Average Small Business Insurance Costs in 2026

Based on quotes across 20+ carriers, here are the average monthly costs for small businesses:

Coverage Type	Average Monthly Cost	Typical Range
General Liability	$42/mo	$19–$75/mo
Business Owner's Policy (BOP)	$100/mo	$50–$200/mo
Workers' Compensation	$80/mo	$30–$250/mo
Professional Liability (E&O)	$75/mo	$40–$150/mo
Cyber Liability	$55/mo	$25–$100/mo
Commercial Auto	$175/mo	$100–$350/mo
Umbrella Policy ($1M)	$45/mo	$25–$75/mo

What Affects Your Insurance Cost?

1. Industry & Risk Profile

A home-based consulting firm pays far less than a roofing contractor. Higher-risk industries (construction, manufacturing, healthcare) pay 2–5x more than low-risk businesses (consulting, IT, design).

2. Revenue & Business Size

Insurance is often priced per $1,000 of revenue or payroll. As your business grows, premiums typically increase — but your rate per dollar of revenue often decreases.

3. Location

State regulations, local lawsuit environments, and workers' comp requirements vary significantly. California and New York tend to be most expensive; midwestern states often offer lower rates.

4. Coverage Limits

Standard GL limits are $1M per occurrence / $2M aggregate. Increasing to $2M/$4M typically adds 20–40% to the premium.

5. Claims History

Businesses with prior claims pay more. A clean claims history for 3+ years can qualify you for discounts of 10–25%.

6. Deductible Choice

Higher deductibles lower your premium. A $1,000 deductible vs. $500 can reduce costs by 10–15%.

Cost by Industry

Industry	Avg Annual Cost (GL + BOP)
Consulting / Professional Services	$500–$1,200
Technology / IT	$600–$1,500
Retail / E-commerce	$800–$2,000
Restaurants & Food Service	$1,200–$3,500
Construction & Contracting	$2,000–$6,000
Manufacturing	$2,500–$7,000
Healthcare / Medical	$2,000–$8,000
Transportation / Trucking	$3,000–$10,000

How to Reduce Your Insurance Costs

Compare multiple carriers — Rates vary 40%+ for identical coverage
Bundle policies — BOPs save 10–15% vs. separate GL + property
Increase deductibles — Higher deductibles = lower premiums
Maintain clean claims — 3+ years claims-free unlocks significant discounts
Implement safety programs — Documented risk management can reduce workers' comp by 5–15%
Review annually — Don't auto-renew without shopping the market