Small business insurance is an essential investment that protects your business from unforeseen risks. But have you ever wondered how much it actually costs? Well, you’ve come to the right place. In this article, we’ll uncover the secrets behind small business insurance costs and help you understand what factors influence the premiums. So, let’s dive right in!
Average Cost of Insurance for a Small Business
Before we delve into the specifics, let’s talk about the average cost of insurance for small businesses. On average, a business owners policy costs around $57 per month. However, the actual cost can vary significantly depending on the types of insurance you purchase.
How Is Small Business Insurance Cost Determined?
Several factors come into play when determining the cost of small business insurance. Insurance companies consider factors such as the value of your business property, business revenue, the number of employees, the age and size of your business, the type of business, the types of coverage, and your claims history. All these factors contribute to calculating the premium you’ll have to pay.
The Breakdown of Common Types of Insurance
Now, let’s break down the costs of some common types of insurance that a small business owner may consider.
General Liability Insurance Cost
General liability insurance, which covers lawsuits or claims if your business is responsible for someone’s injuries or damaging someone else’s property, costs around $42 a month. Factors such as building size, location, size of payroll and annual revenue, claims history, and policy details influence the premiums.
Product Liability Insurance Cost
Product liability insurance, typically included in a general liability insurance policy, costs an average of $42 per month. The number of lawsuits related to your products or services is the main factor in determining your premium.
Commercial Property Insurance Cost
Commercial property insurance, which financially protects your business from losses due to theft or damage to your business property, costs about $67 a month. Factors like location, building age and size, types of fire protection, equipment costs, and types of perils covered can influence the cost of this insurance.
Business Owners Policy Cost
A business owners policy (BOP) bundles general liability insurance, commercial property insurance, and business interruption insurance together. It costs an average of $57 per month. The factors impacting BOP pricing are similar to those affecting general liability and commercial property insurance.
Business Interruption Insurance Cost
If your business must temporarily close due to a covered loss, business interruption insurance pays to replace your income losses and pay operating expenses during that time. The cost of this insurance is influenced by your revenue, industry, and the value of your business’s property.
Inland Marine Insurance Cost
Inland marine insurance, covering your business property or products while in transit, costs around $29 a month. The primary factor affecting the cost is the equipment or product costs.
Cyber Liability Insurance Cost
Cyber liability insurance, protecting your business against cyberattacks, costs a median of $145 a month for small business owners. Industry, company revenue and costs, network security, the number of people with access to your systems and data, and claims history are all factors that impact the cost.
Workers’ Compensation Insurance Cost
Workers’ compensation insurance, which helps employees who get injured while working, costs an average of $45 a month for businesses with less than $300,000 in payroll costs. Factors such as payroll size, employee job duties, and location influence the costs.
Commercial Auto Insurance Cost
Commercial auto insurance costs businesses an average of $147 per month. Factors such as industry, fleet size, driving operations, driving records, and claims history determine the premiums.
Commercial Umbrella Insurance Cost
Commercial umbrella insurance, offering extra liability coverage, costs small businesses an average of $75 per month. The industry type and coverage amount impact the premium.
Errors & Omissions Insurance Cost
Errors & Omissions (E&O) insurance, also known as professional liability insurance, costs an average of $61 per month. The industry, coverage details, business size, business operations, and claims history all play a role in determining the cost.
Contractor’s Tools and Equipment Insurance Cost
Contractor’s tools and equipment insurance typically costs about $14 a month. Factors such as industry risk level, tools and equipment value, how often they are moved, coverage type and details, and the method of property valuation affect the insurance cost.
The Price Isn’t Everything: Choosing the Right Insurance
When it comes to small business insurance, it’s important to remember that “cheaper” doesn’t always mean “better.” While price is a factor, it should not be the sole determinant when purchasing insurance. Instead, focus on finding an insurance company that offers coverage tailored to your small business needs.
Consider additional perks and benefits offered by insurers, as well as their track record in terms of customer service. Ultimately, you want an insurance company that provides the coverage you need, outstanding customer service, and a solid reputation.
Now that you know the secrets behind small business insurance costs, you can make an informed decision and protect your business with the right coverage.
To learn more about business insurance and to find the perfect coverage for your small business, visit business.
Remember, the key is not just getting insurance, but getting the right insurance!
