surveyed for sole proprietor business insurance. Your premium will vary based on your business type, location, coverage needs and risk factors.
LEARN MORE ABOUT THE BEST BUSINESS INSURANCE
Sole proprietors have different types of business insurance to consider, and each protects different aspects of your business. Our guides break down best match for your specific needs.
NEXT
Best for Customer Service
MoneyGeek Rating
4.6/ 5
4.5/5Affordability
4.7/5Customer Experience
4.8/5Coverage Options
Average Rate of General Liability Insurance
$74 monthlyWe analyzed thousands of general liability quotes from insurers across 79 industriesAverage Rate of Professional Liability Insurance
$53 monthlyWe analyzed thousands of professional liability quotes from insurers across 79 industriesOur Survey: Claims Process
3.9/5MoneyGeek conducted proprietary research analyzing provider features, pricing and customer experience factors.Our Survey: Likely to Recommend to Others
4.8/5MoneyGeek conducted proprietary research analyzing provider features, pricing and customer experience factors.
The Hartford
Best for Affordability
MoneyGeek Rating
4.6/ 5
4.6/5Affordability
4.7/5Customer Experience
4.6/5Coverage Options
Average Rate of General Liability Insurance
$61 monthlyWe analyzed thousands of general liability quotes from insurers across 79 industriesAverage Rate of Professional Liability Insurance
$52 monthlyWe analyzed thousands of professional liability quotes from insurers across 79 industriesOur Survey: Claims Process
4.5/5MoneyGeek conducted proprietary research analyzing provider features, pricing and customer experience factors.Our Survey: Likely to Recommend to Others
4.5/5MoneyGeek conducted proprietary research analyzing provider features, pricing and customer experience factors.
Simply Business
Best for Coverage Options
MoneyGeek Rating
4.5/ 5
4.4/5Affordability
4.2/5Customer Experience
4.9/5Coverage Options
Average Rate of General Liability Insurance
$69 monthlyWe analyzed thousands of general liability quotes from insurers across 79 industriesAverage Rate of Professional Liability Insurance
$56 monthlyWe analyzed thousands of professional liability quotes from insurers across 79 industriesOur Survey: Claims Process
3.7/5MoneyGeek conducted proprietary research analyzing provider features, pricing and customer experience factors.Our Survey: Likely to Recommend to Others
4.2/5MoneyGeek conducted proprietary research analyzing provider features, pricing and customer experience factors.
Cheapest Business Insurance Companies for Sole Proprietors
The Hartford offers the best business insurance rates for sole proprietors at $62 monthly ($747 annual), which is $11 less than the industry average of $73. Below we summarize the cheapest providers by common coverage type:
- Cheapest General Liability: $61/mo from The Hartford
- Cheapest Workers Comp: $35/mo from NEXT
- Cheapest Professional Liability (E&O): $51/mo from The Hartford
- Cheapest BOP: $84/mo from The Hartford
| The Hartford | $62 | $747 |
| Thimble | $69 | $825 |
| Simply Business | $71 | $848 |
| Progressive Commercial | $73 | $875 |
| NEXT Insurance | $73 | $875 |
| Coverdash | $74 | $890 |
| Nationwide | $74 | $893 |
| biBERK | $77 | $918 |
| Hiscox | $79 | $952 |
| Chubb | $86 | $1,035 |
Note: These rates reflect what MoneyGeek found when we surveyed companies for sole proprietor coverage, including general liability, workers comp, professional liability and business owner's policies. Your business insurance costs will depend on your specific business, location and coverage needs.
How Much Does Business Insurance Cost for Sole Proprietors?
The average monthly cost of business insurance for sole proprietors is $73 per month. While general liability and professional liability coverage both cost under $100/mo, BOP insurance is more expensive at $108 monthly because it bundles multiple types of insurance.
| Average Overall | $73 | $881 |
| BOP | $108 | $1,290 |
| General Liability | $76 | $907 |
| Professional Liability (E&O) | $57 | $680 |
| Workers Comp | $54 | $646 |
Note: These rates reflect what we found when MoneyGeek surveyed business insurance options for sole proprietors. Your actual costs will depend on your industry, location, coverage limits and individual risk factors.
Business Insurance Costs For Sole Proprietorships By Industry
Your industry has a major impact on your sole proprietor business insurance costs. For example, drone operators pay the lowest premium $12 monthly for general liability coverage, while pressure washing businesses face the highest costs at $983 monthly for BOP coverage.
Data filtered by:Results filtered by:
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Industry:
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Coverage Type:General Liability
| Accountants | General Liability | $16 | $194 |
| Ad Agency | General Liability | $26 | $313 |
| Automotive | General Liability | $39 | $469 |
| Auto Repair | General Liability | $112 | $1,342 |
| Bakery | General Liability | $66 | $795 |
| Barber | General Liability | $33 | $392 |
| Beauty Salon | General Liability | $49 | $588 |
| Bounce House | General Liability | $51 | $618 |
| Candle | General Liability | $40 | $483 |
| Cannabis | General Liability | $49 | $589 |
| Catering | General Liability | $65 | $777 |
| Cleaning | General Liability | $97 | $1,165 |
| Coffee Shop | General Liability | $66 | $790 |
| Computer Programming | General Liability | $21 | $257 |
| Computer Repair | General Liability | $35 | $417 |
| Construction | General Liability | $129 | $1,551 |
| Consulting | General Liability | $16 | $193 |
| Contractor | General Liability | $187 | $2,239 |
| Courier | General Liability | $143 | $1,718 |
| Daycare | General Liability | $24 | $289 |
| Dental | General Liability | $16 | $189 |
| DJ | General Liability | $19 | $224 |
| Dog Grooming | General Liability | $46 | $557 |
| Drone | General Liability | $12 | $146 |
| Ecommerce | General Liability | $54 | $644 |
| Electrical | General Liability | $82 | $988 |
| Engineering | General Liability | $29 | $352 |
| Excavation | General Liability | $342 | $4,101 |
| Florist | General Liability | $31 | $377 |
| Food | General Liability | $79 | $946 |
| Food Truck | General Liability | $103 | $1,236 |
| Funeral Home | General Liability | $44 | $532 |
| Gardening | General Liability | $82 | $988 |
| Handyman | General Liability | $179 | $2,148 |
| Home-based | General Liability | $17 | $209 |
| Hospitality | General Liability | $48 | $577 |
| HVAC | General Liability | $180 | $2,158 |
| Janitorial | General Liability | $101 | $1,207 |
| Jewelry | General Liability | $30 | $358 |
| Junk Removal | General Liability | $119 | $1,429 |
| Lawn/Landscaping | General Liability | $88 | $1,060 |
| Lawyers | General Liability | $17 | $201 |
| Manufacturing | General Liability | $48 | $571 |
| Marine | General Liability | $21 | $246 |
| Massage | General Liability | $71 | $847 |
| Mortgage Broker | General Liability | $17 | $202 |
| Moving | General Liability | $91 | $1,094 |
| Nonprofit | General Liability | $26 | $316 |
| Painting | General Liability | $105 | $1,265 |
| Party Rental | General Liability | $58 | $699 |
| Personal Training | General Liability | $18 | $211 |
| Pest Control | General Liability | $24 | $283 |
| Pet | General Liability | $41 | $493 |
| Pharmacy | General Liability | $45 | $545 |
| Photography | General Liability | $18 | $213 |
| Physical Therapy | General Liability | $82 | $987 |
| Plumbing | General Liability | $265 | $3,184 |
| Pressure Washing | General Liability | $670 | $8,046 |
| Real Estate | General Liability | $39 | $464 |
| Restaurant | General Liability | $107 | $1,279 |
| Retail | General Liability | $48 | $577 |
| Roofing | General Liability | $284 | $3,411 |
| Security | General Liability | $102 | $1,223 |
| Snack Bars | General Liability | $86 | $1,032 |
| Software | General Liability | $19 | $233 |
| Spa/Wellness | General Liability | $78 | $935 |
| Speech Therapist | General Liability | $23 | $275 |
| Startup | General Liability | $21 | $252 |
| Tech/IT | General Liability | $19 | $233 |
| Transportation | General Liability | $28 | $330 |
| Travel | General Liability | $15 | $184 |
| Tree Service | General Liability | $95 | $1,144 |
| Trucking | General Liability | $75 | $901 |
| Tutoring | General Liability | $22 | $268 |
| Veterinary | General Liability | $33 | $393 |
| Wedding Planning | General Liability | $20 | $245 |
| Welding | General Liability | $121 | $1,450 |
| Wholesale | General Liability | $33 | $393 |
| Window Cleaning | General Liability | $117 | $1,401 |
Note: We gathered these industry-specific rates from our insurer survey for sole proprietor businesses. Your quotes may differ based on your exact services, business location and coverage choices.
Business Insurance Costs For Sole Proprietorships By State
Your state and coverage type impact business insurance costs for your sole proprietorship. Professional liability insurance costs the least across states, starting at just $49 monthly in Maine, North Carolina and North Dakota, while BOP coverage in New York reaches $125 monthly, the highest rates we found at the state level.
Data filtered by:Results filtered by:
Select
State:
Select
Coverage Type:General Liability
| Alabama | General Liability | $74 | $888 |
| Alaska | General Liability | $70 | $835 |
| Arizona | General Liability | $71 | $857 |
| Arkansas | General Liability | $72 | $870 |
| California | General Liability | $84 | $1,010 |
| Colorado | General Liability | $75 | $899 |
| Connecticut | General Liability | $82 | $985 |
| Delaware | General Liability | $81 | $973 |
| Florida | General Liability | $82 | $982 |
| Georgia | General Liability | $77 | $921 |
| Hawaii | General Liability | $82 | $981 |
| Idaho | General Liability | $72 | $860 |
| Illinois | General Liability | $83 | $995 |
| Indiana | General Liability | $74 | $885 |
| Iowa | General Liability | $72 | $863 |
| Kansas | General Liability | $73 | $881 |
| Kentucky | General Liability | $70 | $840 |
| Louisiana | General Liability | $86 | $1,036 |
| Maine | General Liability | $65 | $786 |
| Maryland | General Liability | $72 | $865 |
| Massachusetts | General Liability | $79 | $951 |
| Michigan | General Liability | $72 | $859 |
| Minnesota | General Liability | $71 | $851 |
| Mississippi | General Liability | $76 | $911 |
| Missouri | General Liability | $75 | $895 |
| Montana | General Liability | $75 | $903 |
| Nebraska | General Liability | $71 | $858 |
| Nevada | General Liability | $85 | $1,026 |
| New Hampshire | General Liability | $75 | $902 |
| New Jersey | General Liability | $86 | $1,027 |
| New Mexico | General Liability | $76 | $912 |
| New York | General Liability | $88 | $1,054 |
| North Carolina | General Liability | $65 | $786 |
| North Dakota | General Liability | $66 | $788 |
| Ohio | General Liability | $70 | $841 |
| Oklahoma | General Liability | $72 | $860 |
| Oregon | General Liability | $70 | $842 |
| Pennsylvania | General Liability | $87 | $1,046 |
| Rhode Island | General Liability | $83 | $996 |
| South Carolina | General Liability | $78 | $934 |
| South Dakota | General Liability | $71 | $848 |
| Tennessee | General Liability | $74 | $885 |
| Texas | General Liability | $76 | $915 |
| Utah | General Liability | $72 | $861 |
| Vermont | General Liability | $73 | $871 |
| Virginia | General Liability | $69 | $826 |
| Washington | General Liability | $86 | $1,031 |
| West Virginia | General Liability | $79 | $951 |
| Wisconsin | General Liability | $74 | $890 |
| Wyoming | General Liability | $70 | $839 |
Note: We surveyed insurers across different states to gather cost data for sole proprietors. Your individual quotes will depend on your specific business profile and local market conditions.
Do Sole Proprietors Need Business Insurance?
Business insurance for sole proprietors is often a necessary part of protecting your business, especially given its liability responsibility structure. This type of business has unlimited personal liability, which means your home, savings and assets are at risk if someone sues your business. Most clients also require proof of insurance before hiring you and you may be required to have some coverages depending on state law.
So below, we've created tailored recommendations for your sole proprietorship by your business's revenue and other coverage considerations:
BUSINESS INSURANCE GUIDES TO COVERAGE NEEDS
To learn more about whether you need different types of business insurance coverage:
What Business Insurance Is Required For Sole Proprietors?
We've broken down possible requirements for sole proprietors by coverage type:
- Workers comp requirements: The only required coverages by law that can exist for a sole proprietorship with no employees is workers compensation for contractors and commercial auto insurance as required by state governments. All businesses, regardless of structure, with employees are required by federal law to get workers comp with specific employee benchmarks when coverage needs to begin ranging from 1 to 5 employees in all states except Texas.
- Client contract requirements: If you provide services as a sole proprietor, contracts often require general liability, professional liability policies or a surety bond.
- Leasing and financing properties: To enter into a lease for financing venture for a business property, commercial property and general liability insurance is often required for any business, including sole proprietors.
Sole Proprietor Business Insurance Coverage Recommendations
Your revenue level affects both the coverage amounts your sole proprietorship needs and the types of additional financial protection that make sense for your business.
Under $50,000 |
| Focus on essential coverage to protect your personal assets while managing tight cash flow. Monthly payment plans help with affordability. Most basic client contracts accept $1 million general liability minimums. You can consider these limits for commercial auto to reduce costs while maintaining adequate coverage. |
$50,000-$200,000 |
| Your higher revenue attracts larger clients who often require increased coverage limits. You'll have more equipment and inventory at risk and need higher property coverage. An umbrella policy gives you cost-effective additional financial protection. Business interruption coverage becomes essential as you depend more on your business income. |
More than $200,000 |
| You need more than $2 million liability insurance to qualify for large contracts. Your equipment and inventory are worth protecting with higher property coverage limits. You're also handling more customer information, which means cyber liability protects you from data breaches. Consider an umbrella policy for extra protection across all your assets. If you're planning to hire employees, employment practices liability coverage shields you from wrongful termination claims. |
Special Sole Proprietor Coverage Considerations
Beyond basic coverage, your business setup and operations create specific insurance needs. Consider these types of insurance based on how you run your sole proprietorship.
Home-Based Business | Your homeowner's policy excludes most business activities, creating dangerous coverage gaps. You need a business personal property endorsement to protect equipment, inventory and supplies you use for work. When clients visit your home office, your homeowner's liability coverage won't apply to business-related injuries. |
Mobile or On-Site Services | You need hired/non-owned auto coverage when you use personal vehicles for business trips. Your tools and equipment face higher theft risks during transport, so you need tools-in-transit coverage. Make sure your general liability policy includes multi-location coverage since you work at various client locations. |
Physical Location or Storefront | Renting or owning commercial space means you need premises liability coverage for customer injuries that happen in your location. This coverage is separate from general liability and specifically protects against risks at your physical business address. |
Client-Dependent Businesses | Most clients require certificates of insurance before they'll sign contracts, so you need a system to generate these quickly. Some contracts require adding clients as insured parties through additional insured endorsements on your policy. |
Seasonal or Part-Time Businesses | You can adjust your policy during inactive periods to reduce premiums. Consider gap coverage when your business is closed, but you still face ongoing liabilities from past work. |
How to Get the Best Sole Proprietor Business Insurance
As a sole proprietor, you need to become your own insurance expert. The wrong coverage leaves your personal assets exposed, while over-insuring wastes money you could invest back into your business. Follow these steps to find coverage that protects your assets without breaking your budget.
- 1
Assess your coverage needs
Start by listing your personal assets at risk since you have unlimited liability as a sole proprietor. Check if your state requires specific coverage for your profession. Review contracts with existing clients to understand their insurance requirements. Identify the biggest risks you face daily in your specific industry.
- 2
Determine appropriate coverage amounts
Use the revenue level and growth stage tables above to set your baseline coverage limits. Most client contracts require $1 million to $2 million general liability minimums. Calculate if an umbrella policy makes sense based on your personal net worth. List all business equipment and inventory to determine property coverage needs.
- 3
Research and compare insurance providers
For accurate comparisons, get quotes from at least three to four carriers using identical coverage specifications. Focus on insurers experienced with sole proprietors and small businesses rather than large corporate specialists. Verify each carrier has an AM Best financial strength rating of A- or higher. Check your state insurance department's website for complaint records.
- 4
Evaluate coverage features and policy terms
Compare coverage territories since some policies exclude certain states. Read exclusions carefully as they vary between carriers and can eliminate expected coverage. Look for benefits like legal hotlines or risk management resources. Understand your deductible options (what you pay before insurance covers costs) and claims procedures.
- 5
Compare total costs beyond the premium
Your monthly rate isn't the whole story. Factor in payment processing fees and policy charges that add to your actual expense. Paying annually typically cuts costs compared to monthly billing. Look for discounts when you bundle policies or complete safety training. Check how much each carrier raises rates at renewal time.
- 6
Select a provider and optimize your policy
Choose based on coverage quality, service, and total cost. Set effective dates to meet business needs and client deadlines. Ensure quick certificate generation since clients request them on short notice. Create a system for tracking documents and renewals.
- 7
Implement risk management practices
Develop prevention strategies for your industry's common claims to reduce premiums. Review client contracts before signing to spot insurance requirement changes. Write continuity plans for covered scenarios like theft or damage. Document safety training for potential discounts.
- 8
Plan for annual review and renewal
Review your policy at least two months before it expires so you have time to make changes. Your insurance needs change as your business grows. More revenue means higher liability limits, and new employees trigger workers' comp requirements. Client contracts evolve, too. Compare rates from other insurers each year rather than auto-renewing.
Sole Proprietor Insurance: Bottom Line
NEXT tops our sole proprietor business insurance rankings with flexible coverage options and competitive pricing. The Hartford offers low-cost financial protection at $62 monthly, but offers fewer features. Your industry and budget should guide your decision between these options.
About Mark Fitzpatrick
Mark Fitzpatrick, a Licensed Property and Casualty Insurance Producer, is MoneyGeek's resident Personal Finance Expert. With over five years of experience analyzing the insurance market, he conducts original research and creates tailored content for all types of buyers. His insights have been featured in publications like CNBC, NBC News and Mashable.
Fitzpatrick holds a master’s degree in economics and international relations from Johns Hopkins University and a bachelor’s degree from Boston College. He's also a five-time Jeopardy champion!
Passionate about economics and insurance, he aims to promote transparency in financial topics and empower others to make confident money decisions.
sources
- AM Best. "AM Best Revises Issuer Credit Rating Outlook to Positive for The Hartford Financial Services Group, Inc. and Its Subsidiaries." Accessed September 22, 2025.
- Better Business Bureau. "Simply Business | BBB Complaints." Accessed September 22, 2025.
- Trustpilot. "Simply Business US Reviews." Accessed September 22, 2025.