How Much Is Commercial Insurance?

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  • How Much Is Commercial Insurance?

When you work for another company, insurance is typically one of the perks of the job. When you run your own business, you suddenly have to think about more than your own personal coverage, including how to protect your business and the people who work for you. 

Business insurance costs are different than your standard personal protection or auto coverage. If you need commercial insurance, you need to know what the average cost of general liability insurance for small businesses is before you start making calls and getting quotes.

How Much Does Business Insurance Cost?

For most small business owners, the average cost of business insurance, including general liability coverage, workers’ compensation, and property insurance, is about $140 per month. But the actual cost of your coverage will depend on a variety of different elements. 

To understand what your average business insurance cost is, there are three primary considerations insurance companies will take into account: 

  • The kind of business you operate
  • How big your business is, including the number of people who work for you
  • The overall size of your business, including the physical square footage of the space you typically operate out of

Different industries may require more expensive forms of commercial insurance coverage, including businesses in construction, landscaping, and food and beverage. Your policy limits will also play a key role in determining the final cost of your commercial coverage.

How Much is Commercial Insurance?

A business owner’s policy, which includes the cost of both commercial liability insurance and commercial property coverage, costs between $60 and $85 a month. If you also have employees, you’re required by law to provide workers’ compensation to protect them in the event of an injury or other major loss while on the job.

Of course, these are just the basic elements of any commercial insurance policy. The exact elements of coverage you’ll need to protect your business will depend on the specifics of your industry and the coverage limits you set.

The average cost of general liability insurance may be fairly low, but liability coverage may not be the full extent of your commercial insurance policy. 

In addition to the basics, professional liability and commercial property coverage, there are several other insurance policies you may want to take out to protect your business: 

You probably already have a personal auto insurance policy, but it’s important to recognize that your provider may deny claims against a vehicle being used for business purposes. If you (or your employees) will be behind the wheel while on the clock, you’ll want to take out a commercial auto policy, too.

How Much Does Commercial Auto Insurance Cost?

The average commercial auto insurance policy, with a policy maximum of $1 million, costs about $150 per month. However, the exact price can fluctuate based on the number of vehicles you’re insuring, their estimated value and the state in which you insure them.

Not unlike your personal auto coverage, there are several factors insurance companies will take into account to determine your specific commercial auto insurance cost:

  • The primary policy holder’s driving record
  • The number of employees covered under the auto policy
  • The age and general type of vehicles included in the policy
  • Exactly what the vehicle is being used for and how frequently it will be in use
  • Coverage options, deductibles, and policy limits

If your business operates more expensive vehicles (including trucks or vans), you can expect to pay a higher average commercial car insurance cost. 

How Much is Small Business Insurance?

Business insurance costs fluctuate based on the level of coverage you need and the policy limits you decide to set. While some coverages may be optional, you’ll typically need both liability and commercial property insurance, regardless of your size or industry.

If you pay employees, you’re also legally required to provide workers’ compensation coverage. Similarly, if you (or your paid employees) operate a vehicle for company purposes, you’ll need a commercial auto policy to protect your vehicle. 

While this may seem like an excessive level of coverage, the basic elements of commercial insurance for small businesses average roughly $140 a month. If your business operates in a high-risk industry, you may have higher average business insurance costs. 

Despite the costs, remember that business insurance is designed to protect you and the company you’ve worked hard to build. Shop around for the lowest costs, but never compromise on coverage.

Protect Your Business Assets

Your business is your greatest asset, and you need to protect all the things that help drive customers with commercial insurance.

The editorial content on Clovered’s website is meant to be informational material and should not be considered legal advice.

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