Insurers tailor business policies to each company’s level of risk. That means business insurance costs depend on factors like your industry, business size and how much coverage you need.
NerdWallet recommends all businesses have at least general liability insurance. Those premiums range from $700 to $3,000 per year (roughly $58 to $250 per month) for businesses with $1 million or less in annual revenue, according to data online brokerage Coverdash provided to NerdWallet in 2025.
Additional coverage will increase how much you pay for small-business insurance. Get several quotes to compare prices and options and find the best fit for you.
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Example business insurance costs
Coverdash says premiums for policies it sells generally fall into the following ranges for businesses with with $1 million or less in annual revenue:
- General liability and business owner’s policies: $700-$3,000 per year.
- Professional liability: $1,200-$2,200 per year.
- Cyber liability: $1,200-$3,000 per year.
- Directors and officers insurance: $1,200-$7,000 per year.
- Workers' compensation: $1,000-$10,000 per year.
What affects the cost of business insurance?
Your business insurance premium will depend on many factors. But the biggest red flag might be if your business has filed claims before. It signals your business is either inherently risky or that your company is not taking proper steps to mitigate risk.
Here are other items that can affect your costs:
Why these factors matter
Industry
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. Industries where employees do physical labor, like construction, are generally most expensive.
Coverage
Certain types of coverage don’t necessarily cost more than others.
A general liability policy for a business with lots of foot traffic — and therefore lots of risk of customer accidents or injury — could cost more than a workers’ comp policy for an office-based business where the chance of physical injury is low.
What does affect the cost of coverage is how much your policy will pay out and under what circumstances. 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.
Opting for a high deductible will also usually decrease the cost of your business insurance policy. But this can backfire — if you have to file a claim, you’ll owe more up front before your coverage kicks in.
Location
Insurance rates vary based on where your business operates. If your business owns or rents a large or valuable property, your property insurance costs will likely be higher. Auto insurance premiums are typically higher in cities and areas that have a higher-than-average claim rate. And state laws affect which employees you’re required to insure with workers compensation.
Business size
The cost of workers’ compensation insurance directly correlates to the size of your annual payroll. Depending on your state, workers’ comp may cost anywhere from 57 cents to $1.62 per month per $100 of payroll, according to a 2024 report from the National Academy of Social Insurance .
Insurers also use revenue to determine the cost of general liability insurance. The more customers you have, the better chance one will be injured or aggrieved in some way.
Save up to 30% on business insurance
NerdWallet Small Business helps you get real-time quotes from 30+ insurers, and instant access to your Certificate of Insurance (COI) through our partner, Coverdash.
How to control the cost of your business insurance
The best way to save money on business insurance is to have very few claims made against your policy. Insurance companies reward companies that are diligent about worker and customer safety. They ding businesses with a history of accidents, workplace injuries or negligence lawsuits.
Beyond that, you may be able to find discounts on your business insurance if you take the following steps:
- Bundle 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. (This can backfire, though. If you have to file a claim, you’ll pay more before your coverage kicks in.)
- Invest in workplace safety. Minimize your risk profile by offering formal safety training and keeping up with routine facility maintenance.
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- 1. National Academy of Social Insurance. Workers' Compensation: Benefits, Cost and Coverage. Accessed Feb 20, 2026.
