Business insurance protects you from lawsuits, property damage, and unexpected events that could otherwise bankrupt your business. But with so many types available, it's hard to know what you actually need. This guide breaks down the costs and helps you decide.
$500
Avg GL/year
$1,200
Avg Workers Comp
$750
Avg BOP/year
Types of Business Insurance
General Liability (GL)
Covers third-party bodily injury, property damage, and advertising injury claims.
$300-1,000/year for most small businesses
Professional Liability (E&O)
Covers claims of negligence, mistakes, or failure to deliver services.
$500-2,500/year for consultants, contractors
Workers' Compensation
Covers employee injuries and illnesses. Required in most states with employees.
$500-3,000/year per employee (varies by industry)
Commercial Property
Covers your business property: equipment, inventory, furniture, building.
$500-3,000/year depending on value
Business Owner's Policy (BOP)
Bundles GL + Property insurance at a discount. Great for most small businesses.
$500-1,500/year
Insurance Costs at a Glance
| Type | Low | Average | High |
|---|---|---|---|
| General Liability | $300 | $500 | $1,500 |
| Professional Liability | $500 | $1,200 | $5,000 |
| Workers' Comp (per employee) | $500 | $1,200 | $3,000 |
| Commercial Property | $500 | $1,000 | $5,000 |
| BOP (GL + Property) | $500 | $750 | $2,000 |
| Commercial Auto | $1,200 | $2,400 | $6,000 |
* Annual costs. Actual rates depend on industry, location, revenue, and coverage limits.
Insurance Cost by Business Type
| Business | Typical Coverage | Annual Cost |
|---|---|---|
| Cleaning Business | GL + Bonding | $400-800 |
| Lawn Care | GL + Equipment | $500-1,200 |
| Food Truck | GL + Auto + Property | $2,000-5,000 |
| Photography | GL + Equipment | $400-1,000 |
| Personal Training | GL + Professional | $300-600 |
| Handyman | GL + Tools | $600-1,500 |
| Restaurant | BOP + Workers Comp + Liquor | $5,000-15,000 |
What You Actually Need
For EVERY Business:
Add These If:
- Professional Liability: You provide advice, design, or consulting services
- Workers' Comp: You have any employees (required in most states)
- Commercial Property: You have expensive equipment or inventory
- Commercial Auto: You use vehicles for business
Pro tip: Ask your landlord or clients what coverage they require. Many commercial leases require $1 million in general liability.
Where to Buy Business Insurance
Online (Fast)
- Next Insurance — Great for small business, instant quotes
- Thimble — Flexible short-term policies
- Hiscox — Good for professionals/consultants
- Simply Business — Compare multiple carriers
Traditional (Full Service)
- Local agents — Personalized advice, multiple carriers
- State Farm — BOP and commercial auto
- Nationwide — Good for growing businesses
- The Hartford — Specializes in small business
Include insurance in your total startup budget
Calculate Startup Costs