Chelsey Tucker graduated with a Bachelor of History degree from Metropolitan State University in 2019. She now writes about insurance with her specialty being life insurance and has been quoted on Help Smart Phone and MEL Magazine.

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Dan Walker graduated with a BS in Administrative Management in 2005 and has been working in his family’s insurance agency, FCI Agency, for 15 years. He is licensed as an agent to write property and casualty insurance, including home, auto, umbrella, and dwelling fire insurance. He’s also been featured on sites like

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Reviewed by Daniel Walker
Licensed Auto Insurance Agent

UPDATED: Mar 19, 2020

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It is essential for every business person to determine the average business insurance. This ensures that the business owner takes into consideration the total amount of expenses for the business. Additionally, having business insurance cannot be overlooked, because this protects the business owner and the business as a whole from unforeseen risks and claims that can have a negative impact.

One can utilize the internet to search and compare different quotes from various sources. A great way to compare different quotes is by entering your ZIP code into our FREE insurance comparison tool!

Average Costs of Business Insurance

Sole proprietors, partnership and corporation businesses, are required by law to obtain business insurance before or during the course of operation. Admittedly, insurance companies each have their own charges for business insurance cover.

But it is also noteworthy that rates do not vary greatly within the business insurance industry because of the stiff competition. By comparing just a few quotes, a business owner, is able to determine the best average rates to pay for his or her business insurance costs on a yearly basis. With an open mind, a business owner can obtain an ideal deal online.

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In determining the average cost of business insurance, it is important to remember that there is ‘no one-fits-all-cover.’ The cover beneficial to one business owner may not be appropriate for another. Businesses’ needs are different and so will the insurance quotes be when a business person requests for them.

The average cost that a business owner may pay for insurance depends on various factors. It is important that one requests the insurance company or an online firm for quotations, and makes their choice depending on the business’s budget; it is not advisable to purchase very expensive business insurance when the business’s budget cannot support it.

Other factors include the type of business one is in, such as the services and products offered by the business, the legal structure of the business, location of business, yearly revenue, number of employees, and the claims previously faced by the business.

Undeniably, businesses with a simpler legal structure, such as the sole proprietorship will incur lower average business insurance costs.

In sole proprietorship, the sole business owner is the only person who needs insurance against liability. In larger corporations other professionals will need insurance as well. Also small businesses with fewer inventory, equipment, services and employees will require fewer types of business insurance covers. This in turn, lowers the cost of business insurance required by the business.

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Types of Cover

Depending on the type of business one is starting there are different kinds of business insurance coverage you may have to get. Some typical business insurance covers include but not limited to:

  • Accidental damage cover
  • Accounts receivable cover
  • Cover for buildings
  • Cover for business equipment and inventory
  • Business interruption cover
  • Fire damage cover
  • Fixed glass cover
  • Cover for money kept on the premises
  • Portable business possessions cover
  • Public liability cover
  • Theft cover

Professional Liability Insurance

Professional or malpractice liability cover, is one of the most essential covers a business person may have to purchase. It is also known as, errors and omissions insurance, and the average cost may vary between $500 to $2500 for a sole proprietor business. The cost may escalate beyond $2500 annually for businesses which have more than one professional working there.

Average Business Insurance

This type of insurance is especially applicable for professionals, such as physicians, lawyers, therapist who are in their own private practice. It is also noteworthy that if you are in a business with very little presumed risk the professional liability insurance premiums will be lower.

This is in comparison to businesses with much more risk of facing litigation; such businesses may have to pay much higher business insurance premiums. To avoid paying too much for your insurance, use our FREE insurance comparison tool by entering your ZIP code to find the cheapest insurance!

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General Liability

General liability insurance is an important type of insurance for business and the average costs must be taken into account. This type of insurance may vary from as low as $500 to as high as $15000 in a year. The most basic claims it covers include:

  • Injury claims
  • Property claims
  • Advertising claims

Insurance companies often look at factors, such as the location of the business, the annual revenue and past claims incurred by the business. These factors are then used to determine the average cost of business insurance that a business owner may have to part with for general liability.

Business Insurance Broker

Business Insurance Broker

Business insurance can be quite a complicated area for new entrepreneurs. There are different areas of a business that need to be insured, so as to protect it against costly liabilities.

Determining these areas and getting favorable quotes from insurance companies may also be challenging. However, utilizing a business insurance broker can be very helpful in determining the right insurance needs and costs required by a business. It is true that using the services of insurance brokers requires a certain amount of investment.

However, when you take the time to work with a qualified one, you will be able to budget and spend within your limits, while protecting your business from liability.These business insurance brokerage services are also available online.

Be sure to use our FREE insurance comparison tool by entering your ZIP code to compare insurance companies!