Business Insurance
How Much Does Small Business Insurance Cost in 2025?
Real premium ranges for general liability, BOP, professional liability, and workers comp — by industry, revenue band, and state.
Insurance is one of the most variable costs in a small-business P&L. The same coffee shop can pay $600 or $2,400 per year for general liability depending on payroll, claims history, and which carrier writes the policy.
General liability: $400–$1,500 / year
The baseline policy for businesses that interact with the public. Premiums scale with revenue, square footage, and risk class. Consultants pay the floor; contractors and gyms pay the ceiling.
Business Owner's Policy (BOP): $500–$3,000 / year
Bundles general liability with commercial property. Most retailers and offices save 10–20% versus buying the two separately.
Professional liability (E&O): $600–$2,500 / year
Mandatory for any business that gets paid for advice or design work. Tech, accounting, and design firms cluster at the higher end.
Workers' compensation: $0.75–$2.74 per $100 of payroll
State-mandated above one employee in most jurisdictions. Class codes drive everything — a clerical worker is roughly $0.20, a roofer can exceed $25 per $100 of payroll.
Frequently asked questions
Do sole proprietors need business insurance?
Legally, rarely. Practically, yes — a single liability claim can exhaust personal savings, and most commercial clients require proof of $1M in general liability before signing a contract.
Can I bundle to save money?
Yes. A BOP plus cyber endorsement is the most common cost-saving bundle for service businesses; carriers often discount 8–15% versus standalone policies.
Related reading
What Is a BOP Policy? Business Owner's Policy Explained
BOPs bundle the two coverages every small business actually needs. Here's what's inside, what's excluded, and when to upgrade to a commercial package.