How Much Does Business Insurance Cost?

Annual sales, payroll and prior claims all factor into your insurance premium.
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Written by Kelsey Sheehy
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Edited by Ryan Lane
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Business insurance costs can vary widely. For example, shoppers who buy a business owner’s policy from Progressive pay $101 per month on average, while those purchasing from The Hartford pay $261.

Why such a big difference? Because multiple factors — like what policies you need, what coverage those policies contain and what your business does — affect how much you’ll pay for business insurance. In general, the more coverage you need, the more you’re likely to spend. The best way to estimate your company’s costs is to get several business insurance quotes.

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Average cost of small-business insurance

Here are the average costs of business insurance as reported by several different insurance companies.

Types of coverage

Average monthly cost from Progressive

Average monthly cost from Insureon

Average monthly cost from The Hartford

General liability insurance




Business owner's policy




Workers’ compensation insurance




Commercial auto insurance


$142 (median, not average).

No data.

Professional liability insurance



No data.

Not every insurance policy is the same, which can explain some of the variation in these averages. The Hartford, for instance, offers professional liability insurance and data breach insurance as add-ons to its business owner’s policy. Premiums are typically higher for policies with those add-ons than policies without them.

Not every company is the same, either. Insureon is an online business insurance marketplace that connects shoppers with quotes from several different insurers. Comparing those quotes may allow Insureon shoppers to choose cheaper coverage.

It’s best to get multiple business insurance quotes for any coverage you need. Some insurance companies offer quick, easy online quotes, while others require you to talk with a local agent or broker to get pricing details.

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Factors that affect the cost of your small-business insurance

With most types of business insurance, your rate comes down to a few key factors:


Some professions are inherently riskier than others, and higher risk equals higher premiums. That’s one reason why the cost of professional liability insurance will be higher for an architecture firm that works on public buildings than for an insurance agent who works with individual clients.

Workers’ compensation insurance gets even more specific, drilling down to the job function of each employee to determine the cost of coverage for a given business.


Insurance rates can vary based on where your business operates. This is especially true with workers’ compensation insurance since state laws can dictate everything from coverage levels to how you purchase a policy.

Location also plays a role in commercial auto insurance costs. Premiums are typically higher in cities and areas that have a higher-than-average claim rate.


The number of employees you have directly correlates to the cost of your business insurance. The reason? More employees equals more opportunity for injury, incident or accident.

Larger businesses can expect to pay more for business insurance than a company with few or no employees. And businesses with no employees may be exempt from state workers’ compensation mandates, saving them costly business insurance coverage.

Payroll and sales

The cost of workers’ compensation insurance is directly correlated to the size of your annual payroll. Depending on your state, workers’ comp may cost anywhere from 52 cents to $1.98 per month per $100 of payroll, according to a 2021 report from the National Academy of Social Insurance.

National Academy of Social Insurance. Workers' Compensation: Benefits, Coverage, and Costs.. Accessed Oct 18, 2022.

Insurers also use revenue to determine the cost of general liability insurance. The logic: The more customers you have, the better chance one will be injured or aggrieved in some way.

Prior claims

A history of business insurance claims is a red flag for insurance companies. It signals your business is either inherently risky or that your company is not taking proper steps to mitigate risk.

Coverage and deductibles

How much your policy will pay out, and under what circumstances, affects the overall cost of your business insurance.

A commercial auto insurance policy with comprehensive coverage, for example, will cost more than one with the minimum amount of liability coverage required by the state. Likewise, a general liability policy with an aggregate limit of $2 million will have a higher premium than one with a $1 million limit.

Opting for a low deductible will also increase the cost of your business insurance policy.

How to lower the cost of your business insurance

The best way to save money on your business insurance is to have very few claims made against your policy.

Insurance companies reward businesses that are diligent about worker and customer safety but will ding those with a history of accidents, workplace injuries or negligence lawsuits.

You can often earn discounts on your business insurance if you take the following steps:

  • Bundle your coverage. Most insurance providers offer discounts if you buy several policies at once.

  • Prepay your annual premium. Your insurer may offer a discount if you pay annually rather than monthly.

  • Adjust your deductibles. Typically a higher deductible equals a lower premium.

  • Invest in workplace safety. Minimize your risk profile by offering formal safety training and keeping up with routine facility maintenance.

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