If we had to pin down the most common question we hear from our small-business clients, this question wins by a landslide. Many small businesses have tight budgets to contend with, so why wouldn't they worry about insurance costs?
So we pulled the pricing data and crunched the numbers from some of the thousands of businesses we've insured in 2014. The result? We created several resources to help shed light on this tricky question.
Small Business Insurance Cost Guides
Before you take these numbers as gospel, here are a few disclaimers: the average and median policy prices represented on the following pages are not quotes. These numbers are based on data and are intended to give you an idea about how much insurance may cost. Your actual rates depend on your business's exact characteristics.
Check out these resources for descriptive pricing analyses. There are charts and graphs for all our visual learners out there!
- Cost of small business insurance. Visit this page to get a general overview of how much small-business owners typically pay for coverage. You'll discover that the average cost of one small business insurance policy in 2014 was $725.33 (and the median cost was $500), regardless of the size of the business, industry, or type of policy. However, the number of policies is the biggest cost factor (more policies = more money spent).
- Cost of General Liability Insurance. Visit this page to learn more about the typical pricing for a GL policy. According to our data, the average annual premium for General Liability Insurance was $575.16 with a median price of $425.
- Cost of Professional Liability / E&O Insurance. Visit this page to get some ballpark figures on the cost of coverage for professional oversights. For small businesses, the average annual cost of Professional Liability Insurance was $985.49 with a median price of $758.00.
- Cost of Workers' Compensation Insurance. Check out our resources on the typical cost of Workers' Comp policies. These vary considerably by state and profession, so the breakdown is pretty interesting to see.
Looking for a more detailed, industry-specific breakdown of insurance costs? We have resources for that, too. Check out the sample cost analyses / sample quotes on our dedicated microsites below:
- Architects & Engineers.
- Contractors, Builders & Other Construction Professionals.
- Insurance Agents & Agencies.
- IT Businesses, Consultants & Subcontractors.
- Janitors, Maids, and Other Cleaning Businesses.
- Restaurants, Bars, Catering & Other Food Services Businesses.
Again, the figures represented on these pages are just to give you a sense of typical premium rates. To give you a better idea of how your premiums are determined, let's recap some factors that affect the price of your coverage.
Behind the Price of a Small Business Insurance Policy
Small business insurance costs depend on several factors, including…
- Type of policy a business purchases. For example, General Liability Insurance is one of the least expensive policies we sell, whereas Employment Practices Liability Insurance tends to be the priciest.
- Size of the business. Your physical building affects your General Liability and Property Insurance needs.
- Industry. This plays a key role in your risk profile. Businesses in high-risk industries may have slightly higher insurance rates.
- Location. Your location impacts the value of your commercial real estate, the state insurance laws you must comply with, and geographical risks that can jeopardize your physical assets. Learn more about how your location affects your insurance needs in our guide "Small Business Insurance by State."
- Revenue. Generally, the more money you make, the more you stand to lose in a lawsuit.
- Number of employees. The number of employees affects your Workers' Compensation Insurance rates.
If you want to get an actual quote for your business – one that accurately accounts for all these nitty-gritty details – you'll need to fill out an online insurance application.