How Much Does Small Business Insurance Cost on Average?

For the types of business insurance most small business owners need, average insurance costs range from $885 to $1,785 per year in aggregate. However, this represents only an overall average for a three-person business with two employees for five of the most common coverage types, and costs will vary depending on your industry, business size, state and policy needs. So below we broke down the small company business insurance costs for policy types you'll likely come across in your comparison journey.

Below we've summarized the factors that affect small business insurance costs:

• 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.

At the provider level, average small business insurance rates vary anywhere from $69 to $178 per month considering coverage type selection.

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.

Monthly small business insurance costs vary dramatically by industry across these coverage types with rates as low as $6 for DJ companies and $1,346 for pressure washing firms.. Below, you can review how much each coverage type costs for your industry.

Average monthly small business insurance costs vary widely, ranging from $10 to $1,991. Regardless of your business details, the way to get the best commercial insurance for you is to compare plenty of options through multiple means, decide on coverage before buying and research before comparing.