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.
Business Insurance Cost
Updated: July 15, 2025
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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 widely mainly due to factors like industry, business size, location, claims history and coverage type chosen.
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?
| 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.
FIND THE BEST CHEAP BUSINESS INSURANCE FOR YOU
To support you on your buying journey, we've provided the following guides to help you get the best fit for coverage:
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.
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.
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.
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.
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.
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.
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.
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:
Select
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
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. So if you want the lowest rates possible, consider doing this.
- 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
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
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?
The cost of business insurance varies based on the type of coverage. For instance, a company with 2 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 is no one size fits all answer to this question and mostly this depends on your industry and the coverage type. For example, workers comp insurance tends to be the least exepensive policy for most small businesses, but 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. You should also consider 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?
Yes, business insurance is typically tax deductible. Premiums paid for business insurance are generally considered a necessary business expense and can be deducted from your taxable income. However, it's always advisable to consult with a tax professional to understand specific 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.