Small Business Insurance: Everything That You Need To Know In 2025!
by Piyasa Mukhopadhyay Small Business 14 June 2025
Small business insurance.
Yes! It is exactly what you just read! Insurance for a small business like the one you are running at this moment.
Finding the right type of insurance coverage is especially important when you have a small business that is still making its way towards profitability.
So, I think it’s pretty obvious to ask, “How much small business insurance will cost me?” or “Will it ever provide me the protection I am looking for?”
Now, if you are a small business owner and are looking for the right answers, then this is the place for you!
In this guide, I will provide a detailed breakdown of how to choose a specific insurance coverage, the types available in the marketplace, and the cost of each insurance.
Choosing The Best Coverage For Your Business
It is necessary to have the right type of insurance coverage. This can protect both your personal property and your company’s income.
Moreover, this can also help safeguard your business against various liability claims. So, let’s take a look at the kinds of insurance that can provide you with the ultimate protection that you need for your small business.
General Liability Insurance
Firstly, this specific insurance type primarily protects your business and its assets in the event of a lawsuit regarding negligence, bodily injury, libel, slander, or property damage.
Moreover, the state statute would like you to keep this particular insurance with you. Why? This particular insurance can help compensate employees for expenses.
These expenses include medical expenses and lost income if an employee gets hurt in the workplace.
Insurance for Professionals
You can find top companies that can cover your small business from lawsuits resulting from errors or professional negligence.
For instance, let’s say you offered consulting advice, and this leads to a client incurring a loss. Don’t worry! The insurance can cover the expense of legal fees and damages.
Commercial Property Insurance
Fire, theft, and natural disasters can cause significant damage to your property. This insurance protects your building, equipment, inventory, and other material assets from loss or damage.
So, whether your business premises are owned or rented, this insurance enables you to recover quickly in the event of an unfortunate incident.
Business Car Insurance
If you use a car for your business, such as for deliveries, transportation, or service calls, you need commercial auto insurance.
It insures against accidents, car damage, and liability claims that can occur while using the car for business purposes.
Data Breach Insurance
Data breach insurance is very necessary in today’s digital age. I mean, your business can get involved in cyberattacks and data breaches. And you end up losing half or all of your business.
But thanks to the Data breach insurance, you can keep your business secure. The insurance helps you in informing victimized customers, correcting all the compromised information.
And the best part? It also helps in managing public relations to further maintain your firm’s good image.
Employment Practices Liability Insurance
This coverage can protect your small business from claims related to employment issues, including discrimination, wrongful termination, or harassment.
Moreover, it covers the cost of legal defense and settlements, which can be extremely expensive without this protection.
Business Interruption Coverage
Business interruption coverage serves as a safety net. It helps cover lost revenues and operating costs when you are forced to shut down your business temporarily.
This is quite useful because bills never cease to arrive, even when your business is shut down.
Small Business Insurance Coverage: Industry-Specific
When discussing small business insurance, there is no one-size-fits-all solution. Every business has its own particular risks and issues.
Therefore, it is crucial to select insurance that is tailored to your business type. Let’s review each business type so you can determine which one is best suited for you.
Retail Stores
If you own a store or sell items, you require product liability insurance. Why? Because if what you are selling injures somebody, you could be held liable.
Moreover, you also require commercial property insurance to protect your store, inventory, and equipment from fire, theft, or an act of nature.
Consultant Firms
If you are giving expert advice or services, you need professional liability insurance. You try your best! I know!
However, you could accidentally provide incorrect advice that leads to an expensive lawsuit. This insurance enables you to deal with those situations without sacrificing your savings.
Construction Businesses
Construction companies encounter hazardous situations regularly. You must have
- General liability insurance for accidents,
- Workers’ compensation for injured employees, and
- Commercial auto insurance if you own company vehicles.
Food Businesses
Restaurants and cafes would do well to carry business interruption insurance and commercial property insurance to safeguard against kitchen fires, equipment failure, or shutdowns.
In addition to that, commercial auto insurance is a good idea if you make deliveries.
IT and Online Services
The majority of the companies deal with customer data. Well, cyber insurance is pretty crucial for them.
Furthermore, it can protect your business from data breaches, hacking, and even cover the cost of data recovery in the event of theft.
Small Business Insurance That Comes Under $20
The small business insurance cost may start around $20, but it can go up to or even exceed $125 per month. You can even pay $240 or $1500 on an annual basis.
The pricing may vary depending on the service provider, so please check that first. However, one thing you must understand is that the actual cost you will pay will be solely based on the type of protection you need for your business.
For instance, a BOP, or Business Owner’s Policy, is one of the common types of insurance that small businesses typically take out. Moreover, you may need to pay between $40 and $100 per month.
This BOP combines two things: general liability and commercial property insurance, which is your primary need for small business insurance.
If you purchase the standalone cover, the price range can start from $40 or $60, and it can go upto $55 or $70.
You may find some Business Owners Policies (BOPs) that also include business interruption insurance.
- If your small business is considered low-risk, you will only need to pay around $40 per month.
- On the contrary, if it is a high-risk business, you may have to pay around $130 since they are more exposed to the risks.
Small Business Insurance Cost: Complete Breakdown Based On Different Policy Types
Why don’t we take a look at the small business insurance cost, based on the policies? Here’s the table:
| Policy type | Average premiums (every month) | Average premiums (Annual basis) |
| Business owner’s policy | $40 to $100 | $480 to $1,200 |
| General liability insurance | $40 to $55 | $480 to $660 |
| Business interruption insurance | $40 to $130 | $480 to $1,560 |
| Commercial property insurance | $60 to $70 | $720 to $840 |
| Workers’ compensation insurance | $45 to $70 | $540 to $840 |
| Commercial auto insurance | Around $150 | Around $1800 |
| Professional liability insurance | $50 to $60 | $600 to $720 |
| Product liability insurance | $30 to $60 | $360 to $720 |
| Cyber insurance | $140 to $150 | $1,680 to $1,800 |
One thing that you must keep in mind is that these figures are just an estimation. The values can vary depending on your business needs and circumstances.
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