Small Business Insurance Rates

As a small business owner, you may struggle to meet your budget each month. Although small business insurance rates may not seem affordable, in fact you cannot afford to go without coverage. No one ever expects their property to be damaged or stolen or to be involved in a lawsuit, it is actually quite common, which is why you need to protect yourself and your business.

Also, small business insurance may not be as pricey as you think, as costs vary widely based on the specific coverage required by each business.

In general, most small businesses need property, liability, and workers’ compensation insurance (if they hire employees or contractors). Many business owners with employees also choose to purchase health plans. A knowledgeable insurance agent or broker can determine the right plan to meet your needs and customize any package for your specific line of work.

Commercial property insurance coverage will protect your property for losses due to perils such as fire, vandalism, and theft as well as for business interruption. Depending on where you live and what coverage you select, the price of property insurance can vary greatly. Average premiums for your small business range from $2,000 to $5,000 annually.

In addition to property insurance, liability insurance provides protection in case a customer or visitor is injured because of using your product or service. The cost of liability insurance is based on your company’s payroll estimates and sales. In general, you may pay $2 to $4 for every $1,000 in sales. Your rates could be higher, though, if previous claims have been brought against your business or if you have a high-risk business.

The cost of workers’ compensation is based on your location as well as employees’ job risk and salaries. In general, rates are calculated at a cost per $100 of the employee’s salary. A low-risk employee, such as an office worker, might be covered for $1.25 per $100 of salary. For example, if your office clerk earns $500 per week or $26,000 per year, you would need to pay $6.25 per week or $325 per year.

Small Business Insurance Directory

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