How Much Does Small Business Insurance Cost? 

A record 5.2 million people took the leap into small business ownership last year. Like you, each one faced important questions, not only about their products or services, but about how they will manage their risk. Who needs insurance and what kind? Where can you find a policy that fits your needs? And how much does small business insurance cost? 

What Determines the Cost of Small Business Insurance? 

From accidents and storms to vermin and hooligans, every small business is exposed to risk. The first step in calculating the cost of a small business insurance policy is figuring out how much risk is involved. A freelance writer who works alone at home on a computer has entirely different risk exposures than a store owner with a couple of employees.  

The difference in risk prompts a difference in coverage. While the freelance writer may not have a lot of insurable business property, they may need a Professional Liability policy to protect them from things like class-action lawsuits against a publisher, for example. By contrast, the store owner likely needs a Business Owners Policy. A BOP combines general liability with coverage for property (buildings and permanently installed equipment) and business personal property (everything you own that would fall out of your building if you picked it up, turned it upside down, and shook it). 

Underwriting guidelines vary among insurance carriers. Additional information many traditional insurance carriers require you to provide include the: 

  • Age and size of the business 
  • Company assets and annual revenue 
  • Condition and location of the property 
  • Loss-prevention measures 
  • Financial history 
  • Loss history 
  • Policy limits 

Some less-talked-about things that drive up the cost of small business insurance are time and bloat. Traditional insurance carriers prefer not to serve small businesses. Their systems are not equipped to evaluate the risks appropriately, so there is a lot of back and forth between the carrier, agent, and policyholder. It can take days and even weeks just to get a quote—or to be told your business is outside their appetite. If/when a quote comes, the policies are designed for large businesses, bloated with coverages you pay for but don’t need. 

Coterie offers small businesses an alternative to the traditional insurance experience. By automating our underwriting process, insurance agents and small business owners can: 

  • Find out instantly if a business is in our appetite—we write 80 percent of the small business market. 
  • Rely on our automated underwriting to get a bindable quote in less than four minutes—24 hours a day, every day of the year. 
  • Bind the policy with the click of a button—policy documents are available to you immediately. 

So … How Much Does a Small Business Insurance Policy Cost? 

Nationally, annual small business insurance costs average $1660 for Professional Liability to $2240 for a BOP. When looking at averages, though, recall the story of the two statisticians who decided to become deer hunters: 

They bought all the gear, drove out to the woods, climbed into their stands, and waited. Soon came a buck, moving slowly but steadily into range. The two silently signaled each other to get ready. As the buck drew closer, the first statistician fired, the bullet speeding over the buck’s back. The second fired, the bullet going under the buck’s belly. As the deer ran off, the statisticians clamored from their trees, shouting gleefully, high-fiving each other joyfully. And why? Because, on average, they got their deer. 

Most small businesses will find the coverage they need in a General Liability, Professional Liability, or BOP. The key is to find those policies scaled specifically to your small business—not some bloated, over-priced imitation. This is where Coterie Insurance shines. We’re obsessed with small businesses and live our mission to provide simple, fast, reliable insurance coverage specific to your business’ needs. Policies can be endorsed to add coverage for unique risks not addressed in the base policy, for example, liquor liability, leased equipment, additional insureds, and more. Endorsements change the policy and typically increase the premium. 

Ask Your Agent for a Quote from Coterie 

The question shouldn’t be, “How much does small business insurance cost?” The question should be, “What are you getting for your money?” From our broad small business appetite to our commitment to speed, simplicity, and service, Coterie Insurance specializes in the insurance protection small business owners need and the value they deserve. 

Whether you’re just starting your business, working a side gig, or becoming aware of the important role insurance plays in helping you manage risk, finding an independent insurance agent is a smart decision to help you protect your business and future. 

Important note: Homeowners insurance policies do not cover home-based businesses; most policies include language that specifically excludes this risk.

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