How Much Is Business Insurance?
The price of your business insurance premium can depend on a number of factors, such as the size of your business, which policies you include in your cover and how risky your business activity is. Read on to find out more about how much business insurance can cost.
When working out your business expenditure, you’ll need to include everything from one-off purchases of equipment to monthly costs, such as rent or insurance.
But how much does business insurance cost? Below, we consider the factors that can change the price of your business insurance package.
How much does business insurance cost?
Business insurance isn’t a one-size-fits-all package. You can choose to add different options to your plan and select the level of cover that best suits your business.
This means that the cost of your insurance premium can also fluctuate, depending on what your business insurance package covers.
It’s difficult to put an exact figure on how much business insurance costs since it’s tailored to each business and its specific needs. However, it can range from a few pounds to hundreds of pounds a month, depending on the scale and nature of your business and the cover options you choose.
» MORE: Do I need business insurance?
Below, we take a look at some of the factors that can affect the price of your premium.
What can affect the price of business insurance?
Generally, the following factors can affect the cost of your business insurance package:
- the size of your business
- the location of your business
- the number of coverage types in your insurance package
- the level of cover you want
- how risky your industry is
- your chosen excess (the amount you’re willing to pay upfront in the event of a claim)
- whether you’ve made a claim in the past
This isn’t an exhaustive list – prices can differ between insurers for many reasons. It’s worthwhile comparing policies from a range of providers to help you get the best deal for your individual circumstances. You could also use a business insurance broker.
Changing the number and types of cover options in your insurance plan or adjusting the level of cover will likely affect the price of your business insurance.
However, it’s important not to scrimp on cover just to get a cheaper premium. You should make sure that any quotes offered include everything that you want covered. Having a lower level of cover than you need could lead to you being underinsured, and your insurer may not pay out as much as you expect in the event of a claim.
You may be able to find examples of how much premiums can cost on a provider’s website, though it’s important to remember that these may only be representative for a small percentage of customers and you could end up paying more than this.
To find an accurate figure for your business, you can get quotes from different providers and compare to find a deal that suits your needs.
» COMPARE: Business insurance
What does business insurance include?
Business insurance can be made up of a range of different policies. People often take out policies which include:
- Public liability insurance: This covers compensation and legal costs if a member of the public was injured or, worse still, died, or their property was lost or damaged because of your work.
- Product liability insurance: This option protects you in the event that you manufactured or sold a product that injured a customer or made them ill.
- Employers’ liability insurance: If you have any employees, this will offer cover for injuries or illness sustained by them while completing work for your business.
- Professional indemnity insurance: This covers claims made against you by clients who feel they have suffered financial loss because of your advice or services.
There are other business insurance options to consider including:
There are other business insurance options to consider including cover to protect your tools or stock; cyber insurance to protect your IT equipment and digital records; business interruption insurance, as well as business buildings and contents insurance, for cover against unforeseen disasters, such as a flood or fire.
The only legal requirement when it comes to business insurance is employers’ liability insurance. If you employ anyone working in the UK who’s not part of your immediate family, you have to take out employers’ liability insurance – or you could face a fine of £2,500 for each day you don’t have the correct cover. However, while this may be the only legal requirement, it is also worth considering protecting your business with other types of business insurance cover.
Image source: Getty Images
Kristina is a writer at NerdWallet. A recent graduate trading French for finance, she has experience creating content for student newspaper Cherwell and an edtech company. Read more