How Much Does Small Business Insurance Cost?

Cost Factors for General Liability Insurance

• Sales: The more customers your business has, the more risk you face for claims. This can increase your general liability insurance cost. But if you keep a safe area for your customers, it can prevent claims and keep your insurance costs down.
• Industry: More hazardous industries need risk management. This can lead to higher costs.
• Location: Being in a more populated area can increase your risk of customer injury. So, your insurance rate may increase.

Cost Factors for Workers’ Compensation Insurance

• Type of work: Certain types of industries put employees at a higher risk of injury or illness.
• Claims history: Even if your business has only a few workers’ comp claims, it’s likely that you operate a safe workplace. So, this can lower your workers’ comp cost.
• Payroll: Your cost is calculated per $100 of payroll. So, the larger your payroll, the higher your costs.

Cost Factors for Professional Liability Insurance

• Number of employees: In most cases, businesses with more employees pay higher premiums for professional liability coverage.
• Exposure to risk: If your business offers higher priced services or handles high value assets or sensitive information, you can expect to pay more for a professional liability policy. This is because of the greater potential for claims.

Cost Factors for Commercial Auto Insurance

• Where and how often you drive: The more time you or your employees spend on the road and the more hazards you have when traveling can increase your commercial auto insurance cost.
• Driver demographics: Drivers with less experience are most likely to have a commercial auto claim and can drive up premiums.
• Type of driving and vehicle: Whether businesses have high or low commercial auto insurance rates depends on the type, make and model of their vehicles. Typically, more expensive vehicles have higher premium rates.
• Driving record: As with personal auto insurance, driving records can impact the cost of your premiums. Your insurance company will look at the experience of the drivers covered under your commercial auto policy. The better your driving record, the lower your commercial auto premiums may be.
• Coverage required: The level of damage coverage impacts the cost of your commercial auto insurance. This means you’ll pay more for higher coverage limits than a basic policy.
• The nature of your work: The types of goods and services you provide can impact your insurance rate.

How To Lower Your Small Business Insurance Cost

No matter the size of your company, one of the best ways to lower your business liability insurance cost is to reduce risks. However, there are a few additional ways small business owners can save on the cost of small business insurance. This includes:

• Bundling insurance policies: You can save money on business insurance by bundling essential coverage into one policy. For instance, a Business Owner’s Policy (BOP) combines business income, commercial property and general liability insurance.
• Pay your entire premium up front: You could pay your premium monthly but paying for the entire total at once can get you a discount on your business insurance coverage.
• Manage your risks: The safer your business is, the less your insurance costs. Create a risk management plan to reduce the likelihood of accidents at your work location, jobsites and on the road.

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