This article is everything you need to know about small business insurance cost.
The backbone of the American economy is small businesses, which make up 90% of all businesses.
This is true for every country in the world.
But the many risks your small business may face sometimes make it hard for it to grow.
That’s why you need insurance for your business.
What is a Small Business Insurance Cost?
Small business insurance cost is just money set aside so you won’t lose a lot of money in the future.
Even though no one wants bad things to happen in the future.
Small business owners know they have to protect their growing businesses from bad things that could happen.
So, the term “small business insurance” refers to a payment plan that “insures” your business against a loss that was not planned for.
If you have a small business.
Insurance can help pay for financial losses caused by things like natural disasters, accidents, theft, and the collapse of the economy.
In modern times, you need business insurance so that any possible liabilities will be covered and your small business can stay in business.
How Much is Small Business Insurance?
Small business insurance cost totally depends on the policy plan you choose to opt in for as small business owners.
We have covered a lot of insurance policies that small businesses pay for in other to cover a specific risk or as additional insurance coverage.
Your business might have other insurance policies that cover risks that are unique to it.
But every business should get basic business insurance first before looking for more coverage.
Small Business Insurance Cost by Policy
Here are the Small Business Insurance costs by Policy in the United State of America
- General Liability Insurance
- Commercial Property Insurance
- Business Owner Policy (BOP)
- Professional Liability Insurance
- Errors and Omissions Insurance (E&O)
- Workers’ Compensation Insurance
- Cyber Liability Insurance
1. General Liability Insurance
General liability insurance covers the costs if you or your employees hurt or hurt someone else or cause damage to their property.
It also covers unplanned situations like lawsuits and claims.
It looks like this is the “mother” insurance that every business should buy.
General liability insurance costs about $46 per month on average.
The price range, though, can be anywhere from $22 to $165 per month.
This small business insurance cost depends on your industry, how long you’ve been in business, how much money you make, how many customers you have, and how many claims you’ve made in the past.
2. Commercial Property Insurance
The property and assets of your business will be protected by commercial property insurance.
It keeps it safe from things like damage, theft, broken equipment, and natural disasters.
However, commercial property insurance costs for small business is about $85 per month on average.
The insurance cost can be as low as $42 per month or as high as $417 per month, depending on where you live and what you own as a small business owner.
3. Business Owner Policy (BOP)
A BOP is a set of policies that combines the main types of insurance that most small businesses need for most situations.
Business Owner Policy usually includes both general liability insurance and insurance for commercial property.
A business owner’s policy costs about $100 per month on average.
The insurance cost range, however, can be anywhere from $42 to $292 per month, depending on your assets, where you live, and the risks you face.
4. Professional Liability Insurance
Professional liability insurance protects your business if a customer says that your product or service caused severe damage that cost a life or property.
This insurance policy will protect the business from lawsuits that fit the above description.
Most policies for professional liability insurance cost $60 a month, but prices can vary depending on your small business.
your insurance cost range from $40 to $85 per month, depending on the type of your small business, location, number of employees, and number of claims made in the past.
5. Errors and Omissions Insurance (E&O)
Common errors and omissions insurance costs between $75 and $167 per month and an average of $145 per month depending on your small business.
E&O insurance is similar to insurance for professionals.
But it protects your business from claims that you were careless or made mistakes while giving services or making goods.
6. Workers’ Compensation Insurance
Workers’ compensation insurance helps protect workers whose medical bills are paid for by the company and its managers.
Each worker usually pays $38 per month for workers’ compensation insurance.
Depending on where you are, what industry you are in, and how much each employee makes.
The premium rate per employee can be anywhere from $5 to $240 per month.
7. Cyber Liability Insurance
Cyber liability insurance policies, as the name, might suggest, protect certain businesses from the liabilities and financial losses that can come from system breaches and other cyber invading attacks.
About $92 per month is the average cost of insurance for small business property.
Insurance costs of this policy can be as low as $63 per month or as high as $667 per month, depending on your location, industry, database size, revenue, and assets.
Cost of Small Business Insurance By Type of Work
The most important thing that affects how much your small business insurance costs is what your business does.
Here are some examples of insurance policies for different types of small businesses, along with what they cover and how much they cost.
#1. Restaurant Insurance
- Restaurant Insurance cost range from $88 to $840 per month, or $1,050 to $10,000 per year.
- Restaurant Insurance Costs average $300 per month.
Policies for restaurants cover claims related to food-borne illness, customer injury, damage to third-party property, damage to personal property, and loss of business.
#2. Plumbing Insurance
- The plumbing Insurance cost range is between $39 and $89 per month, or $468 and $1,068 per year.
- Plumbing Insurance costs average $89 per month.
Plumbing insurance protects you from lawsuits and other types of liability if you hurt a client, a third party, or their property while installing, repairing, or doing any other service for them.
#3. Retail Insurance
- Retail Insurance cost range from $39 to $49 a month, or from $468 to $588 a year.
- Retail Insurance costs average $49 per month.
Retail insurance protects your business from being sued if your customers or other people get hurt or your store gets damaged.
#4. IT Consultant Insurance
- IT Consultant Insurance costs range from $39 to $289 per month or $468 to $3,468 per year.
- IT Consultant Insurance costs average $89 per month.
IT consultant insurance protects your business from injuries and property damage to third parties, as well as mistakes that could hurt a client and cost you money.
Best Insurance Companies for Small Businesses
Here are the best insurance companies for small businesses.
Hiscox is one of the best insurance companies for small businesses. They cover businesses in 49 states and Washington, D.C.
Their insurance policies are best made for their risks and needs as small businesses.
They offer many different kinds of insurance, most of which have already been talked about in this article.
If you click on this link, you can find out more about Hiscox.
Investopedia said that State Farm is the best insurance company for small businesses in general.
It makes sense since State Farm has a network of agents all over the country who offer a wide range of insurance plans.
This is the best company in the US for general liability insurance.
AM Best gave it an A++ rating, and it has coverage options for 14 different types of businesses.
This is one of the best workers’ compensation insurances and has had a good name in the insurance industry for a long time.
They offer a “pay as you go” workers’ compensation plan that makes sure you don’t pay too much or too little for your employees’ premiums.
Travelers meet the needs of businesses in more than 20 different industries and have an A++ rating from AM Best.
This small insurance company is clearly one of the best insurance companies for businesses.
They have the best services for both small and large businesses that need commercial property insurance.
Why Should a Small Business Have an Insurance
We don’t think it’s smart or safe to think that you can get rid of business risks just by being very careful.
After putting time, money, and effort into building a business and then seeing it fail.
It’s not worth the risk of not having business insurance.
At first, it may seem like insurance plans’ annoying costs are a waste of money.
But when a loss you can’t predict happens and the benefits start to pay off, you’ll be very glad you made the investment.
The best thing about a small business insurance cost is that it protects your business’s assets and property from lawsuits, physical damage, theft, employee accidents and illnesses, and other things that could cost you money.
Small business insurance is an important way to protect against these dangers.
If you don’t have it, your small business might fail before it starts to grow.
You would have cut the life of your business for no good reason.
So, giving competitors a chance to take over your share of the market.
Because of this, you should get insurance for your business entity.
Also, in some industries, coverage is required in order for your business to get a contract job.
Sometimes, you may work for clients who don’t need insurance.
But they will feel safer working with a company that is covered.
Your business team or employees will feel confident enough to take on bigger challenges without increasing their fear of risk.
Your team will be more concerned with making money, coming up with a business plan, and getting money for the business than with what could go wrong.
When you’re insured against losses, your customer service and delivery of goods or services will be at their best.
FAQs On Small Business Insurance Cost
The cost of small business insurance won’t protect your business from damage caused by carelessness or fraud during work or production.
If you lie about your business and its employees to get lower insurance rates.
You might not be able to get insurance coverage.
Our team thinks that Hiscox is the best insurance company for small businesses in the United States.
There is no exact number for this because the amount you pay depends on where the business is, how many employees it has, what industry it is in, how much money it makes, what kind of building or equipment it has, and how many times it has filed a claim.
Is Insurance for Small Businesses Worth It?
Insurance costs for small businesses are not cheap.
It’s a big expense on its own, which is why you should compare the prices of 3–4 small business insurance companies to find the best deal.
But you should know that the reward is always more than the cost of the premiums.
It might not matter right now, but it could save you in a tough spot.
Final Thought on how to go about with small business insurance costs.
Half of the time, small business owners don’t use their insurance for a decade or more or even longer.
Even so, that doesn’t mean that insurance for small businesses isn’t worth it.
If that wasn’t the case, smart businesspeople wouldn’t pay an insurance company each month.
Because it protects the business’s assets and property from lawsuits, physical damage, theft, employee accidents and illnesses, and other things that could cost the business money.
Small business insurance is an important way to protect against these dangers.
Without it, your small business could fail in a short amount of time because of unplanned events that you could have protected yourself from.
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