How Much Are Startup Business Insurance Costs? (2024)

How Much Is Insurance for a Startup Business?

Startupsmall business insurance costs can vary. On average, small businesses pay $1,057 annually for general liability coverage.¹ Many small business owners get a Business Owner’s Policy (BOP). This combines business property and liability insurance into one convenient policy. The average cost of this coverage is around $3,135 annually.²

Average Business Insurance Costs for a Startup

Getting the right type of insurance for startups is essential. Without it, you’ll have to pay for claims and legal fees out of pocket. Some common coverages that startups benefit from include:

• Business property insurancefor help protecting your owned or rented equipment, building and personal property at your company.
• Business income insurance, which helps replace lost income if your business is unable to operate due to covered property damage.
• General liability insuranceto help protect your business from claims of bodily injury (slips, tripsand falls) or property damage.
• Data breach insurance, which helps you respond to a breach if personally identifiable information is lost or stolen from a hacker.
• Professional liability insurancefor help covering claims of errors or omissions in your product or services.
• Workers’ compensation insuranceto help provide benefits to employees with a work-related injury or illness.

The average cost of these policies can vary depending on how much coverage you get. One way that small business owners can save money is by bundling coverages into a Business Owner's Policy (BOP). This policy allows you to bundle business liability and property damage coverage into one convenient policy.

Factors Impacting the Business Insurance Cost for a Startup

Some factors that can impact the cost of business insurance for your startup include your:

• Industry
• Location
• Number of employees
• Experience

It’s also important to remember that business insurance is required by law in some states and that startups with highersmall business risksmay also have more costly insurance rates. For instance, construction companies face more risks than accounting firms, so they might pay more for insurance.

You’ll also want to understand your other business startup costs in addition to your insurance price. This can include the expenses of:

• Buying new equipment
• Getting inventory
• Renting or buying a building for your company
• Marketing
• Creating a website
• Getting furniture for your business
• Utilities
• Hiring employees
• Taxes

Common Questions About Startup Business Insurance Costs

Is Business Insurance a Startup Cost?

For most businesses, insurance is considered a startup cost. However, the amount you pay will vary depending on your industry, number of employees and the risks faced on the job.

How Much Should I Budget for Business Insurance?

Setting a budget for your small business or startup is important because it helps monitor your spending. So, how much should you budget for business insurance? While the cost of insurance varies, you’ll want to budget around $1,000 to $3,000 annually for insurance coverage.

Get a Quote for Small Business Insurance Costs for a Startup Today

We’re an insurance company that’s been protecting small businesses and their owners for over 200 years. We’re known for our reputation and quality customer service. We can help you assess your startup’s risks and get the insurance coverage you need. To get started,get a quotetoday.

Last Updated: June 10, 2022