Cost of Business Insurance (2025)

Business insurance offers companies much-needed property, equipment, and liability insurance, as well as protection against other risks like injured workers, business interruption, and terrorism.^[1]

The cost of business insurance will depend on the size of your business, the types of coverage needed, your industry, and the amount of coverage you choose.

Here’s what you should know about the cost of business insurance.

Average cost of business insurance

While the cost of business insurance can vary quite a bit, according to Progressive data, the median cost is about $85 per month for general liability insurance ($1,020 annually) and $118 for a business owners policy ($1,416 annually).^[3] The Hartford, another commercial insurer with published insurance rates, has slightly higher averages, at $141 per month ($1,687 annually) for a business owners policy.^[4]

Combined policies — including policies with a mix of liability insurance, workers’ compensation, and property protection — will cost more than basic policies with only a single type of coverage. Prices for your business will vary by insurance company and your business insurance needs, location, business size, and more.

Business insurance costs by policy type

Every type of coverage has its own rate structure, so the type of protection your business needs will be a major factor in what you pay. The coverage you choose, policy limits, deductibles, and state laws can also affect the costs of business insurance.

Here’s a look at some coverages you might choose as a business owner, as well as what they cost, according to data from Progressive Commercial and The Hartford.

Policy Type	Coverage	Average Monthly Premium	Average Annual Premium
Professional liability	Protects businesses that provide professional services or guidance against negligence, misrepresentation, and other mistakes that could lead to losses for another party	$62–$66	$744–$792
General liability	Protects you in case someone incurs an injury or has property damaged at your business or as a result of your services, employees, or operations	$68–$85	$810–$1,020
Business owners policy (BOP)	Typically for small businesses with fewer than 100 employees, this combined policy includes property insurance, liability protection, and business interruption insurance	$118–$141	$1,416–$1,687
Workers’ compensation	Pays for medical bills and lost wages if one of your employees incurs an injury on the job; your state may require this coverage	$86–$125	$1,032–$1,500
Commercial auto	Covers your business’s vehicle or fleet of vehicles; typically includes liability, collision, comprehensive, uninsured motorist, and PIP coverage	$282–$574	$3,384–$6,888
Cyber liability	Protects against cyber threats to business computer systems and data, business interruption, security failure, liability after cyber attacks, and more	$42–$417	$500–$5,000

Factors that affect your business insurance cost

Several factors influence the type of insurance you need and how much it costs. Here are some common factors that affect costs:

• 

  Industry and risk

  Some industries pose higher risks for insurance companies than others. For example, employees who perform more dangerous services, like logging, are more likely to experience injury than employees working in an office job. As a result, higher-risk companies pay much higher premiums for workers’ compensation.^[5]

• 

  Business size

  Your business’s number of employees, annual revenue, and payroll size can affect insurance costs. Larger businesses with more revenue and employees tend to have more risk and may need additional coverages, like an umbrella policy or crime insurance. This can result in higher premiums.

• 

  Location

  State laws can vary, particularly when it comes to workers’ compensation and liability insurance. Your location can also affect costs to cover legal fees and how at-risk your business is for property claims. For instance, if your area is prone to hurricanes, you may face higher premiums or need flood insurance.

• 

  Claims history

  A history of insurance claims may indicate you’re more likely to make a claim in the future, which will cost your insurance company money. Often, you’ll pay more for your insurance if you’ve made several claims against previous policies.

• 

  Coverage limits and deductibles

  Your policy’s coverage limits and deductibles affect your premiums, as they directly influence what your insurer pays should you file a claim. Higher limits and lower deductibles equal bigger premiums, while lower policy limits and higher deductibles lead to the opposite.

If you want to reduce your business insurance premiums, implementing a risk management or on-site safety program — and documenting that program thoroughly — may help.

How insurers calculate premiums

Insurers use various data sources to price policy premiums. Class codes, which indicate a business’s or professional’s risk level, play a role and can vary by type of insurance coverage.

Data regarding past insurance claims and losses also influences premiums. Certain modifiers, like your company’s experience rating, can also increase or decrease your premiums. The experience rating is a reflection of your past insurance losses.

Because of these factors and unique pricing calculations that each insurance company uses, it’s quite possible for two similar businesses to pay very different insurance rates, especially if they use different insurers. Shopping around for a policy is critical.

Ways to lower your business insurance costs

Business insurance can be expensive, but you can use the following strategies to try to reduce your premiums:

• Focus on safety. Create a safety plan and implement security devices that keep your property, employees, and clients safe from harm. This could reduce your premiums for workers’ comp and liability insurance.

• Take risk control seriously. Reducing your risk can also help. Examples include implementing a theft-prevention program, offering new human resources training, and hiring a risk manager.

• Increase your deductible. If you’re willing to pay more out of pocket per claim, you’ll typically see a lower premium. Just make sure you have the cash flow to handle that higher amount.

• Look for discounts. Many insurers offer discounts. Common discounts include savings for claims-free periods, installing certain safety devices, bundling policies, and paying annually.

• Shop around. Get quotes from at least three insurance companies. This ensures your costs reflect a number of algorithms and rating systems.

Where to compare business insurance quotes

Shopping around for a business insurance plan can help you find the best coverage at a price your business can afford.

Here are a few places your business can visit to comparison shop for insurance coverage:

• Online marketplaces: These online comparison marketplaces allow you to get several quotes at once. But depending on the site you use, you may receive lots of emails or phone calls from potential insurers.

• Direct-to-business insurers: You can also get quotes directly from several different insurance companies. This can be tedious and take lots of time and manual input.

• Independent brokers: Brokers act like personal shoppers and can get quotes from several insurers at once on your behalf. Brokers may work only with certain companies, though. If you opt for a broker, make sure to use an independent broker, rather than someone employed directly by any one insurance company.

Business insurance cost FAQs