So you’re asking the big question. The one every business owner, from a one-person-show to a small shop with a few employees, wants to know. How much is business insurance, really?
It’s the question that usually gets that super annoying answer: “It depends.” Which is true, but not helpful at all when you’re trying to build a budget for 2025.
You just want a number. A ballpark figure. Something to write down so you can plan things out.
Let’s be real, nobody likes buying insurance. It’s not the fun part of running a company.
But it is the thing that stops a single bad day, a slip-and-fall or a client lawsuit, from ending your entire dream.
So we’re going to try and give you some actual numbers and ideas. We will break down what goes into the cost, so you can see where you might fit on the scale.
What Actually Goes Into Business Insurance Costs?
The price tag on business insurance isn’t just one number pulled out of thin air. It’s a mix of different things about your specific company.
An insurance company is basically placing a bet on how likely you are to file a claim. The riskier the bet, the more you pay. It’s kind of that simple.
Some factors are just way bigger than others, they move the needle a lot more.
The Big Ones: Industry and What You Do
This is probably the biggest piece of the puzzle. What your business actually does day-to-day changes your risk level more than anything else.
Think about it. A writer working from home has a very low chance of causing bodily harm.
Now think about a roofing contractor. They’re up on ladders, using tools, working with heavy materials. The chance of an accident is much higher.
That roofer’s general liability insurance will cost a lot more than the writer’s. It’s just the nature of the work.
How Many People You Got? (Payroll)
The more employees you have, normally the higher your insurance cost will be. This mostly affects your workers’ compensation insurance.
Workers’ comp is calculated as a percentage of your total payroll. So, a bigger team means a bigger payroll, which means a bigger premium.
It also means more chances for someone to get hurt on the job. Or more people who could make a mistake that leads to a lawsuit.
Where You’re At (Location)
Your business location plays a part too. Some states have more rules that can make insurance more expensive.
Local risks also get factored in. A business in a place with lots of hurricanes or tornadoes will probably pay more for property insurance.
Even the crime rate in your neighborhood can have a little effect on your final price. It’s all about perceived risk.
A Look at the Different Kinds of Business Insurance and Their Prices
Okay, let’s get into some numbers. Remember, these are just general averages for 2025. Your actual quotes could be lower or higher.
General Liability Insurance: This is the basic one. It covers things like a customer slipping in your store, or you accidentally damaging a client’s property. For a small, low-risk business, you might see prices from $30 to $60 per month. For riskier jobs, like construction, it could be $100 a month or much more.Professional Liability Insurance (E&O): This one is for businesses that give advice or provide services. It covers you if a client says you messed up their project and it cost them money. Think accountants, consultants, and designers. This normally runs from $50 to $150 per month.Workers’ Compensation: This is for your employees if they get sick or injured because of their job. The cost is all over the place because it is based on payroll, what your employees do, and state laws. A common way it’s figured out is $1 to $2.50 per $100 of employee payroll, but for dangerous jobs, it can be way, way higher.
Business Owner’s Policy (BOP): A BOP is considered to be a good deal for many small businesses. It is a package that bundles general liability and commercial property insurance together, usually for a lower price than buying them separately. A BOP can typically be found for anywhere between $50 and $200 per month, depending on your business property’s value and your industry.
Commercial Auto Insurance: If you use a vehicle for work purposes, you need this. A personal auto policy won’t cover work-related accidents. The cost for a single work van or truck might start around $125 to $200 per month.
How to Maybe Lower Your Business Insurance Bill
You aren’t totally stuck with the first price you’re quoted. There are some things you can do to try and get your premium down a bit.
It is possible that making a few smart moves could save you hundreds of dollars a year.
Bundle Up: Just like with your personal insurance, getting a Business Owner’s Policy (BOP) that combines a few coverages is often cheaper.
Create a Safety Plan: If you can show the insurance company you’re serious about safety with training programs and safety rules, they might see you as less of a risk.
Pick a Higher Deductible: If you agree to pay more out-of-pocket on a claim (a higher deductible), your monthly premium will usually go down.
Review Coverage Yearly: Your business changes. Don’t pay for coverage you don’t need anymore. Check your policy each year to make sure it still fits.
Get a Few Quotes: Don’t just go with the first offer. Talk to a few different insurance agents or use an online marketplace to compare prices.
So, Really, How Much is Business Insurance for a Small Business in 2025?
Let’s try to make this real with a few examples. These are just pretend scenarios to give you a clearer picture.
Scenario 1: The Freelance Graphic Designer
This person works from a home office. Their risk is very low. They might just need a BOP with general and professional liability.
Estimated Monthly Cost: $40 – $75
Scenario 2: The Small Coffee Shop
This shop has a physical location, two employees, and serves the public. They need a BOP, workers’ comp, and maybe some other specific coverages.
Estimated Monthly Cost: $150 – $350
Scenario 3: The Handyman Contractor
This person works on-site at people’s homes, uses a work truck, and does physical labor. Their risk is much higher.
Estimated Monthly Cost: $200 – $500+ (heavily dependent on the exact work)
As you can see, the range is huge. It all comes back to what you do, where you do it, and who you do it with.
Frequently Asked Questions
How much is business insurance for a new LLC?
For a new, low-risk LLC working from home, you might find a basic general liability policy for around $30-$50 a month. The price goes up quickly depending on your industry and if you have employees or a physical location.
How much is business insurance per month on average?
The median cost, meaning the middle-of-the-road price, for general liability insurance is about $40-$60 per month. But a true “average” is misleading because a high-risk construction company’s high premium can skew the numbers.
How much is business insurance for one employee?
Adding one employee mainly affects your workers’ compensation cost. Depending on the state and the job’s risk, adding one full-time employee could add anywhere from $50 to over $200 a month to your total insurance bill.
How can I find out exactly how much is business insurance for my company?
The only way to get a real number is to get a quote. You can talk to an independent insurance agent who can shop around for you, or you can use online insurance marketplaces to compare quotes from different companies yourself.
Key Takeaways
The price of business insurance is not one-size-fits-all. It really is different for every single company.
Your industry is the biggest factor. The riskier your work, the more you will pay.
Common policies like General Liability can be pretty affordable, sometimes under $50 a month.
Bundling policies into a BOP is often a good way for small businesses to save some money.
The best and only way to know your true cost is to get multiple quotes based on your specific business details.
