Business Insurance Cost
Cost Related Details for Business Insurance
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Starting your own business is exciting and fulfilling, but it will also expose you to many risks. This is where business insurance comes into play. While no insurance policy can make entrepreneurship risk-free, business insurance protects you and your business against potential lawsuits, employee injuries, and car accidents.
How much does business insurance cost?
Small business insurance can range from $600 to $1,200 or more per month, depending on the size of your business, number of employees, and insurance needs. Your business will likely need several different types of business policies, and knowing the average cost of small business insurance will help you find the best policy at the best price for your business’s unique needs.
Here are some of the most common types of business insurance you may need and their average costs.
General liability insurance
General Liability Insurance covers claims for personal injury, property damage, and libel (including defamation, slander, and copyright infringement claims against your business). Think of it as the business version of home insurance. General liability insurance is not usually a legal requirement, but obtaining a specific license or contract is often necessary. The average cost of general liability insurance is about $65 to $88 per month.
Professional liability insurance
If your business provides professional services or advice, professional indemnity insurance or E&O insurance protects you from labor claims, including errors, omissions, and negligence. For example, a real estate agent who overlooks mold in the basement could be held liable for damages. The average cost of professional liability insurance is about $56 to $117 per month.
States have different requirements for industries and occupations requiring professional liability insurance. For example, some states require a real estate agent to have E&O insurance for her, while others do not. So, check with your local insurance agent for your needs.
Workers’ Compensation Insurance
Workers’ Compensation Insurance compensates for benefits and lost wages if an employee is involved in an accident while on the job. Most states, including California, Illinois, and New York, require business owners to have workers’ compensation insurance when hiring their first employee.
Most workers’ compensation insurance costs are based on labor costs, so the more employees you hire, the higher the premium. Workers’ compensation insurance costs about $70 to $111 per month per employee.
Commercial Vehicle Insurance
Commercial auto insurance covers accidents in company vehicles. It is required (in all states except New Hampshire and Virginia) if your business owns cars, trucks, construction vehicles, or delivery trucks.
The average cost of commercial auto insurance is about $135 to $188 per month.
Business owner policy
Business insurance combines the protection of general liability insurance and commercial property insurance into one plan. However, the details will depend on your needs and what your provider offers. In addition to general liability insurance protection, the business owner policy covers accidents, theft, and vandalism on your property—the average business owner’s policy costs from about $99 to $261.
What are the determining facts for Business Insurance costs?
Nature of business
For small businesses, it’s important to understand that different insurance policies have different costs. One way to avoid overspending on insurance is to use a Business Owner Policy to bundle various insurance coverage.
Many business owners make the mistake of purchasing various insurance policies to protect themselves in all aspects. Bundling insurance allows you to combine general liability, commercial property, and business interruption insurance to offset the costs associated with these premiums.
The industry you work in plays a vital role in determining the cost of insurance. Some occupations pose more significant risks than others. For example, insurance costs will likely increase if a business trades in dangerous equipment or is exposed to potential hazards.
A good example is that companies in the construction industry pay insurance premiums than accounting firms. Large installations involved in construction require greater responsibility due to the associated risks.
Number of previous claims
Insurance costs increase when historical data indicates risk. The number of claims against your company and the claims you file can affect the cost of insurance. Additionally, most insurers use this information to determine whether it poses a significant risk.
It is wise to research eligible discounts to lower the cost of the coverage offered. Again, however, we encourage you to consult with your representative to resolve any changes to your current scope without compromising the security of your business.
These days, it is common for small business owners to purchase more expensive insurance policies for the safety of their business and employees in the event of an accident. However, the higher the limit, the higher the cost of insurance coverage for your business. Avoid additional costs from overpaying your premium by consulting a professional about reasonable limits.
Why does a small business need to compare quotes?
If you’re looking for new insurance or want different insurance options, comparing quotes will help you choose the appropriate policy at an affordable price. Finding a reputable insurance company is a great place to start. This will help you understand what to cover and other important non-tariff considerations. By comparing offers, businesses estimate insurance limits and deductibles and choose their required insurance coverage.
Save money on business insurance costs
Here are some ways to save money while purchasing business insurance coverage. They are:
Understand your insurance needs
Every business has its risks and, therefore, its own insurance needs. At a minimum, businesses with employees are required by law to have workers’ compensation, unemployment, and, in some areas, disability insurance. Regardless of company size, what is right for one company may not be right for another. So do your homework and pay for the insurance you need.
Look for discounts
Each insurer is different, but many offers lower rates for the combined policy, similar to the discounts offered when combining homeowners and auto insurance. BOP is an insurance policy specifically designed for small businesses, and it will help you save money because it bundles general liability and commercial property insurance.
If you are unsure of discounts and offers, talk to our insurance representative, who will explain the various insurance discounts and offers available.
Don’t miss important coverage options
Even if you think your liability insurance is enough for your business, remember that it doesn’t cover everything you might experience. Coverage options such as business interruption may cost you a small amount now, but they will save you a lot of money in the long run if you ever need to make a claim.
Get help from insurance agents
Smart business owners know they must do their due diligence when seeking insurance coverage. They use the many insurance comparison tools and online resources available to help them find that one for themselves. However, it is ideal that you seek professional help to compare plans and coverage.
Review and update your coverage
Businesses are constantly changing, and so are insurance needs. You may want a particular coverage you didn’t need last year and vice versa. So, take the time to review and update your policy with your insurance agent to make sure you’re only spending exactly what you need.
How much is general liability insurance in GA?
Usually, a small business in Georgia should expect to pay $300 – $5,000 a year for general liability insurance.
What is general liability insurance for small businesses?
This policy protects you and your business against personal injury, property damage, defamation, defense of legal proceedings, and financial loss resulting from settlement bonds or judgments.
Why is business insurance expensive?
Commercial insurance protects your business from situations and offers higher limits than personal insurance. For example, a commercial vehicle policy protects assets if a damaged third party sues your business.
How many types of insurance are there for businesses?
The three important business coverages are general liability, commercial property, and commercial income insurance.
What is commercial umbrella insurance?
Umbrella Commercial Insurance provides additional liability protection by covering costs beyond other liability limits.
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