What is the average cost of small business insurance? Well, that's a loaded question because every business is different, and so what they pay for business insurance is determined by the uniqueness of their particular business operation. Without making it too complicated, below we explain the average cost of small business insurance in layman’s terms.
Many lower risk businesses can often be covered for business liability insurance for as low as approximately $250 per year to $450 per year. If that same business wants to add business property insurance, then they can often package the insurance into a business owners policy or BOP which can cost as low as $500 per year and up to a few thousand dollars per year depending on the value of property insured and other characteristics of the business.
Easy to insure businesses like an IT consultant have a low risk of loss. The insurance carriers view these businesses as having a small chance of filing an insurance claim against them. Thus, the open market is competitive and drives down the cost of business insurance to competitive premiums that slightly differ from company to company.
Once a business adds employees its costs can start to go up. Most states require a business to carry workers compensation insurance if they have any employees at all. Workers compensation can cost as low as a couple hundred dollar per year to tens or even hundreds of thousands of dollar per year for larger operations. If the business owns vehicles then it will need to pay for commercial auto insurance which may cost around $800 per vehicle on average. And if a small business provides professional advice and services then it may need professional liability insurance which can cost as low as $400 per year but on average around $1500 per year.
Just like we mention above, if a business needs both liability and property insurance, they can often combine the two insurances into one policy called a business owners policy, or BOP for short. Insurance carriers are often willing to offer BOP insurance to most small to medium enterprises. Combining both liability and property insurance into one policy is a nice way to take advantage of a business insurance discount.
There are many other ways to get discounts on your business insurance and they all depend on your particular type of business operation. Getting multiple business liability insurance quotes will help you to find the best possible business liability insurance coverage and pricing for your small business.
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