How Much Does Cost Insurance For Small Businesses? All You Need To Know 2022

Small businesses are the backbone of the U.S. economy and account for 90% of all commercial enterprises. Every nation around the globe experiences the same situation. However, the thriving of your small business is hindered by the many risks it may face. This is why business insurance is required.

What is business insurance?

Business insurance is simply money set aside to protect against large future financial losses. Although no one hopes for negative events to occur in the future, small business owners know that they need to protect their growing small businesses from the risk of losses.

Small business insurance, therefore, is a payment plan that “insures” your business against unforeseen events or unexpected losses.

Small business insurance companies can cover financial losses from natural disasters, accidents, theft, and economic crises if they are covered.

Today, business insurance is necessary to ensure your small business is covered for potential liabilities and can survive.

How much does small business insurance cost?

TheWealthCircle has summarized the cost of the most common insurance policies that most small business owners use to protect their businesses. Your business may use other specific insurance policies that cover its risks, but every business should purchase these basic policies before looking for additional insurance.

1. Liability Insurance

Liability insurance covers the costs incurred when you or your employees cause harm to others, injure people, or cause unforeseen scenarios such as lawsuits and claims. It seems similar to the parent company insurance that every business should purchase. The average cost of liability insurance is about $46 per month.

2. Business property insurance

Business property insurance protects your company’s property and assets. It protects against damage, theft, equipment breakdowns, and natural disasters. The average cost of business property insurance is about $85 per month. However, the cost can range from $42 to $417 per month, depending on location and property.

3. Business Owners Insurance (BOP) Policy

A BOP policy is a package that combines the basic insurance coverage most small businesses need for all common scenarios. BOP insurance typically includes liability insurance and business property insurance. The average cost of business insurance is about $100 per month. However, rates vary from $42 to $292 per month, depending on the property, location, and risk.

4. Professional Liability Insurance

Professional liability insurance covers cases where a client claims that your product or service caused serious harm resulting in loss of life or property. This coverage applies to all legal cases that fall under the above description.

A typical professional liability policy costs $60 per month, but costs vary. The cost varies from $40 to $85 per month, depending on the industry, location, number of employees, and claims history.

5. Errors and Omissions (E&O) Insurance

A general errors and omissions policy costs $145 per month and can vary from $75 to $167 per month. E&O insurance is similar to professional liability insurance, but it covers your business against claims of negligence and errors in the performance of your services or the production of your goods.

6. Employment liability insurance

Employment injury insurance protects employees whose medical expenses are paid by the company and its managers. Standard workers’ compensation insurance costs $38 per month per employee. Depending on the employee’s location, industry, and salary, the premium rate per employee varies from $5 to $240 per month.

7. Water Insurance

  • Monthly costs range from $39 to $89 ($468 to $1,068 per year).

Water insurance covers lawsuits and other liabilities for bodily injury and property damage incurred by the customer, third parties, or their property due to the installation, the repair, or any other service.

The best 3 insurance companies for small businesses in 2022

1. Hiscox

Hiscox is one of the leading insurers for small businesses, offering insurance in 49 states, including Washington, DC. Their insurance policies are perfectly tailored to micro businesses’ risks and needs.

They offer several types of insurance, most of which are mentioned in this article.

2. State Farm

Investopedia rated State Farm as the best general insurer for small businesses. This is not surprising, as State Farm offers a wide range of services through a nationwide network of agents. You can request a quote here.

3. Countrywide

It is the top general liability insurance provider in the country. It offers coverage choices for 14 distinct business categories and has an A++ rating from AM Best.

Conclusion

Half of the time, small business owners don’t use their insurance for ten years or more. However, that doesn’t mean small business insurance isn’t worth it. Why else would smart business owners pay monthly premiums to an insurance company?

Because it protects the assets and property of the business from financial losses caused by litigation, property damage, theft, accidents, and employee illness, small business insurance provides comprehensive protection against these risks.

Without such insurance, your small business could go bankrupt within a short period due to unforeseen circumstances against which you were insured.

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