How much is insurance for a small business? Get information that can help you estimate just what it will cost for your company to buy commercial insurance.
How Much Is Insurance For A Small Business?
If you have a small business, or you are thinking about starting one, then you may be wondering what it will cost to have insurance for that business. The answer to that question is difficult, because it depends upon what kind of business you have and what kind of insurance that you need.
However, we will cover some of the most common types of commercial insurance here, and give you some information that will help you estimate just what it will cost for your company to have insurance.
General Liability Insurance
Commercial liability insurance is a type of insurance that protects you against claims such as third party bodily injury or property damage. For example, if you owned a store and someone slipped and fell on a wet floor, they may be able to sue you for damages. This is especially true if the accident was caused by your company, or your company did not take the proper steps to prevent the accident. So, if an employee had been mopping the floor and forgot to put up the wet floor sign, then someone who slipped on the wet floor might be able to claim that your company was negligent and sue you if they were injured.
But liability insurance doesn't just protect your company against accidents and injuries. It can also protect you in this digital age, because if you have a data breach or some other digital mishap, cyber liability insurance will protect you against the consequences of that breach.
The Cost of General Liability Insurance
Because you might be required to pay a great deal of money if someone gets injured on your property, or you have a data breach that releases sensitive information into the hands of potential thieves, general liability insurance costs a fair amount. However, when it comes to a commercial insurance, liability insurance can be one of the lowest-priced types of business insurance out there.
General liability insurance for a small business such as a sole proprietorship is between $500 and $600 a year per year. However, this will depend upon the type of coverage that you get. For example, a general liability insurance policy that covers up to $250,000 may run you around $500 per year, but if you were to increase that limit to $1 million per year, then your rate could easily jump up to between $1300 and $1,500 per year. But it all depends on your sales or payroll and what type of work you do.
The Factors Affecting Commercial Insurance Pricing
There are several factors that may influence what the price of your commercial insurance comes out too. Here are just a few of those:
- The type of policy that you choose. General liability insurance is going to cost less than an umbrella policy.
- The deductible that you want to pay. The lower your deductible is, the higher your policy is going to run.
- The industry that you're in. Some industries are going to require higher risk and that means paying higher premiums.
- The size of your business is also a factor when it comes to General liability and property insurance.
- Where you are located also plays a part. For example, if you were located in a major city then you are probably going to pay more than a business that is located in a small town.
- The number of employees that you have is also a factor when talking about workers compensation, but also general liability insurance.
- Finally, the amount of revenue your company has will adjust the price of your premium because the more you have at risk the more insurance will have to cover.
Other Types of Commercial Insurance
You should also be aware that there are a great many more types of commercial insurance then just the ones that most people think of. General liability insurance is the most common type, but if you have employees in you're going to need workers compensation insurance and you are likely going to have to have property insurance as well.
Some of the other types of insurance may include commercial auto, insurance in the case of a data breach and directors & officers insurance. All these policies vary depending upon the factors mentioned, and you should discuss with your agent what the best options are for your company.
How Much Is Insurance For A Small Business? - The Bottom Line
We hope this article on How much is insurance for a small business? has been informative. Speak to a licensed business insurance broker to help you get quotes for the coverage you need.