How much is workman comp insurance for a small business

Starting your own business can be exciting and rewarding, but it can also expose you to numerous risks. This is where business insurance comes into play. While there’s no coverage that makes entrepreneurship completely risk-free, business insurance can help you prepare for potential mishaps, including lawsuits, employee injuries, and car accidents.

how much does business insurance cost?

Small business insurance can cost $600 to $1,200 total per month or more, depending on the size of your business, the number of employees, and your insurance needs. Your business likely needs a few different types of business insurance, and knowing the average costs of small business insurance can help you find the best policies at the best price for your specific business requirements. Here are some of the most common types of business insurance you might need, plus what they cost on average.

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(Estimates are compiled from 2022 data from insurance companies, including progressive, hartford, and insureon).

general liability insurance: $65-$88/month

general liability insurance covers claims related to bodily injury, property damage, and reputational damage (including libel, defamation, or copyright infringement claims against your business). think of it as the business version of home insurance. Although general liability insurance is not usually required by law, it is often required to obtain specific licenses and contracts.

Average general liability insurance costs range from $65 to $88 per month.

professional liability insurance: $56-$117/month

If your business provides professional services or advice, professional liability insurance, also called errors and omissions (E&O) insurance, protects you against job performance claims, including errors, omissions and negligence. for example, a real estate agent who does not notice mold in a basement may be liable for damages. Average professional liability insurance costs range from $56 to $117 per month. Different states have different requirements regarding which industries and professions need professional liability insurance; For example, some states require real estate agents to carry E&O insurance while others do not, so check with an insurance broker in your area to see what you need. .

workers compensation insurance: $70-$111/employee/month

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Workers’ compensation insurance provides benefits and lost wages if one of your employees suffers a workplace injury. Most states (including California, Illinois, and New York) require small business owners to obtain workers’ compensation insurance coverage when they hire their first employee.

Because most workers’ compensation insurance costs are based on payroll, your premium increases as you hire more employees. Average workers’ compensation insurance costs range from $70 to $111 per employee per month.

Business auto insurance: $135-$188/month

Commercial auto insurance covers accidents involving your company’s vehicles. Required (in all states except New Hampshire and Virginia) if your business owns cars, such as a food truck, construction vehicle, or delivery van.

Average commercial auto insurance costs range from $135 to $188 per month.

business owner policy: $99-$261/month

A business owner’s policy combines the protection of general liability insurance and commercial property insurance in one plan. however, details vary depending on your needs and your provider’s offerings. In addition to the protections of a general liability insurance policy, a business owner’s policy offers coverage for accidents, emergencies, theft, and vandalism on your property.

The average business owner’s policy ranges from $99 to $261.

what determines commercial insurance costs?

  • company size and number of employees
  • claim history
  • location
  • industry

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Commercial insurance costs described above are averages. you can pay premiums above or below that range. There are a variety of factors that affect what you pay for your business insurance. These are some of the most important variables:

company size and number of employees

As you scale your business, the more you grow, the more you can expect to pay for business insurance coverages. Every sale you make, employee you hire, and asset you acquire (including vehicles and property) is another opportunity for something to go wrong; your insurance costs will reflect this.

claims history

If an insurance company sees that your business has filed many claims in the past, they may view you as a high-risk customer and increase your monthly rate. To avoid putting your business in this position, implement and follow safety precautions to reduce the risk of accidents.


The location of your business also affects how much you pay for business insurance coverage. Some states may require you to purchase certain types of insurance that are optional elsewhere. For example, legal practices in Oregon are required to carry professional liability insurance. You may also see higher business insurance costs in higher-risk areas (such as cities for commercial auto insurance) or places where normal business operations are more expensive overall.


Different types of businesses face different types of risk. An ophthalmologist’s private practice may need professional liability insurance to protect against negligence claims, while a florist may need commercial auto insurance to cover accidents involving their delivery truck. Businesses in industries with higher risk of injury (including electrical contracting, logging, and fishing) are also likely to pay more in workers’ compensation insurance.

things to consider when choosing business insurance

Once you know the different types of insurance and their average costs, it’s time to start shopping. here are some steps worth taking before signing up for a plan:

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  • know your needs. different businesses and industries have different levels and types of risks that are inherent to the industry as a whole and are based on the location in which the business operates . Evaluate the particular risks of your small business and what type of coverage will protect it; an insurance broker can guide you here. Make sure you also know your state or local business insurance requirements.
  • Get multiple quotes. Get quotes from multiple providers to choose the best price and coverage for your business. As with any major purchase, don’t settle for the first offer you get.
  • bundle. some providers offer plans that bundle multiple types of insurance, such as homeowners policy of a business, which combines general liability insurance with commercial property insurance. this can be a great way to save money on your monthly premium.
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