How Much Does Small Business Insurance Cost?

Making an investment in small business insurance is a key way to safeguard your company and employees from potential risks, damages and threats. Investing in insurance can be worth the expense, but many small business owners wonder how much commercial insurance might cost, and if they can afford it – especially if it’s their first time looking into the matter.  
Here’s an overview of what you should anticipate and budget for when choosing small business insurance.

What factors influences how much small business insurance costs?

A logical question when looking into small business insurance is wondering how much will it cost? The answer to this question varies greatly depending on the size of your company, the industry you’re in, and your long-term plans.
However, there are a certain number of business characteristics that influence certain small business insurance costs, including:

Business Size

The number of employees and your yearly revenue play a role in how much your small business insurance will cost. For example, sole proprietors who work from a home office could pay under $1,000 for a basic level of liability insurance. On the other hand, small consulting firms could pay anywhere from $3,000 to $15,000 annually depending on the level of risk involved in the work.


In industries where your employees are performing physical labor, employees may be exposed to increased risk, or more opportunities for experiencing harm. This is especially true for construction, engineering and mechanical jobs that involve machinery and heavy lifting. Based on your industry, your business will have a classification that will impact the cost of your premium.
Individual employee classification can also impact premium costs. Jobs that might expose employees to chemicals or potentially harmful environmental hazards will likely have a higher workers compensation insurance premium. 


Not all businesses will need the same coverage. If your small business is in retail or sales, product liability insurance is essential. This insurance is designed to cover production faults or flaws that might cause damage to a customer or their livelihood. If someone does encounter a bad experience from your product, this type of insurance can protect your business from legal action. If your goods are being shipped or transported from location to another, inland marine insurance is designed to protect your business. An experienced agent can help you understand the types of small business insurance that may be right for your business.


Your physical location can impact your premium. You will likely pay a higher premium in a busy metropolitan than in the rural countryside. 

Size & Condition

The size of your physical business space can impact premiums, too. If you’re a company that operates in a small office with minimal supplies, you’ll likely have a lower premium that a large site with expensive equipment, such as computer hardware, machinery or vehicles. Furthermore, the condition of your space will impact the premium, too. Often newer buildings have updated safety features and are in better shape than older spaces, resulting in lower premiums.

Revenue & Number of Employees

As a general rule, the more employees you have and the more revenue you make (with more assets to protect), the higher the premium.

Small business insurance cost - how limits & deductibles impact payments

Policies with higher limits – the maximum value the carrier would pay on a claim –  will generally have a higher premium. A higher deductible – the amount you pay out of pocket before the insurance kicks in –  will often decrease your monthly premium.

Other considerations

Additional factors, such as claims history and payroll size, can impact specific coverages like workers’ compensation. Commercial auto insurance can be impacted by the driving records of your employees. Professional liability insurance premiums will generally be higher for businesses with a higher severity potential.

How to improve small business insurance rates

The cost of small business insurance varies greatly depending on many factors. An AmTrust Financial agent can help you determine the right coverages for your business, and work to get you lower premiums. Bundling coverage with a business owner’s policy (BOP) will often be less expensive than purchasing coverages individually. Minimizing risks through loss control services can also help lower premium.

This material is for informational purposes only, summarizes coverages and services that may be available in a policy, and is not legal or business advice.  Neither AmTrust Financial Services, Inc. nor any of its subsidiaries or affiliates represents or warrants that the information contained herein is appropriate or suitable for any specific business or legal purpose.  Readers seeking resolution of specific questions should consult their business and/or legal advisors.

Individual coverage may vary and may not be available in all states.  In the event of a conflict with the material herein, the terms and conditions of any issued policy will control.  Claim examples are general, may or may not be based on actual claims, and are for illustrative purposes only.  Any available coverage for a claim will be determined based on the facts and circumstances of the claim as well as the terms and conditions of the policy, including any applicable exclusions or deductibles.


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