Key Takeaways

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For the most often needed coverages, average business insurance costs range from $74 to $147 per month.

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Your business insurance costs will vary widely mainly due to factors like industry, business size, location, claims history and coverage type chosen.

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You can get lower business insurance costs by deciding on coverage needs beforehand, doing prior research, shopping around and by implementing risk mitigation tactics.

How Much Does Business Insurance Cost?

For the types of business insurance that most small business owners need, average insurance costs range anywhere from $885 to $1,767 per year. However, this only represents an overall average for a three-person business with two employees and cost 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 shown are for a three-person business with 2 employees that has 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.

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What Factors Affect Small Business Insurance Costs?

The cost of small business insurance is influenced by several factors, including your company's industry, size and location.

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    Industry

    The specific industry a business operates in significantly affects the cost of insurance. Businesses in sectors with a higher risk of claims, such as construction or health care, typically pay higher premiums than those in lower-risk industries.

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    Business size

    Larger businesses often face higher insurance costs due to the increased risk of managing more employees and operations. Because of this, a business with multiple employees will usually pay more for insurance than a sole proprietorship.

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    Location

    The geographical location of a business can impact insurance costs. Operating in areas with higher claim rates, more severe weather conditions or higher costs of living can lead to increased premiums.

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    Claims history

    A business with a history of insurance claims will likely face higher premiums, as insurers view such businesses as more likely to make future claims.

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    Coverage amounts and deductibles

    The levels of coverage a business chooses also impact the cost of insurance coverage. Higher coverage limits and lower deductibles typically result in higher premiums, as the insurer is taking on a greater financial risk.

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    Risk management practices

    Businesses that implement robust risk management practices may be rewarded with lower premiums. These practices can include adhering to safety protocols, conducting employee training programs and adhering to industry best practices.

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    Insurance company

    The chosen insurer can also affect the cost of coverage. 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, business insurance costs can range anywhere from $64 to $171 per month on average. However, this also depends on your firm's coverage needs. So below, we've summarized costs for 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 on the low end and $1,444 on the highest end by state. However, due to the nature of this coverage being around liability and property damage, most costs will 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 shown are for a three person business with 2 employees that has 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.

Workers Comp Insurance Cost By State

Depending on your state, workers comp insurance costs can be as low as $64 per month or as high as $85 monthly. Workers' compensation is the least expensive overall for most small businesses due to smaller business sizes and oftentimes lower risk business types being more common 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 shown are for a three person business with 2 employees that has 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.

Professional Liability (E&O) Insurance Cost By State

Costs for professional liability or E&O insurance costs range anywhere from $67 to $90 per month or $807 or $1,077 per year. This policy type is the second least expensive common coverage type according to our study.

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 shown are for a three person business with 2 employees that has 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.

BOP Insurance Cost By State

BOP insurance costs can vary anywhere from $128 to $171 per month depending on the state your business operates in. These policies are the most expensive common coverage type due to their bundling of general liability, business property, and commercial interruption insurance. Below you can review average costs for a Business Owners Policy for your area.

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 shown are for a three person business with 2 employees that has 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.

Business Insurance Cost By Coverage Type and Industry

For the coverage types we studied, business insurance costs ranged by industry between the following price points:

  • General Liability: $17 to $918 per month
  • Workers Comp: $6 to $836 per month
  • Professional Liability (E&O): $37 to $166 per month
  • BOP Insurance: $25 to $1,346 per month

Below you can review how much each coverage type costs for your industry.

Data filtered by:Results filtered by:
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Coverage_Type:General Liability
Accountants$22$266
Ad Agency$36$429
Auto Repair$153$1,839
Automotive$54$643
Bakery$91$1,089
Barber$45$537
Beauty Salon$67$806
Bounce House$70$846
Candle$55$661
Cannabis$67$807
Catering$89$1,064
Cleaning$133$1,596
Coffee Shop$90$1,083
Computer Programming$29$353
Computer Repair$48$572
Construction$177$2,125
Consulting$22$265
Contractor$256$3,067
Courier$196$2,353
DJ$26$307
Daycare$33$396
Dental$22$259
Dog Grooming$64$763
Drone$17$201
Ecommerce$73$882
Electrical$113$1,353
Engineering$40$482
Excavation$468$5,617
Florist$43$517
Food$108$1,296
Food Truck$141$1,693
Funeral Home$61$728
Gardening$113$1,353
HVAC$246$2,956
Handyman$245$2,943
Home-based$24$287
Hospitality$66$790
Janitorial$138$1,653
Jewelry$41$490
Junk Removal$163$1,957
Lawn/Landscaping$121$1,453
Lawyers$23$275
Manufacturing$65$782
Marine$28$337
Massage$97$1,160
Mortgage Broker$23$276
Moving$125$1,499
Nonprofit$36$432
Painting$144$1,733
Party Rental$80$957
Personal Training$24$288
Pest Control$32$388
Pet$56$675
Pharmacy$62$746
Photography$24$292
Physical Therapy$113$1,352
Plumbing$363$4,361
Pressure Washing$918$11,022
Real Estate$53$635
Restaurant$146$1,753
Retail$66$790
Roofing$389$4,672
Security$140$1,675
Snack Bars$118$1,414
Software$27$319
Spa/Wellness$107$1,281
Speech Therapist$31$377
Startup$29$346
Tech/IT$27$320
Transportation$38$453
Travel$21$252
Tree Service$131$1,567
Trucking$103$1,234
Tutoring$31$367
Veterinary$45$539
Wedding Planning$28$336
Welding$166$1,987
Wholesale$45$538
Window Cleaning$160$1,919

*Rates shown are for a three person business with 2 employees that has 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.

How to Lower Business Insurance Costs

As a small business owner, there are several steps you can take to get the cheapest commercial insurance possible:

  1. 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. 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. So if you want the lowest rates possible, consider doing this.

  3. 3

    Shop around

    Insurance premiums can vary significantly among insurers and the method you use. Get quotes from multiple insurance companies and through multiple means to ensure you're getting the best deal.

  4. 4

    Manage workplace risks

    By implementing risk management practices, such as safety protocols and employee training programs, you can reduce the likelihood of claims and potentially lower your premiums.

  5. 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 costs vary widely for business insurance being as high as $1,346 per month or as low as $6 per month. Regardless of your business details, comparing plenty of options through multiple means, deciding on coverage before buying and researching before comparing is the best way to get the right commercial insurance for you.

Small Business Insurance Cost: FAQ

Below we've summarized our team's expert answers to frequently asked questions about business insurance costs:

How much is small business insurance?

Which business insurance type costs the most?

How much business insurance do you need?

Is business insurance tax deductible?

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


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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.


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