When you launch your small business, you’ll want to have a good idea of what your budget will be. For most expenses, shopping around or getting several bids will be important to ensuring that you’re getting the most for your money.
The cost of your small business insurance will depend on a variety of factors. For example, a sole proprietor with an online retail business may typically pay less than a multi-state mining company with many employees. Businesses in high-risk industries may pay more than those in other types of industries because they are more likely to suffer losses.
Small business insurance factors
There are several factors that could affect the amount you may pay for a small business insurance policy, including:
- Number of years in business
- Legal structure (i.e., corporation, sole proprietor, etc.)
- Products or services
- Assets (i.e., buildings, vehicles, equipment and supplies) and their value
- Size (number of employees, payroll, etc.)
- Loss history
Each of these risk factors has an associated cost that is calculated based on analytics and historical trends. The cost of your policy may fluctuate over time as financial conditions change both within your company and in the insurance market.
Small business coverage types
The cost of your small business insurance package would vary, of course, by the type of coverage your small business requires.
To learn more, read What kinds of insurance does a small business need?