No matter your industry or what your company sells, business insurance protects you from unexpected expenses. Both new and established businesses can minimize financial risk with the right insurance plan.

But with so many types of insurance to consider, comparing costs can be challenging. In this article, we'll break down business insurance costs so you can choose the right policy type at the best price.

Average Small Business Insurance Costs

The amount you pay for small business insurance depends on the type of coverage you purchase. You may need more than one type of insurance, depending on your industry and your business location.

Here are the average costs for 10 of the most common types of small business insurance.

Types of Business Insurance and Factors That Affect the Cost

Let's take a closer look at business insurance types and break down the factors that affect how much they cost. Note that coverage limits affect the cost of every type of policy. The more business insurance coverage you need, the more you can expect to pay for a premium.

General Liability Insurance Cost

General liability covers claims related to property damage and bodily injury. The main factors that affect the cost include:

• Industry: Businesses in high-risk industries generally have higher premiums.

• Location: Businesses in highly populated zones or areas at risk of natural disasters may pay more.

• Years in Business: Newer businesses often pay more per month for general liability insurance.

• Claims History: Businesses with numerous past claims present more risk and may pay more.

Commercial Property Insurance Cost

Also called hazard insurance, this type of policy covers damages to your business property. The biggest factors in the cost of commercial property insurance include:

• Industry: Businesses with high property values (e.g., real estate) typically pay more.

• Location: Businesses in areas at high risk for vandalism or crime often pay more.

• Number of Employees: Larger businesses generally have higher premiums.

• Occupancy: Businesses that have more people on the premises also pay more.

Business Owner's Policy Cost

A business owner's policy combines multiple types of coverage—general liability and commercial property—in a single policy. It's a popular type of insurance for a small business and protects against significant risks.

The factors that affect the cost of a business owner's policy are the same as those that impact general liability and commercial property policies. Industry, location, business size, and claims history are key factors.

Commercial Auto Insurance Cost

Commercial auto insurance covers accident-related expenses for company-owned vehicles. Most policies include a certain amount of bodily injury liability per person and per accident as well as property damage liability.

The cost of a commercial auto insurance policy depends on factors like:

• Location: Each state has its own minimum requirements for coverage.

• Vehicle Make, Model, and Value: The higher the value of your vehicle, the higher the cost of the premium.

• Number of Vehicles: The premium increases with each vehicle you add to the policy.

• Driving Records: Employees with extensive accident history may drive up the cost of the premium.

Product Liability Insurance Cost

Most insurance companies include product liability insurance in general liability insurance policies. As a result, the factors are similar—including your industry, location, claims history, and years in business.

However, the cost of your premium also reflects the value of your property and the kind of products you sell. Many insurers also consider your annual revenue.

Cyber Liability Insurance Cost

Cyber insurance covers expenses related to cybercrime and data breaches. It helps minimize risk if cybercrime interrupts your business temporarily.

The strength of your business's security measures and the amount of data you own are two of the most important factors that affect the cost of cyber insurance. Industry and revenue also affect the cost.

Business Interruption Insurance Cost

Business interruption insurance covers part or all of the expenses your company incurs if it has to close temporarily. It typically covers wages, rent payments, loan payments, tax payments, and revenue loss.

This type of insurance applies when issues like natural disasters or theft arise. It's most helpful for businesses with physical locations like stores and offices.

The cost of a business interruption policy depends on factors like your property value, your payroll, and your annual revenue. Your location and industry may also play a part.

Errors and Omissions Insurance Cost

Also called professional liability insurance, errors and omissions insurance protects businesses from lawsuits that occur when clients claim you've made a mistake or left something out in your professional services. 

Revenue, industry, and business size are key factors for the cost of this type of insurance. Your legal contracts and employee training policies can also affect the cost of this type of policy.

Workers' Compensation Insurance Cost

As a small business owner, you generally need workers' comp insurance if you have employees. It covers expenses related to injuries or illnesses contracted at work.

Profession is one of the most important factors for this type of insurance. Hair stylists and real estate agents tend to have low workers' comp premiums, while carpenters and general contractors typically pay much more.

Commercial Umbrella Insurance

Commercial umbrella insurance adds extra coverage to an existing general liability insurance policy. This type of policy takes effect when damage exceeds the limits of your policy, and your business needs more financial protection.

In addition to coverage limits, the cost of commercial umbrella insurance largely depends on your industry. Business types with higher risks have a higher premium.

How to Save on Business Insurance

Purchasing the right type of insurance can save you a lot of money in the long run. But in the short term, monthly and annual insurance premiums may seem expensive.

One of the easiest ways to save money on business insurance is to choose a policy with a higher deductible. While the premium costs less, you have to pay more out of pocket if you file an insurance claim.

Another option is bundling multiple policies together. Rather than purchasing general liability coverage and commercial property insurance separately, consider purchasing a business owner's policy.

It's also a good idea to pay for as much of your business insurance policy as you can in advance. "You could save money—maybe even 5%—on your policies if you pay for six months or a year of coverage upfront instead of paying in installments," advises Gabriela Dominguez, CPCU.

However, use this approach carefully. "If you do choose to pay in installments, make your payments on time," Dominguez explains. "Coverage lapses due to nonpayment mean higher rates when you're reinstated."

Keep in mind that in some cases, purchasing certain types of insurance doesn't make financial sense. To make a decision, consider the cost of the insurance premium and the potential risk for your business.

Next Steps to Get Business Insurance

To protect your business from unexpected costs, you need the right insurance coverage. Compare quotes or consult with an insurance agent to get the coverage you need at a cost that fits your budget.

About Anna Sonnenberg: SaaS Expert

Anna Sonnenberg is a seasoned B2B SaaS writer and small business owner. Specializing in martech, sales automation, and productivity software, Anna turns complex topics into clear, actionable insights. As a fellow entrepreneur, she's dedicated to helping you harness the right tools to grow your business.

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