A single lawsuit can bankrupt an uninsured small business. Yet 67% of small businesses carry insufficient insurance coverage, often because owners don’t understand what they need or assume coverage is too expensive.
Essential Business Insurance Types
General Liability Insurance
General liability protects against third-party claims of bodily injury, property damage, and advertising injury. If a customer slips in your store or you accidentally damage a client’s property, general liability covers legal fees and settlements. Average cost: $30-$60/month for most small businesses. This is the foundation of business insurance — virtually every business needs it.
Professional Liability (Errors & Omissions)
Professional liability protects service-based businesses against claims of negligence, mistakes, or failure to deliver promised results. If a client sues because your consulting advice caused them financial losses, E&O insurance covers your defense. Essential for consultants, agencies, accountants, real estate agents, and technology companies. Average cost: $50-$100/month.
Business Owner’s Policy (BOP)
A BOP bundles general liability with commercial property insurance at a 15-30% discount compared to buying them separately. It covers your business property, equipment, inventory, and liability in one policy. Most insurers require revenue under $5 million and fewer than 100 employees to qualify. Average cost: $50-$80/month.
Best Business Insurance Providers
Next Insurance — Best for Small Businesses
Next Insurance offers instant online quotes and same-day coverage for over 1,300 business types. Their digital-first approach means no phone calls or paperwork. General liability starts at $26/month. Their certificate of insurance feature generates COIs instantly, which is invaluable for contractors and freelancers who need proof of coverage quickly.
Hiscox — Best for Professional Services
Hiscox specializes in professional liability for consultants, IT companies, marketing agencies, and other service businesses. Their tailored policies include cyber liability coverage increasingly important in 2026. Plans start at $22.50/month.
Hartford — Best for Established Businesses
The Hartford offers comprehensive coverage options for mid-sized businesses with revenue above $1 million. Their workers’ compensation insurance is particularly competitive, and they offer dedicated claims managers for faster resolution. They’ve been insuring businesses since 1810, providing stability and claims-paying track record.
How Much Business Insurance Costs
Most small businesses spend $500-$3,000 per year on insurance, depending on industry, revenue, location, and coverage limits. High-risk industries like construction and healthcare pay more, while home-based online businesses often pay under $500 annually.
Don’t skimp on coverage limits. A $1 million general liability policy costs only $10-$15 more per month than a $500,000 policy, but provides double the protection. The marginal cost of higher limits is almost always worth it.