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How much does Small Business insurance cost?

September 8, 2022

How much does Small Business insurance cost?

No matter the industry, small businesses need to protect their work and assets. While small business insurance can seem like a burden, it’s an important part of doing business. Your small business insurance costs will vary based on factors like your preferred type of coverage limits and industry classifications.

If you’re searching for small business insurance, it’s helpful to have some guidance in navigating the numerous online websites and also which broker is suited for handling small premiums (e.g., < $15,000 annually)

What Is Small Business Insurance?

Small business insurance can include multiple types of policies such as ( Errors & Omissions ( E & O), Workers Compensation, Cyber Security, Commercial Auto + Bonds These policies protect a business’s employees, assets, income, and intellectual property. Commercial Property insurance, Business Income insurance, and General Liability insurance are some examples that fall under the general categories of small business insurance.

Many insurance companies will offer combined coverages, which is important for generating economies of scale financially. One of the most common combined policy is what’s called a Business Owner’s Policy (BOP), which usually includes property and liability coverage.

Importance of Small Business Insurance

Accidents happen, so you need to legally and financially brace yourself for them. Without proper insurance you could end up in some serious hot water.

Maybe, an employee gets hurt on the job. Or maybe, a customer slips and falls in your store. In an employee case, you need to cover their injuries with Workers’ Compensation with a third-party occurrence – General Liability would be a risk transfer solution.

And risks aren’t limited to physical injuries. For instance, a business could take some photos from an internet search to use for their in-store signage. By using images without the expressed permission of the company who created the pictures, they could be hit with a copyright infringement lawsuit.

A number of other potential unfortunate scenarios including your business being robbed or your storefront damaged from a natural or human disaster will cover multiple situations like this. However not every mishap is covered as policies contain specific exclusions.

Average Cost for Small Business Insurance

The average cost for a basic small business insurance is about $400 to $800 per year or $34 to $67 per month — but as you increase limits, or purchase more coverage premiums will increase. Another thing to consider is the financial rating of the insurance company.

Small Business Insurance Costs by Type

Different types of insurance will offer multiple coverages, but they can also vary in price. Some insurance policies cover intellectual property or income, while others protect your physical assets or provide coverage for physical or personal injuries. Below are some representative categories of small business insurance:

  • General liability covers the business for, bodily injury, defamation, or libel (some examples)
  • Professional Liability, also called Errors and Omissions insurance, covers your business if your company makes a mistake or has oversights.
  • Business Owner’s Policy, which usually includes Property and Liability policies with optional add-ons.
  • Workers’ Compensation: If injured on the job, this policy will cover your employees’ medical costs, lost work wages for work-related injuries or illnesses based on state by state statues. Workers’ compensation premiums are based on classifying payroll by category (e.g., clerical, drivers, nurses, etc.).
  • Cyber Risk Insurance: Data breach insurance or Cyber Liability insurance will offer coverage for expenses relating to data breaches and cyber-attacks.
  • Commercial Auto Insurance: If your business has company cars for employees to drive, you have to have the vehicles insured. Commercial auto insurance costs will vary by location, cost of vehicle, driver’s license history and garaging location.

 Protect Your Business with Small Business Insurance

You’ve worked hard to grow your business, but even one small loss or a larger disaster loss could cost you thousands, derail your progress and push you toward bankruptcy. In severe situations, a major accident or lawsuit could even cost you your business.

Although business insurance is an added expense, it’s an important investment to protect your work, employees, customers, property, and income. No matter your industry, investing in small business insurance is in your best interest.

About CMR | PolicySmart®

PolicySmart’s risk management consultants provide independent group benefit, retirement and commercial insurance advice by reviewing your current portfolio of policies to improve coverage and reduce cost. By using our proprietary database – The CMR Database® (comprising some 13,000 brokers and specialists globally), we maximize access to the insurance and retirement industry providing greater options that will translate to better coverage and lower cost.

Please email croche@policysmart.com or call 888-873-1982 or 212-447-4300 for more information.  www.policysmart.com



About CMR | PolicySmart®

CMR & Associates’ risk management consultants provide independent group benefits, retirement and insurance advice by reviewing your current plans to improve coverage and reduce cost. Through CMR’s proprietary database – The CMR Database® (comprised of some 13,000 brokers and specialists globally), we maximize access to the insurance and retirement industry for greater options that will translate to better coverage and lower cost.