How much does insurance cost for professional services?

Professional services businesses pay an average of $29 per month, or $350 per year, for general liability insurance.

General liability insurance helps cover legal fees related to common third-party lawsuits from clients, including those related to bodily injuries, property damage, and advertising injuries. For example, a client could slip on a wet floor in your office, then sue your business to recoup the cost of medical treatment for their injury.

This is the average general liability policy for professional services businesses that buy from Insureon:

Insurance premium: $29 per month
Policy limits: $1 million per occurrence; $2 million aggregate

The cost of general liability insurance depends on several factors, such as the coverage limits you choose, the size of your business, the amount of foot traffic you have, your location, and any endorsements on your policy, such as an additional insured.

General liability insurance costs increase with the likelihood of customer lawsuits, such as someone suing your business over a slip-and-fall injury. That's why businesses with a storefront or an office that is open to the public can expect to pay more for this coverage than a home-based business.

This leads to a wide range of insurance premiums for different professions. Among professional services businesses that purchase general liability insurance with Insureon, 60% pay less than $30 per month and 92% pay $60 or less per month.

Professions that involve riskier and more frequent interactions with customers or their property typically pay more for general liability insurance.

For example, pest control businesses pay a high rate of $117 per month, on average, as they work in many clients' homes and offices with potentially hazardous chemicals. Tutors, lawyers, and other professionals who do less risky work with a limited number of clients have a lower average rate of $29 per month.

As you can see, the cost varies for different types of professional services:

Policy limits are the maximum amounts your insurance company will pay for covered claims.

The per-occurrence limit is the most your insurer will pay for claims resulting from a single incident, while the aggregate limit is the most your insurer will pay for any claims during your policy period, typically one year.

Most professional services businesses (89%) choose a general liability policy with a $1 million per-occurrence limit and a $2 million aggregate limit. As your small business grows, you may need to raise your policy limits.

Choosing lower limits is one way your small business can save money on general liability insurance, though you'll still want enough coverage to handle a lawsuit.

Small businesses that provide professional services pay an average of $47 per month, or $566 per year, for a business owner’s policy.

A business owner's policy, or BOP, bundles general liability coverage with commercial property insurance to cover both third-party risks and your business property. It typically costs less than purchasing each policy separately.

A BOP protects against customer injuries and property damage. It also covers damage to your building, equipment, and inventory. Because of its increased coverage and affordability, it’s the policy most often recommended by Insureon’s agents.

Adding endorsements to your BOP raises the premium, but it can be worth it for the extra coverage. For example, you can include business interruption insurance to protect against financial losses if a fire or storm forces your business to close temporarily.

Small, low-risk businesses are typically eligible for a business owner's policy. Additionally, small businesses that offer professional services can often bundle this policy with professional liability insurance at a discount.

The cost of a business owner's policy is based on a number of factors, including the value of your property, where you are located, the number of employees you have, and your profession.

Businesses that own a large building or expensive equipment can expect to pay more for a BOP than businesses with smaller premises or lower value business property. This is the biggest single factor that providers will consider when determining your premium.

The condition of your building can also affect your BOP and property insurance costs. For example, a recruiting agency based in an old, drafty building that needs repairs can expect to pay more for coverage than one in a newer office space that's less likely to have issues.

Businesses that provide professional services pay an average premium of $43 per month, or $516 per year, for professional liability insurance. You might also see this coverage called errors and omissions insurance (E&O) or malpractice insurance, depending on the industry.

This policy offers critical coverage for any professional services firm, including consulting firms, travel agencies, and employment agencies. It helps pay for legal costs if you're accused of professional negligence, such as a mistake, oversight, or failure to meet a standard of care.

For example, if a notary public misses an appointment to sign an important document before a client's deadline, this policy would cover the costs of the resulting lawsuit.

This is the average professional liability policy for professional services businesses that buy from Insureon:

Premium: $43 per month
Policy limits: $1 million per occurrence; $1 million aggregate
Deductible: $1,000

Professional services businesses can often combine this coverage in a business owner’s policy or general liability policy for savings. Many factors can affect the cost of professional liability insurance, such as your line of work, your claims history, and the policy limits you choose.

Businesses face different levels of risk, which results in a wide range of premiums for professional liability insurance. Among professional service providers that purchase professional liability insurance with Insureon, 57% pay less than $50 per month and 81% pay $100 or less per month.

It's possible to reduce your costs by selecting lower limits or a higher deductible. You can also manage your risks to avoid lawsuits and subsequent claims that would otherwise raise your premium.

Insurers will look at the rate of professional liability lawsuits for your specific profession when calculating your premium. If your advice or services could directly impact a client's finances, then you face a higher risk of this kind of lawsuit.

Talent agents, recruiters, and other professionals whose mistakes can have serious financial repercussions for clients can expect to pay more for this policy. On the other hand, process servers and travel agents will see lower rates since they are less likely to face a lawsuit.

The average monthly cost of professional liability insurance is $136 for a talent agency, but only $37 per month for a process server. As you can see, the cost varies significantly depending on your profession.

For professional services businesses, workers’ compensation insurance costs an average of $49 per month, or $583 per year.

This insurance policy covers medical expenses when an employee is injured on the job, and it also provides disability benefits while they're recovering and unable to work.

To comply with your state’s requirements and avoid penalties, businesses with employees typically must purchase this coverage. It's also recommended for sole proprietors, as health insurance plans can deny claims for medical bills when an injury or illness is related to your job.

Most policies include employer's liability insurance, which covers the cost of lawsuits related to workplace injuries. There's usually no limit to how much a workers' comp policy can pay for employee benefits, though it depends on state laws.

The cost of workers' compensation insurance depends on several factors, including the number of employees you have and the level of risk involved with their jobs.

Get more information on how to find affordable workers' compensation coverage.

Among professional services firms that buy workers’ compensation insurance with Insureon, 52% pay less than $50 per month and 78% pay $100 or less per month.

Workers' comp costs depend on the number of employees you have in your small business. A larger workforce brings a higher risk of worker injuries, which is why bigger businesses tend to pay more for this type of insurance.

Small businesses that provide professional services pay an average of $163 per month for commercial auto insurance, or $1,954 annually.

Most states require this coverage for vehicles that are owned by a business, such as patrol cars owned by a security company. For personal, rented, and leased vehicles used by your business, look to hired and non-owned auto insurance (HNOA) instead.

A commercial auto policy provides financial protection in the event of an accident involving your business vehicle. It can help pay for property damage, medical costs, and legal expenses.

The cost of commercial auto insurance depends on several factors, including your policy limits, the value of the vehicles, and the driving records of anyone permitted to drive. The types of auto insurance you choose, such as comprehensive coverage, will also affect your premium.

Learn more about how to find affordable commercial auto insurance coverage.

Companies that offer professional advice or services pay an average of $123 per month, or $1,480 annually, for cyber insurance. This policy is also called cyber liability insurance or cybersecurity insurance.

Cyber insurance helps businesses recover financially after a data breach or cyberattack. It can help pay for customer notification costs, fraud monitoring services, and other expenses necessitated by state data breach laws.

The cost of cyber insurance depends on the amount of personal information handled by your professional services firm, such as customer credit card numbers, along with the number of employees who can access that information.