How Much Does Business Insurance Cost?

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Business insurance is a valuable tool for business owners and facility managers who want to protect the interest of their company, its inventory, reputation and staff members. A number of incidents can occur that would impede company operations such as structural damage, theft, legal liabilities, and employee injuries.

The price one ultimately pays when they buy business insurance coverage will depend on a number of factors including the size of the company, number of employees, benefit levels and the industry you are in.

Risk Analysis for Determining Business Insurance Premiums

Essentially, a risk analysis of the company will help insurers determine the potential risks a company poses. The greater the perceived risk, the higher the insurance rate is likely to be. Much of the risk assessment will be evaluating industry risks, which likely have the largest impact on policy costs.

Manufacturers, construction businesses, wholesalers and janitorial businesses are typically considered higher risk due to the nature of the industry whereas workers often deal with tasks on other’s property. On the lower end of the risk spectrum are those who work from home or remotely, as they are exposed to fewer risks.

Coverage Limits: The Effect on Bottom Line Price

You’ll have to pay more for higher coverage limits. However, most small to medium sized business owners opt for what is known amid the insurance industry as a $1 million/$2 million policy. These policies will pay for a wide range of damage as specified by an individual policy’s limitations.

That being said, the average price nationwide for a small company considered a low risk is around $1,900 per year, while larger companies or higher risk industries can pay thousands more. This is especially true for those who desire a full coverage custom package. Savings are possible by:

  • Bundling Insurance Policies
  • Paying Premiums in Full Annually
  • Proactively Prevent and Manage Job Site and Business Risks

When looking to buy business insurance, be sure to talk to a reputable provider who will walk you through all the options and risk assessment procedures.

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