*Business insurance rates vary based on your business operations, claims history and risk factors. These estimates are for informational purposes only and shouldn't be considered quotes. Consult with licensed insurance professionals for coverage recommendations specific to your business needs.
Business Insurance Cost
The cost of business insurance averages $101 per month or $1,207 per year when considering the most needed coverages.
Find affordable business insurance for your needs below.
Select your industry
Updated: August 14, 2025
Advertising & Editorial Disclosure
Key Takeaways
For the most often needed coverages, average business insurance costs range from $74 to $147 per month.
Your business insurance costs will vary depending on your industry, business size, location, claims history and chosen coverage type.
You can get lower business insurance costs by deciding on coverage needs beforehand, doing prior research, shopping around and implementing risk mitigation tactics.
How Much Does Business Insurance Cost?
For the types of business insurance most small business owners need, average insurance costs range from $885 to $1,767 per year. However, this represents only an overall average for a three-person business with two employees, and costs will vary depending on your industry, business size and state.
| Average Overall | $101 | $1,207 |
| BOP | $147 | $1,767 |
| General Liability | $104 | $1,242 |
| Professional Liability (E&O) | $78 | $931 |
| Workers' Comp | $74 | $885 |
*Rates are for a three-person business with two employees, annual revenues of $300,000, $150,000 in payroll per year, and coverage limits of $1 million per claim and $2 million aggregate per year. Actual rates may vary based on your business profile and chosen insurer.
FIND THE BEST CHEAP BUSINESS INSURANCE FOR YOU
Check out these guides to help you get the best fit for coverage:
What Factors Affect Small Business Insurance Costs?
Several factors influence the cost of small business insurance, including your company's industry, size and location.
Industry
Your industry greatly affects insurance costs. Businesses in sectors with higher claim risks, such as construction or health care, usually pay higher premiums than those in lower-risk industries.
Business size
Larger businesses often face higher insurance costs due to the increased risk of managing more employees and operations. A business with multiple employees usually pays more for insurance than a sole proprietorship.
Location
Your business location impacts insurance costs. Areas with higher claim rates, severe weather conditions or higher living costs lead to increased premiums.
Claims history
Insurers charge higher premiums to businesses with claim histories, as they view such businesses as more likely to file future claims.
Coverage amounts and deductibles
Your coverage choices also impact costs. Higher coverage limits and lower deductibles usually result in higher premiums, as the insurer takes on greater financial risk.
Risk management practices
Insurers may reward businesses that implement strong risk management practices with lower premiums. These practices include following safety protocols, conducting employee training programs and following industry best practices.
Insurance company
Your chosen insurer affects coverage costs. Different insurance companies have different risk appetites and pricing strategies. Businesses should compare offerings from multiple insurers to find the best fit for their needs and budget.
Business Insurance Costs by Coverage Type and State
Depending on your state, average business insurance costs range from $64 to $171 per month. However, this also depends on your firm's coverage needs. Below are the costs of commonly needed commercial coverage policies.
General Liability Insurance Cost by State
The most commonly needed and purchased coverage, general liability insurance, costs around $1,076 to $1,444 by state. However, since this coverage focuses on liability and property damage, costs vary more widely by business industry.
| Alabama | $101 | $1,217 |
| Alaska | $95 | $1,143 |
| Arizona | $98 | $1,174 |
| Arkansas | $99 | $1,192 |
| California | $115 | $1,384 |
| Colorado | $103 | $1,232 |
| Connecticut | $112 | $1,350 |
| Delaware | $111 | $1,333 |
| Florida | $112 | $1,345 |
| Georgia | $105 | $1,262 |
| Hawaii | $112 | $1,343 |
| Idaho | $98 | $1,178 |
| Illinois | $114 | $1,364 |
| Indiana | $101 | $1,212 |
| Iowa | $99 | $1,183 |
| Kansas | $101 | $1,207 |
| Kentucky | $96 | $1,151 |
| Louisiana | $118 | $1,420 |
| Maine | $90 | $1,076 |
| Maryland | $99 | $1,185 |
| Massachusetts | $109 | $1,303 |
| Michigan | $98 | $1,176 |
| Minnesota | $97 | $1,165 |
| Mississippi | $104 | $1,248 |
| Missouri | $102 | $1,227 |
| Montana | $103 | $1,237 |
| Nebraska | $98 | $1,175 |
| Nevada | $117 | $1,405 |
| New Hampshire | $103 | $1,235 |
| New Jersey | $117 | $1,407 |
| New Mexico | $104 | $1,249 |
| New York | $120 | $1,444 |
| North Carolina | $90 | $1,076 |
| North Dakota | $90 | $1,080 |
| Ohio | $96 | $1,153 |
| Oklahoma | $98 | $1,178 |
| Oregon | $96 | $1,154 |
| Pennsylvania | $119 | $1,432 |
| Rhode Island | $114 | $1,365 |
| South Carolina | $107 | $1,279 |
| South Dakota | $97 | $1,161 |
| Tennessee | $101 | $1,212 |
| Texas | $104 | $1,253 |
| Utah | $98 | $1,179 |
| Vermont | $99 | $1,193 |
| Virginia | $94 | $1,131 |
| Washington | $118 | $1,413 |
| West Virginia | $109 | $1,303 |
| Wisconsin | $102 | $1,219 |
| Wyoming | $96 | $1,149 |
*Rates are for a three-person business with two employees, annual revenues of $300,000, $150,000 in payroll per year, and coverage limits of $1 million per claim and $2 million aggregate per year. Actual rates may vary based on your business profile and chosen insurer.
Workers' Comp Insurance Cost by State
Depending on your state, monthly workers' comp insurance costs can be as low as $64 or as high as $85. Workers' compensation is the least expensive overall for most small businesses due to their smaller sizes and the prevalence of lower-risk business types among small firm owners.
| Alabama | $72 | $866 |
| Alaska | $65 | $784 |
| Arizona | $70 | $838 |
| Arkansas | $71 | $847 |
| California | $82 | $984 |
| Colorado | $73 | $873 |
| Connecticut | $80 | $958 |
| Delaware | $79 | $951 |
| Florida | $80 | $955 |
| Georgia | $75 | $895 |
| Hawaii | $75 | $904 |
| Idaho | $70 | $837 |
| Illinois | $81 | $967 |
| Indiana | $72 | $859 |
| Iowa | $70 | $839 |
| Kansas | $72 | $858 |
| Kentucky | $69 | $825 |
| Louisiana | $82 | $986 |
| Maine | $64 | $766 |
| Maryland | $70 | $842 |
| Massachusetts | $77 | $925 |
| Michigan | $70 | $835 |
| Minnesota | $69 | $830 |
| Mississippi | $74 | $886 |
| Missouri | $73 | $874 |
| Montana | $73 | $878 |
| Nebraska | $70 | $835 |
| Nevada | $84 | $1,005 |
| New Hampshire | $73 | $878 |
| New Jersey | $83 | $999 |
| New Mexico | $74 | $889 |
| New York | $85 | $1,025 |
| North Carolina | $64 | $764 |
| Oklahoma | $69 | $823 |
| Oregon | $68 | $820 |
| Pennsylvania | $85 | $1,017 |
| Rhode Island | $81 | $969 |
| South Carolina | $76 | $909 |
| South Dakota | $69 | $824 |
| Tennessee | $72 | $861 |
| Texas | $74 | $890 |
| Utah | $70 | $843 |
| Vermont | $71 | $848 |
| Virginia | $67 | $803 |
| West Virginia | $77 | $925 |
| Wisconsin | $72 | $868 |
*Rates are for a three-person business with two employees, annual revenues of $300,000, $150,000 in payroll per year, and coverage limits of $1 million per claim and $2 million aggregate per year. Actual rates may vary based on your business profile and chosen insurer.
Professional Liability (E&O) Insurance Cost by State
Professional liability or E&O insurance costs range from $67 to $90 per month or $807 to $1,077 per year. According to our study, this policy type is the second least expensive common coverage type.
| Alabama | $77 | $918 |
| Alaska | $70 | $840 |
| Arizona | $74 | $884 |
| Arkansas | $74 | $893 |
| California | $87 | $1,038 |
| Colorado | $77 | $923 |
| Connecticut | $84 | $1,014 |
| Delaware | $83 | $1,001 |
| Florida | $84 | $1,009 |
| Georgia | $79 | $948 |
| Hawaii | $81 | $967 |
| Idaho | $73 | $882 |
| Illinois | $85 | $1,025 |
| Indiana | $76 | $906 |
| Iowa | $74 | $886 |
| Kansas | $75 | $905 |
| Kentucky | $73 | $870 |
| Louisiana | $88 | $1,051 |
| Maine | $68 | $810 |
| Maryland | $74 | $889 |
| Massachusetts | $82 | $980 |
| Michigan | $73 | $880 |
| Minnesota | $73 | $875 |
| Mississippi | $78 | $934 |
| Missouri | $77 | $923 |
| Montana | $77 | $926 |
| Nebraska | $73 | $881 |
| Nevada | $88 | $1,061 |
| New Hampshire | $77 | $924 |
| New Jersey | $88 | $1,054 |
| New Mexico | $78 | $939 |
| New York | $90 | $1,077 |
| North Carolina | $67 | $807 |
| North Dakota | $68 | $810 |
| Ohio | $72 | $864 |
| Oklahoma | $73 | $877 |
| Oregon | $72 | $865 |
| Pennsylvania | $90 | $1,075 |
| Rhode Island | $85 | $1,024 |
| South Carolina | $80 | $959 |
| South Dakota | $73 | $872 |
| Tennessee | $76 | $909 |
| Texas | $78 | $939 |
| Utah | $74 | $889 |
| Vermont | $75 | $894 |
| Virginia | $71 | $850 |
| Washington | $88 | $1,061 |
| West Virginia | $81 | $978 |
| Wisconsin | $76 | $916 |
| Wyoming | $72 | $865 |
*Rates are for a three-person business with two employees, annual revenues of $300,000, $150,000 in payroll per year, and coverage limits of $1 million per claim and $2 million aggregate per year. Actual rates may vary based on your business profile and chosen insurer.
BOP Insurance Cost by State
Business owner's policy (BOP) insurance costs vary from $128 to $171 per month, depending on the state your business operates in. BOP insurance combines general liability, commercial property and business interruption coverage into one package, which is why it's the most expensive single policy option. Below are the average BOP insurance costs by state.
| Alabama | $144 | $1,734 |
| Alaska | $132 | $1,586 |
| Arizona | $139 | $1,668 |
| Arkansas | $141 | $1,696 |
| California | $164 | $1,966 |
| Colorado | $146 | $1,754 |
| Connecticut | $160 | $1,919 |
| Delaware | $158 | $1,894 |
| Florida | $160 | $1,916 |
| Georgia | $149 | $1,793 |
| Hawaii | $155 | $1,858 |
| Idaho | $140 | $1,679 |
| Illinois | $162 | $1,939 |
| Indiana | $144 | $1,725 |
| Iowa | $141 | $1,688 |
| Kansas | $144 | $1,722 |
| Kentucky | $137 | $1,639 |
| Louisiana | $167 | $2,000 |
| Maine | $128 | $1,536 |
| Maryland | $140 | $1,686 |
| Massachusetts | $155 | $1,858 |
| Michigan | $140 | $1,677 |
| Minnesota | $138 | $1,655 |
| Mississippi | $148 | $1,780 |
| Missouri | $145 | $1,745 |
| Montana | $146 | $1,758 |
| Nebraska | $140 | $1,677 |
| Nevada | $167 | $2,000 |
| New Hampshire | $146 | $1,757 |
| New Jersey | $168 | $2,012 |
| New Mexico | $149 | $1,783 |
| New York | $171 | $2,055 |
| North Carolina | $128 | $1,532 |
| North Dakota | $128 | $1,535 |
| Ohio | $137 | $1,644 |
| Oklahoma | $138 | $1,656 |
| Oregon | $137 | $1,647 |
| Pennsylvania | $171 | $2,046 |
| Rhode Island | $162 | $1,947 |
| South Carolina | $152 | $1,827 |
| South Dakota | $138 | $1,655 |
| Tennessee | $144 | $1,724 |
| Texas | $148 | $1,781 |
| Utah | $139 | $1,673 |
| Vermont | $141 | $1,693 |
| Virginia | $134 | $1,611 |
| Washington | $167 | $2,007 |
| West Virginia | $155 | $1,855 |
| Wisconsin | $144 | $1,731 |
| Wyoming | $137 | $1,642 |
*Rates are for a three-person business with two employees, annual revenues of $300,000, $150,000 in payroll per year, and coverage limits of $1 million per claim and $2 million aggregate per year. Actual rates may vary based on your business profile and chosen insurer.
Business Insurance Cost by Coverage Type and Industry
Monthly business insurance costs vary dramatically by industry across these coverage types:
- General liability: $17 to $918
- Workers' comp: $6 to $836
- Professional liability (E&O): $37 to $166
- BOP insurance: $25 to $1,346
Pressure washing and other high-risk industries pay much more because they file more claims and face greater liability risks.
Below, you can review how much each coverage type costs for your industry.
Data filtered by:Results filtered by:
Select
Coverage_Type:General Liability
*Rates are for a three-person business with two employees, annual revenues of $300,000, $150,000 in payroll per year, and coverage limits of $1 million per claim and $2 million aggregate per year. Actual rates may vary based on your business profile and chosen insurer.
How to Lower Business Insurance Costs
Insurance costs eat into your business budget, but you can reduce them with the right approach. Here are proven strategies to reduce your commercial insurance expenses while maintaining financial protection:
- 1
Decide on coverage before buying
Determining your business's particular needs for insurance coverage will allow you to buy more confidently and not get unnecessary coverage, saving money in the long run.
- 2
Consider bundling policies and pay annually
Most business insurance companies offer some form of discount for paying annually or bundling with other commercial insurance types. If you want the lowest rates possible, consider doing this.
- 3
Shop around
Insurance premiums vary widely among insurers and the method you use. Get quotes from multiple insurance companies and through multiple means to ensure you get the best deal.
- 4
Manage workplace risks
Implementing risk management practices, such as safety protocols and employee training programs, can reduce the likelihood of claims and lower premiums.
- 5
Review your policy every year
As your business changes, so do your insurance needs and pricing. Regularly review your policy to make sure it still provides adequate coverage for the lowest price. You might also find areas where you can reduce coverage or increase deductibles to save money.
Cost of Business Insurance: Bottom Line
Average monthly business insurance costs vary widely, ranging from $6 to $1,346. Regardless of your business details, the best way to get the right commercial insurance for you is to compare plenty of options through multiple means, decide on coverage before buying and research before comparing.
Small Business Insurance Cost: FAQ
Below are our team's expert answers to frequently asked questions about business insurance costs:
How much is small business insurance?
The cost of business insurance varies based on the type of coverage. For instance, a company with two employees can expect to pay monthly premiums of $104 for general liability insurance, $74 for workers' compensation insurance and $78 for professional liability insurance.
Which business insurance type costs the most?
There's no one-size-fits-all answer to this question, and it mostly depends on your industry and coverage type. For example, workers' compensation insurance tends to be the least expensive policy for most small businesses, but it becomes much more expensive if you have a roofing or other contracting business.
How much business insurance do you need?
As a business owner, determining your insurance needs involves understanding your industry's risks, the nature of your operations and the value of your assets. Consider also any legal or contractual requirements for insurance. Consulting with an experienced insurance agent can provide valuable guidance in this decision-making process.
Is business insurance tax deductible?
Business insurance is typically tax-deductible. Premiums paid for business insurance are considered necessary and can be deducted from your taxable income. Consult a tax professional to understand tax implications for your business.
How We Determined Business Insurance Costs
We analyzed thousands of quotes from 79 industries for a two-employee firm with $300,000 annual revenue and $150,000 payroll across four coverage types. All policies featured $1 million per claim and $2 million aggregate annual limits, with BOP having a $5,000 limit for its property damage coverage portion.
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.