From delicious baked goods to pet grooming, many hard-working entrepreneurs here in Missouri have been putting their amazing ideas wholeheartedly to work. Ten percent of Americans have started small businesses, working hard to fulfill their dreams and be their own boss. Even though many stressful days may be ahead of you, the first one that sees you fulfilling the first order is a thrilling milestone! It’s important to make sure that an unforeseen disaster will not threaten the hard work you have done, and that you are saved from trouble such as lawsuits or outside damage.
Small business insurance, with premiums starting as low as $20 per month, could be your safety net against challenges like customer lawsuits or damage from events resulting from Mother Nature’s wrath. However, not every business requires insurance. On the other hand, large corporations might choose to self-insure, relying on their own resources to cover unexpected expenses. Even though this may seem like a good idea, it’s always great to know that you can count on us here at the Alexander Insurance Agency of St. Charles to be there in your time of need.
Insurance can be a wise investment to mitigate potential risks for the millions of businesses between these two extremes. “Recovering from a loss is challenging without proper insurance coverage,” says Mark Friedlander, Director of Corporate Communications at the Insurance Information Institute.
Let’s explore the costs associated with small business insurance and what it typically covers.
What Are Typical Costs for Small Business Insurance Policies?
In 2024, we gathered quotes from 12 different price comparison platforms and small business insurers. Our findings revealed that basic liability coverage typically costs between $25 and $165 per month. However, your specific rate will vary based on the type of policy you choose, your desired coverage limits, where you choose to hang your “open for business sign”, and the industry you have chosen.
Business Owners’ Policies typically run from $40 to $115 a month, and anywhere from $500 to $1,400 annually. Professional Liability Insurance, costing $45-$165 per month, protects businesses that offer professional services or advice. This type of coverage will run from $540 to $1,980 annually.
A Business Owner’s Policy is a type of coverage that collectively offers multiple forms of coverage into one policy. A common BOP includes the following elements:
- Collective property insurance for your buildings and equipment.
- A form of liability protection that will cover your legal responsibility for any damages or injuries your business causes.
- Business interruption insurance to make up for the much-needed income that becomes lost due to non-functioning job sites. This also assists service industry businesses that can’t remain open after fire damage.
For small to midsize businesses, a Business Owner’s Policy (BOP) can be a savvy financial decision. BOPs bundle essential coverages at a lower cost than purchasing each policy individually. This makes it an attractive option for cost-conscious business owners. Generally, to qualify for a BOP, your business should have fewer than 100 employees and generate less than $5 million annually. Many of these businesses embody the true spirit of Main Street and are the reason why food is on the table for many families.
Commercial Auto:
Cost: $125 to $575 Per Month
If your business owns vehicles, or your employees transport your customers or valuables, a commercial auto insurance policy is essential. At a minimum, this policy must meet your state’s liability requirements, but additional coverage—such as collision and comprehensive insurance—may be necessary to fully protect your vehicles and the entity you’ve worked so hard to create.
For those participating in the ride-share industry, standard commercial auto insurance might not suffice. Since you’re using a personal vehicle for occasional work, you might need a specialized ride-share policy. According to The Zebra, an insurance comparison site, adding ride-share coverage to your personal auto policy can increase your premiums by $5 to $20 per month.
Cyber Insurance:
Cost: $40 to $145 per month
Over the next 15 years, the cyber risk market is poised for significant expansion. With catastrophe risk in the capital markets already surpassing $100 billion, cyber threats could soon reach similar levels. The expanding Internet of Things (IoT) and growing cyber-terror threats will drive rising cyber insurance premiums. It’s essential that the market prepares for this rapid growth and takes proactive measures to stay ahead. Artificial Intelligence is becoming a permanent fixture. Rising cyberattacks will increase loss ratios in the cyber insurance industry, impacting future premiums and coverage needs.
As these threats intensify, organizations will find themselves increasingly vulnerable, making it imperative for insurers to be fully prepared for this surge in cyber risks. Cyber insurance, starting at $25/month, can be an affordable add-on to a Business Owner’s Policy or other business insurance plan. If you don’t require additional coverage or if your insurer doesn’t provide a cyber insurance rider, you can opt for a stand-alone cyber policy tailored to your needs.
General Liability:
Cost: $25 to $115 per month
General liability insurance serves as a safeguard for your business if you’re held responsible for injuries or damages linked to your operations, services, or employees. For instance, if a customer slips and falls in your store, this coverage will handle their medical bills. Similarly, if a contractor accidentally damages a client’s property while on a project, general liability insurance would cover the costs. This policy serves as a financial shield, helping you manage unexpected risks and protect your business from potential losses.
Professional Liability:
Cost: $45 to $165 per month
Professional liability insurance, often called errors and omissions (E&O) coverage, is essential for small businesses that offer professional services or expert advice. Whether you’re a financial advisor offering investment guidance or another type of consultant, E&O coverage safeguards you against claims of professional negligence or misconduct. For example, if a realtor’s recommendation results in a client’s financial loss, this insurance would cover the legal costs of defending against a lawsuit and any potential settlement. It’s a critical layer of protection for anyone whose business relies on their expertise.
Property Insurance
Cost: $60 to $190 per month
Property insurance offers vital protection for your business by covering the costs if your buildings, equipment, or supplies are damaged due to fires, storms, or theft. This coverage extends beyond just the essentials, safeguarding everything from your signs, supplies, or computer network.
Your business’s property is the lifeblood of your endeavor, as you need places for your customers to sit, along with refrigeration, preservation, and HVAC. This valuable coverage ensures that your business can recover and continue operations smoothly even after an unexpected event.
Workers Compensation:
Cost: $35 to $120 per month
In most states, workers’ compensation insurance is a legal necessity for small businesses with employees. This coverage ensures that if a worker gets injured on the job, their medical expenses are covered, and a portion of their wages is replaced during their recovery. Workers’ Compensation is crucial: one small mishap at work can quickly lead to expensive costs without proper coverage. Insurance costs vary by payroll, location, and industry, so understanding these factors is key to determining your premiums.
How Do I Get Affordable Small Business Insurance?
The current climate poses enough challenges to not want to go things alone! The helping and very knowledgeable hand of an expert provides the ultimate in comfort and resilience. Here’s how to navigate the process of finding the ideal business insurance:
Assess Your Industry’s Risks
With so many insurance options available, understanding the risks associated with your business is crucial. For an e-commerce venture, safeguarding against data breaches might be a priority. A physical storefront might need protection against product loss or damage to your premises. Only you can truly gauge the risks your business faces, but seeking a risk assessment from an independent expert can provide valuable insights and help you fine-tune your insurance strategy.
Shop Around for the Best Quotes
Choosing an insurance provider is a major decision, much like other strategic business choices. The first plan you come across may NOT be ideal for your specific needs! By comparing quotes from different insurers, you can find a plan that offers the right balance of coverage and cost. Evaluating options helps ensure comprehensive protection at a price that fits your budget.
Contact us today to ensure that your dreams aren’t hindered by disaster! For years we’ve been helping business owners protect what’s most important to them. After carefully assessing your risk and meeting us here at the Alexander Insurance Agency, you’ll be able to begin a layer of security to help you bypass any unintended lean times.