Startup business insurance costs vary significantly by coverage type. MoneyGeek's analysis shows monthly premiums range from $13 for workers' compensation to $72 for professional liability coverage.
How Much Does Startup Business Insurance Cost?
Business insurance for startups can cost as little as $13 per month, though your specific business details and coverage needs will determine your final rate.
Discover cheap startup business insurance below.
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Updated: August 20, 2025
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Key Takeaways
Startup business insurance costs range from $13 to $72 monthly, with general liability and professional liability coverage showing the biggest price differences.
Your startup insurance premiums depend on location, claims history, property types serviced and employee count.
Shop multiple insurers, bundle policies, increase deductibles and pay annually to find affordable startup business insurance costs.
Average Startup Business Insurance Cost Overall
| BOP | $43 |
| General Liability | $29 |
| Professional Liability (E&O) | $72 |
| Workers' Comp | $13 |
How did we determine these rates?
These rates are for small businesses with two employees across 79 major industries or business types and focus on four coverage types: general liability, professional liability/E&O, workers' comp and business owner's policy. Survey results reflect limited sample data and may not represent all available rates in your area.
Startup Business Insurance Cost for General Liability Coverage by State
Your startup business insurance costs for general liability coverage depend on location. North Carolina offers the most savings at $25 monthly (versus the $29 national average), while Louisiana costs $34 monthly.
| Alabama | $28 |
| Alaska | $29 |
| Arizona | $27 |
| Arkansas | $28 |
| California | $32 |
| Colorado | $29 |
| Connecticut | $31 |
| Delaware | $31 |
| Florida | $31 |
| Georgia | $29 |
| Hawaii | $32 |
| Idaho | $27 |
| Illinois | $32 |
| Indiana | $28 |
| Iowa | $27 |
| Kansas | $28 |
| Kentucky | $26 |
| Louisiana | $34 |
| Maine | $25 |
| Maryland | $27 |
| Massachusetts | $30 |
| Michigan | $27 |
| Minnesota | $27 |
| Mississippi | $29 |
| Missouri | $29 |
| Montana | $29 |
| Nebraska | $27 |
| Nevada | $32 |
| New Hampshire | $29 |
| New Jersey | $33 |
| New Mexico | $29 |
| New York | $33 |
| North Carolina | $25 |
| North Dakota | $25 |
| Ohio | $27 |
| Oklahoma | $28 |
| Oregon | $27 |
| Pennsylvania | $33 |
| Rhode Island | $32 |
| South Carolina | $30 |
| South Dakota | $27 |
| Tennessee | $28 |
| Texas | $29 |
| Utah | $27 |
| Vermont | $28 |
| Virginia | $26 |
| Washington | $33 |
| West Virginia | $30 |
| Wisconsin | $28 |
| Wyoming | $27 |
How did we determine these rates?
These rates are for small businesses with two employees across 79 major industries or business types and focus solely on general liability policies. Survey results reflect limited sample data and may not represent all available rates in your area.
Startup Business Insurance Cost for Workers’ Compensation Coverage by State
Your startup business cost for workers' compensation varies by state. Maine offers the lowest rates at $11 monthly and New York the highest at $15 monthly. Our analysis reveals how state regulations and claim histories create these differences.
| Alabama | $13 |
| Alaska | $12 |
| Arizona | $12 |
| Arkansas | $12 |
| California | $15 |
| Colorado | $13 |
| Connecticut | $14 |
| Delaware | $14 |
| Florida | $14 |
| Georgia | $13 |
| Hawaii | $14 |
| Idaho | $12 |
| Illinois | $14 |
| Indiana | $13 |
| Iowa | $12 |
| Kansas | $13 |
| Kentucky | $12 |
| Louisiana | $15 |
| Maine | $11 |
| Maryland | $12 |
| Massachusetts | $14 |
| Michigan | $12 |
| Minnesota | $12 |
| Mississippi | $13 |
| Missouri | $13 |
| Montana | $13 |
| Nebraska | $12 |
| Nevada | $15 |
| New Hampshire | $13 |
| New Jersey | $15 |
| New Mexico | $13 |
| New York | $15 |
| North Carolina | $11 |
| Oklahoma | $12 |
| Oregon | $12 |
| Pennsylvania | $15 |
| Rhode Island | $14 |
| South Carolina | $13 |
| South Dakota | $12 |
| Tennessee | $13 |
| Texas | $13 |
| Utah | $12 |
| Vermont | $13 |
| Virginia | $12 |
| West Virginia | $14 |
| Wisconsin | $13 |
How did we determine these rates?
These rates are for small businesses with two employees across 79 major industries or business types and focus solely on workers’ comp policies. Workers' compensation requirements vary by state and are mandated by state regulations. Survey results reflect limited sample data and may not represent all available rates in your area.
Startup Business Insurance Cost for Professional Liability Coverage by State
Like other business coverage types, your cost for professional liability varies by state. The national average runs $73 monthly. Maine offers the lowest rates at $63 monthly for E&O insurance, while Pennsylvania charges the highest at $83 monthly.
| Alabama | $70 |
| Alaska | $65 |
| Arizona | $69 |
| Arkansas | $68 |
| California | $81 |
| Colorado | $73 |
| Connecticut | $78 |
| Delaware | $76 |
| Florida | $78 |
| Georgia | $73 |
| Hawaii | $74 |
| Idaho | $68 |
| Illinois | $80 |
| Indiana | $70 |
| Iowa | $68 |
| Kansas | $68 |
| Kentucky | $66 |
| Louisiana | $81 |
| Maine | $63 |
| Maryland | $70 |
| Massachusetts | $76 |
| Michigan | $69 |
| Minnesota | $67 |
| Mississippi | $72 |
| Missouri | $73 |
| Montana | $71 |
| Nebraska | $68 |
| Nevada | $82 |
| New Hampshire | $72 |
| New Jersey | $82 |
| New Mexico | $71 |
| New York | $83 |
| North Carolina | $63 |
| North Dakota | $63 |
| Ohio | $67 |
| Oklahoma | $67 |
| Oregon | $66 |
| Pennsylvania | $83 |
| Rhode Island | $79 |
| South Carolina | $74 |
| South Dakota | $68 |
| Tennessee | $70 |
| Texas | $73 |
| Utah | $68 |
| Vermont | $70 |
| Virginia | $67 |
| Washington | $83 |
| West Virginia | $76 |
| Wisconsin | $71 |
| Wyoming | $68 |
How did we determine these rates?
These rates are for small businesses with two employees across 79 major industries or business types and focus solely on professional liability policies. Survey results reflect limited sample data and may not represent all available rates in your area.
Startup Business Insurance Cost for BOP Coverage by State
Business owner's policy rates show notable state-by-state cost differences for startup businesses. Monthly premiums in Pennsylvania run $49, while North Dakota businesses pay just $36 for the same coverage.
| Alabama | $41 |
| Alaska | $42 |
| Arizona | $40 |
| Arkansas | $41 |
| California | $48 |
| Colorado | $42 |
| Connecticut | $47 |
| Delaware | $46 |
| Florida | $46 |
| Georgia | $43 |
| Hawaii | $47 |
| Idaho | $42 |
| Illinois | $47 |
| Indiana | $43 |
| Iowa | $41 |
| Kansas | $42 |
| Kentucky | $38 |
| Louisiana | $49 |
| Maine | $37 |
| Maryland | $40 |
| Massachusetts | $44 |
| Michigan | $39 |
| Minnesota | $40 |
| Mississippi | $42 |
| Missouri | $42 |
| Montana | $42 |
| Nebraska | $40 |
| Nevada | $47 |
| New Hampshire | $42 |
| New Jersey | $49 |
| New Mexico | $43 |
| New York | $49 |
| North Carolina | $37 |
| North Dakota | $36 |
| Ohio | $40 |
| Oklahoma | $42 |
| Oregon | $41 |
| Pennsylvania | $49 |
| Rhode Island | $47 |
| South Carolina | $43 |
| South Dakota | $40 |
| Tennessee | $41 |
| Texas | $43 |
| Utah | $39 |
| Vermont | $40 |
| Virginia | $38 |
| Washington | $49 |
| West Virginia | $44 |
| Wisconsin | $41 |
| Wyoming | $39 |
How did we determine these rates?
These rates are for small businesses with two employees across 79 major industries or business types and focus solely on BOP coverage. Survey results reflect limited sample data and may not represent all available rates in your area.
Factors Affecting Startup Business Insurance Cost
Your startup business insurance costs are based on several factors that insurance companies review to set premiums. Understanding these elements helps with budget planning. Below, we explain how different factors affect your rates.
Geographic location
Your business location affects workers' compensation rates due to local regulations and claim frequencies. Operating in natural disaster-prone areas or high-crime neighborhoods increases your risk profile, and state differences create substantial premium variations.
Safety record and claims history
Previous claims impact future premiums, sometimes for three to five years. A single slip-and-fall lawsuit can substantially increase your general liability rates at renewal.
Employee count and payroll
Insurers calculate workers' comp premiums based on your total payroll and job classifications. Adding employees increases your payroll costs, directly impacting your workers' compensation premiums since insurers calculate your rates per dollar of wages paid.
Business size and revenue
Higher annual revenue typically means higher premiums since insurers view larger operations as having greater exposure to claims. A startup generating $100,000 in annual revenue faces lower premiums than an established company earning $1 million.
Coverage limits
Higher coverage limits provide better protection but cost more monthly. Choosing between different coverage amounts directly affects your premium, with higher limits increasing costs proportionally.
Credit score and financial stability
In most states, insurers can consider your business credit score when setting rates. A strong credit score can reduce premiums, while poor credit often increases costs substantially.
How to Get Cheap Startup Business Insurance
Smart shopping and risk management strategies can significantly reduce startup business insurance costs, and these proven methods will help lower your premiums both now and as your business grows.
- 1
Choose the right coverage types for your business
Understanding what types of business insurance your startup needs prevents overpaying for unnecessary coverage. General liability insurance protects against customer injuries and property damage claims. Professional liability coverage guards against errors in your services, while workers compensation becomes essential once you hire employees.
- 2
Shop multiple insurance companies
Insurance rates can vary significantly between providers for identical coverage. Compare quotes from at least three insurers to find the best rates. Consider working with an independent agent who can handle comparison shopping for you.
- 3
Bundle your coverage types
Insurance providers typically offer substantial discounts for bundled policies. Combining multiple coverage types like general liability, professional liability and commercial property with one carrier usually costs less than separate policies from different insurers.
- 4
Increase your deductibles
Choosing higher deductibles reduces your monthly premium costs. While you'll pay more out-of-pocket when filing a claim, the monthly savings can benefit startups with healthy cash reserves and good risk management practices.
- 5
Pay annually instead of monthly
Monthly payment processing fees can significantly increase your total insurance costs. Paying your premium annually eliminates these extra charges and often qualifies you for additional discounts from insurers.
- 6
Review and adjust your coverage annually
Your insurance needs change as your startup grows. Review your coverage yearly to ensure it matches your current business size and operations. Remove unnecessary coverage and adjust limits based on your evolving risk exposure.
Insurance for Startup Business Cost: Bottom Line
Startup business insurance costs range from $13 to $72 monthly, with your location, claims history and business size driving your premium. Getting quotes from multiple insurers, bundling your policies, choosing higher deductibles and paying annually helps you find more affordable rates.
Startup Business Insurance Cost: FAQ
Startup business owners ask many questions about insurance costs, so we gathered expert answers to the most common pricing questions below.
What is the cheapest type of startup business insurance?
Workers' compensation insurance costs $13 monthly, but only covers employee injuries. Most startups need general liability coverage to protect against customer accidents and property damage claims.
How much can I save by bundling my startup business insurance policies?
General liability insurance is typically the most cost-effective option, averaging $29 per month. Bundling multiple policies with one carrier can provide additional savings through package discounts.
What factors make my startup business insurance more expensive?
Insurance costs may be more expensive based on factors like business location, claims history, startup specialties and number of employees.
Should I choose a $500 or $2,500 deductible for my startup business insurance?
Higher deductibles mean lower monthly premiums but require more out-of-pocket costs when filing claims. Consider your available cash flow and claim frequency when choosing your deductible.
How much does workers' compensation cost for startup businesses by state?
Workers' compensation costs for startups range from $11 monthly in Maine to $15 monthly in New York, varying significantly by state location and specific requirements.
Is business owner's policy (BOP) worth the extra cost for startup companies?
A BOP costs $43 monthly and bundles general liability, commercial property and business interruption coverage into one policy. This package provides value for your money.
How often should I shop around for startup business insurance quotes?
Review your business insurance annually during renewal time and compare at least three providers to find better rates, particularly if your company has grown or changed services.
How We Determined Startup Business Insurance Costs
We collected startup business insurance quotes from companies across different states. For consistent comparisons, every quote used the same business setup:
- Two employees (three people total, including the owner)
- $150,000 annual payroll
- $300,000 annual revenue
- Already insured status
- $1 million per occurrence and $2 million total per year for all coverage except BOP, which includes the same limits plus $5,000 business property coverage
This profile represents small startup businesses requiring comprehensive insurance coverage in most states. We chose companies offering broad national coverage and online quote capabilities, focusing on insurers that actively serve the startup industry.
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.