Small business insurance costs anywhere from about $14 to $124 a month, depending on the coverage types you buy—general liability, commercial property, business interruption insurance, inland marine, cyber liability and/or workers compensation. If you purchase all these coverage types, you could pay around $340 a month.

Small Business Insurance Costs at a Glance

On average, a business will spend between $30 and $340 a month, or $360 to over $4,000 a year, for small business insurance costs. Here’s a cost breakdown of some common types of insurance that a small business owner may consider.

Type of policy Average monthly cost Average annual cost
General liability insurance $30 $360
Commercial property insurance $63 (median) $756 (median)
Inland marine insurance $14 (median) $169 (median)
Cyber liability insurance $123.75 $1,485
Business interruption insurance $40 $480
Workers compensation $70 $840
Total average cost: $340.75 $4,090
Sources: The Hartford, Hiscox and Insureon

How Much Is General Liability Insurance?

General liability insurance costs around $30 a month, based on a Hiscox study. The study also found that 95% of business owners pay less than $50 a month, and only 1% pay over $100.

General liability insurance financially protects you from lawsuits or claims if your business is responsible for someone’s injuries or damaging someone else’s property.

What Factors Affect General Liability Insurance Premiums?

These four factors influence general liability insurance premiums the most:

  • Building size. Bigger buildings invite more opportunities for accidents to happen. So if you operate in a larger facility with more foot traffic, you could pay more.
  • Location. Businesses operating in high-risk areas with higher crime rates may pay more for liability insurance.
  • Size of payroll and annual revenue. The higher your expenses or operating costs, the more you can expect to pay for liability insurance.
  • Claims history. If you’ve filed general liability claims in the past, it could increase your premiums.
  • Policy details. Coverage limits, deductibles and other policy details affect your business insurance cost. Coverage limits include the per-occurrence limit, which is the most the insurance company will pay for a single claim, and aggregate limit, which is the most the insurance company will pay during the policy period.

How Much Is Commercial Property Insurance?

Commercial property insurance costs about $63 a year, according to Insureon. This is the median for a standard $60,000 coverage limit with a $1,000 deductible.

Insureon found that almost half (42%) of business owners pay between $46.67 to $83.33 a month for commercial property insurance, while 16% pay less than $46.67.

Commercial property insurance financially protects your business from losses if your business property is stolen or damaged by a fire, natural disaster or other problem.

What Factors Affect Commercial Property Insurance Costs?

Several factors can influence commercial property insurance costs:

  • Location. Operating in a high-risk area prone to natural disasters can increase premiums.
  • Building age and size. Insuring older or larger buildings will cost more than insuring smaller or newer buildings.
  • Types of fire protection. Having a sprinkler system, fire alarms and easy access to a fire department may reduce the price of your premiums.
  • Equipment costs. Commercial property insurance reimburses you for items lost or damaged on your property, so expect to pay more if you house expensive equipment.
  • Types of perils covered. Similar to home insurance, you’ll pay more if you need to cover additional perils for your business, such as floods, earthquakes or employee theft.

How Much Is Workers Compensation Insurance?

Workers compensation insurance costs $70 a month or $840 a year on average for businesses with less than $300,000 in payroll costs, according to The Hartford.

Workers compensation insurance is a type of insurance that helps employees who get injured while working. The insurance company typically helps pay for medical expenses and lost wages, among other things.

In most states, you’re legally required to have workers compensation if you have at least one employee. But workers comp laws vary by state. For instance, it’s not required if you operate in Alabama with less than five employees or in Arkansas with less than three employees. Workers comp insurance is not required in Texas or Wyoming.

What Factors Affect Workers Compensation Insurance Costs?

Three main factors impact costs for workers comp:

  • Payroll size. The larger your company and the bigger your payroll size, the more you can expect to pay for workers compensation insurance.
  • Employee job duties. Expect to pay more for employees who have riskier job duties. For instance, workers comp costs for office jobs will be lower than hands-on jobs like construction or mechanic work.
  • Location. If you live in a monopolistic state, such as North Dakota, Ohio, Wyoming or Washington, you’re required by law to buy state-funded workers comp. You have no other options. But in other states, you can shop around for workers comp quotes on the private market.

For all six types of policies above, expect to pay around $340.75 a month total, or $4,090 a year, on average.

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How Much Is Business Interruption Insurance?

The average cost of business interruption insurance is between $40 and $130 per month, or $500 and $1500 per year, according to Insureon.

If your business must be temporarily closed due to a loss covered by your policy, business interruption insurance helps to replace your income losses and pay operating expenses during that time. This includes lost revenues, mortgage, lease or rent payments, loan payments, taxes, payroll, relocation costs and training costs.

What Factors Affect Business Interruption Insurance Costs?

Three main factors will influence business interruption insurance costs:

  • Revenue. Since business interruption insurance covers lost revenue, the higher the company’s revenue, the higher the insurance premium will be to cover that.
  • Industry. Industries, like restaurants, are more likely to experience property damage and will pay a higher business interruption insurance premium.
  • Your business’s property value. Generally, the higher the value of your commercial property, the more you will pay for business interruption insurance.

How Much Is Inland Marine Insurance?

Inland marine insurance costs $14 a month or $169 a year, according to Insureon. This is the median cost for $5,000 in coverage.

Insureon found that a $5,000 coverage limit is the most popular choice among its customers for those in the landscaping, cleaning, installation and construction industries.

By comparison, photographers and videographers usually choose an $86,000 policy limit (which has a $580 median annual premium), while architects and engineers purchase higher coverage limits.

Inland marine insurance protects your business if something happens to your property or products while in transit. This could include goods being shipped to or from your business, or property used for work purposes (such as lawnmowers or camera equipment).

What Factors Affect Inland Marine Insurance Costs?

There’s one primary factor that influences inland marine insurance: Equipment or product costs. Small business owners who need to transport expensive equipment or products can expect to pay higher premiums for inland marine coverage.

How Much Is Cyber Liability Insurance?

Cyber liability insurance costs a median of $140 a month, or $1,675 a year, for small business owners, according to Insureon. About a quarter of businesses (27%) pay under $1,000 a year for cyber liability insurance.

A typical cyber insurance policy limit is $1 million per occurrence limit, a $1 million aggregate limit, with a $1,000 deductible, according to Insureon.

Cyber liability insurance pays out if your business experiences a cyberattack. This type of insurance can cover the costs associated with repairing or rebuilding your business after a cyberattack, as well as legal fees and settlements.

What Factors Affect Cyber Liability Insurance Costs?

There are several primary factors that impact cyber insurance costs:

  • Industry. Companies that are more exposed to cyber risk may need policies with higher coverage levels and, therefore, higher premiums.
  • Your company’s revenue and costs. The higher your revenue, expenses and operating costs, the more you can expect to pay for cyber insurance.
  • Your network security. Strong network security practices, or a lack of them, impact your risk for cyber claims.
  • The number of people who have access to your systems and data. More access rights may mean more risk, resulting in higher premiums.
  • Your claims history. Past cyber insurance claims may impact future cyber insurance premiums.

How To Lower Small Business Insurance Costs

Business insurance is an important way to protect a company from costly damages. It can be a significant expense, especially for small businesses.

One of the best ways you can save is by purchasing a business owners policy (BOP). A BOP bundles three essential coverage types: general liability insurance, commercial property insurance and business interruption insurance. It’s usually cheaper to buy a BOP rather than three separate policies.

Here are some more tips to lower business insurance costs:

  • Shop around and compare quotes from multiple insurance companies.
  • Bundle multiple policies together from the same insurer, such as property and liability insurance.
  • Pay your premiums annually instead of monthly.
  • Raise your deductible—if you can afford the out-of-pocket costs you’d pay to file a claim.
  • Avoid risks that could lead to a claim.