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Business Insurance Costs For Startups: How Much Is It (2022)

Business insurance costs for startups have been slowly increasing throughout the years. That is to be expected, though, because inflation and the cost of living have increased. Everything is tied together, so it should not take anyone by surprise. As a startup, you can expect to pay a little more because you are new to the industry. As such, insurance companies will put you at a higher risk than someone who has been in business for years.

It is simply a part of doing business and should be budgeted for the year. If you have not looked into getting a business insurance policy yet, your best path to use is to go online to an insurance comparison site and see what offers you can come up with. Until then, you can see the average cost for each type of business insurance below. Remember that these may not be completely accurate for you because insurance rates go up, and prices are calculated using your personal information.

  • General Liability Insurance – This insurance policy will protect you and your company against injuries to third parties on your property. This policy would pay out on a claim by a customer that they tripped and fell while shopping. The average cost of this type of insurance runs between $400 and $800 per year for a startup company.
  • Business Owners Insurance – This is an excellent policy for startups. It combines a commercial property policy with a general liability one, which saves you money because it is bundled. It will protect you against third-party injury claims and any property damage that may occur. This policy’s average cost will run between $600 and $1200 a year.
  • Professional Liability Insurance – This is also called an Error and Emissions policy. It is designed to cover you and your business from a wide variety of things, such as an error in your website coding, problems with your products, non-delivery of a shipment to consumers, and even professional negligence for service-based companies. Because of the wide variations of coverage, this insurance could cost anywhere from $500 to $2500. The best way to find a closer estimate would be to check with some online offers from a company such as iSelect.
  • Workers Compensation Insurance – This is a legal requirement for you if you have employees working for you. It protects your company from any injuries or deaths during an employee’s work shift. It even goes back in time to cover people who end up with repetitive injuries caused by the tasks they completed while in their employment. This policy can cost you between $1500 and $3000, depending on your industry. You may even be able to find a price cheaper than these averages if you are in an industry that is a low-risk occupation.
  • Employment Practices Liability Insurance – This policy is one that you may not be familiar with, but it can be important. It will cover your company financially against any lawsuits brought against you by employees, past employees, or people that did not get hired and feel wronged. It does not cover injuries or accidents like Worker’s Compensation but everything else that could come up. The average costs of this policy also have huge differences depending on your industry and your needs. Still, it should fall between $1000 and $4000 per year.
  • Cyber Liability Insurance – Today, the world is in the midst of the technological era, which means your business will need protection against any cyber-attacks or data breaches. If you have any information used or stored online, do not skimp on this policy because it can protect you against damages awarded against you. This policy can also fluctuate depending upon your type of company, but it averages between $600 and $6000 for startups.
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When you go through the average pricing of business insurance for startups, you can see that the overall costs can add up. If you need numerous policy types, talk to your insurance carrier and see if they can bundle them into one or two policies. This will save you a little money on the premiums for those that get bundled. Other than that, budget the costs of business insurance and make some money so you can cover the premiums.