Business Insurance Costs for Home-Based Businesses | Insureon (2024)

Insurance for Home-Based Businesses

What kind of work do you do?

Business Insurance Costs for Home-Based Businesses | Insureon (1)

Or call us at (800) 688-1984

Business Insurance Costs for Home-Based Businesses | Insureon (2)

Several factors contribute to the cost of home business insurance, including the size of your business and its risks. Cost estimates are sourced from policies purchased by Insureon customers.

Business Insurance Costs for Home-Based Businesses | Insureon (3)

General liability insurance costs for home businesses

Small businesses pay a median premium of $42 per month (about $500 annually) for general liability insurance, but low-risk home businesses can expect to pay less. The cost depends on several factors, including business size, industry risks, and claims history.

This policy provides financial protection against third-party bodily injuries and property damage. It also protects against lawsuits related to copyright infringement, defamation, and other advertising injuries.

Insureon’s licensed agents recommend a business owner's policy (BOP) over a standalone general liability policy for its increased coverage and affordability.

General liability insurance policy limits for home businesses

Most home-based companies choose general liability coverage with a $1 million policy limit and a deductible of $500.

Learn how to save money on your policy, which coverage limits to choose, and more on Insureon's general liability insurance cost analysis page.

Business Insurance Costs for Home-Based Businesses | Insureon (4)

Business owner’s policy costs for home businesses

Small businesses pay a median premium of $53 per month, or $636 per year, for a business owner’s policy (BOP), but low-risk home businesses can expect to pay less. For example, the annual median cost for a virtual office assistant is $495, while the median for an event planner is $182 – or about $15 a month.

This policy bundles general liability insurance with commercial property insurance, usually at a lower rate than if the policies were purchased separately.

Offering both boosted coverage and savings, a BOP is the preferred policy for comprehensive coverage. You can add endorsem*nts like business interruption insurance to protect against loss of income and other risks.

The cost of a BOP depends on your business property value

Among small business owners that purchase a business owner’s policy with Insureon, 39% pay less than $250 per year and 35% pay between $250 and $500 per year. The cost primarily depends on the value of your business equipment and your type of business.

Business Insurance Costs for Home-Based Businesses | Insureon (5)

Which business owner’s policy limits do home-based companies choose?

Most home-based businesses (90%) choose a business owner’s policy with a $1 million per-occurrence limit and a $2 million aggregate limit.

Learn how to save money on your property coverage, which limits to choose, and more on Insureon's business owner's policy cost analysis page.

Compare small business insurance quotes from trusted providers

Business Insurance Costs for Home-Based Businesses | Insureon (6)

Professional liability insurance costs for home-based businesses

Small businesses pay a median premium of $59 per month, or $713 per year, for professional liability insurance. Low-risk home businesses will pay less for this policy, and may be able to add it to a BOP for further savings.

Also called errors and omissions insurance (E&O), this type of insurance offers critical coverage when you provide expert advice or a professional service. It can also help pay for legal fees related to accusations of mistakes or negligence.

Professional liability policy limits for home-based businesses

As with other business liability policies, the amount of protection you get depends on the limits you choose. Most home-based companies choose professional liability insurance policies with a $1 million limit and a deductible of $500.

Learn how to save money on your policy, which coverage limits to choose, and more on Insureon's professional liability insurance cost analysis page.

Business Insurance Costs for Home-Based Businesses | Insureon (7)

Commercial auto insurance costs for home businesses

Small businesses pay a median premium of $142 per month, or $1,704 per year, for commercial auto insurance. This policy can pay for property damage and medical bills in an accident, along with vehicle theft, weather damage, and vandalism.

Businesses with company-owned vehicles must purchase commercial auto insurance. For personal, leased or rented vehicles used for business purposes, you may need hired and non-owned auto insurance (HNOA) instead.

Business coverage is important since your personal auto insurer could deny a claim for accidents involving business use. Additionally, state laws require you to carry a minimum amount of auto liability insurance for any vehicle.

The vehicle's value and its use affects the premium

A home business that owns one vehicle will pay less for commercial auto insurance than a company with a fleet of vehicles. The cost depends on the type and number of company vehicles, how often they are driven, and the coverage options you choose.

Learn how coverage limits and other factors affect the cost of an auto policy on Insureon's commercial auto insurance cost analysis page.

Business Insurance Costs for Home-Based Businesses | Insureon (8)

Workers' compensation insurance costs for home-based businesses

The median premium for workers’ compensation insurance is $47 per month ($560 per year) for small businesses, but home businesses with only a few employees can expect to pay less. State laws usually require this coverage as soon as you hire your first employee.

It's a good idea to buy this insurance coverage even when it's not required, given the high cost of medical care. Health insurance plans can deny claims for work-related injuries, which is why even sole proprietors should consider workers' comp.

This policy covers the cost of medical treatment for work-related injuries, and also provides disability benefits to injured workers.

Workers’ comp costs depend on the number of employees

The cost of workers' compensation depends on the number of employees and the risks they are exposed to in their work. For example, an IT consultant can expect to pay less for workers' comp than a business that relies on physical labor, such as landscaping.

Learn how workers' comp premiums are calculated and more on Insureon's workers' compensation insurance cost analysis page.

Business Insurance Costs for Home-Based Businesses | Insureon (9)

Cyber insurance costs for home businesses

Small businesses pay a median premium of $140 per month, or $1,675 per year, for cyber insurance. This policy is vital for home offices that handle sensitive information, such as credit card numbers or Social Security numbers.

Cyber liability coverage can help pay for legal fees, customer notification costs, and other expenses related to a data breach or cyberattack.

The cost of the policy depends on how much sensitive data your company handles, and how many employees can access it. A home business policy will cost less than cyber insurance for a large company.

Learn how to save money on your policy, which coverage limits to choose, and more on Insureon's cyber insurance cost analysis page.

Compare quotes from top carriers with Insureon

Insureon’s licensed insurance agents work with top-rated U.S. carriers to find affordable home-based business insurance. Apply today to compare multiple quotes with one free online application. Work with an account manager specializing in your unique business needs.

Updated:

April 29, 2022

Compare insurance quotes for home businesses

Save money by comparing insurance quotes from multiple carriers.

EXPLORE ON INSUREON

What types of insurance do sole proprietors need?What insurance do you need if you work from home?Why do freelancers need insurance?What you need to know about product liability and lawsuitsWhat is homeowner’s insurance?

SHARE THIS ARTICLE

Business Insurance Costs for Home-Based Businesses | Insureon (2024)

FAQs

What is the best insurance for a home based business? ›

The best protection for home businesses is usually a business owner's policy, which bundles general liability and commercial property insurance at an affordable rate.

How much does a $2 million business insurance policy cost? ›

How much is a 2-million dollar insurance policy for a business? On average, an insurance policy that offers coverage for up to $2 million can cost about $30 a month in premiums.

How much does insurance cost for a startup business? ›

Average Cost of Insurance for a Small Business
Type of policyAverage monthly costAverage annual cost
General liability insurance$42$504
Product liability insurance$42$504
Commercial property insurance$67 (median)$804 (median)
Business owners policy$57$684
8 more rows
Feb 26, 2024

What insurance do I need to run my own business? ›

When you're starting your own business, some types of coverage you should make sure to have are: General liability insurance. Professional liability insurance. Workers' compensation insurance.

What is home business coverage? ›

An in-home business policy provides more comprehensive coverage for business equipment and liability than a homeowners policy endorsem*nt. These policies, which may also be called in-home business endorsem*nts, vary significantly depending on the insurer.

What is a small business property insurance? ›

Business property insurance covers your buildings, the contents within those buildings, and loss of income if you're out of business due to a claim. It can help protect your business in case of unexpected accidents or tragedies like fire, theft, wind damage, or even a building's collapse under the weight of snow.

How much does a $1000000 liability insurance policy cost? ›

What's the average cost of a $1 million liability insurance policy? On average, Insureon customers pay $42 per month, or about $500 annually, for a $1 million general liability insurance policy. Additionally, 29% pay less than $30 per month, and 40% pay between $30 and $60 per month.

How much does a $500,000 insurance policy cost? ›

For example, a 30-year-old shopping for $500,000 of coverage and a 10-year term will pay $18.44 a month on average, whereas a 40-year-old would pay $24.80. These premiums increase significantly the older you are, with a 70-year-old paying $397.84 for the same coverage.

How much is a $5 million dollar insurance policy for a business? ›

A $5 million umbrella policy costs around $375 to $525 per year, on average.

How much does advertising cost for a small business? ›

According to the Small Business Administration (SBA), on average, businesses spend about 1.08% of revenue on advertising, with variations by industry[1]. They also say that business-to-consumer (B2C) companies usually allocate more: 9.6% for product companies. 11.8% for services.

Is business insurance a start-up cost True or false? ›

Business insurance is indeed considered a start-up cost. It is an upfront expense to ensure that the business is protected from potential risks and liabilities.

Are insurance businesses profitable? ›

After suffering some of the worst years in their history, insurers say they now see a path to profitability for home and auto policies. Big rate increases are driving up revenue, while the inflationary pressures that pushed up repair and replacement costs appear to be easing.

Is business insurance tax deductible? ›

The IRS generally considers business insurance a cost of doing business, so your policy premiums may be deductible from your taxable income. A tax professional can ensure you fill out the proper paperwork to ensure you are taking advantage of all deductions available to you.

Can a business insure themselves? ›

Some large businesses may choose to self-insure to save money and control costs for their commercial property, auto and general liability coverages. When a business chooses this route, they don't buy a plan from an insurance company.

What is business insurance called? ›

Commercial insurance is also called business insurance. Business insurance covers losses related to unexpected events like lawsuits, accidents, or natural disasters, among others.

Does homeowner's insurance cover a business if it is within your home? ›

Homeowner's insurance protects your home, but it won't cover your business. That's where business insurance steps in, helping protect your business' property, including: Technology.

Who is the number 1 home insurance company in America? ›

1. State Farm. State Farm is currently the largest home insurance company in the country, and it's also the largest auto insurer in North America. State Farm is the largest home insurance company in the country and offers policies in all 50 states.

Which homeowners insurance companies have the highest customer satisfaction? ›

Amica, AIG, and Erie Insurance top the list for consumer satisfaction with property claims, according to a 2024 study by J.D. Power. Travelers and Homesite are rated at the bottom for customer service during claims.

What is the most reasonable homeowners insurance? ›

State Farm, Auto-Owners and Erie provide the cheapest homeowners insurance, based on the MarketWatch Guides team's review. We based our top picks on the most affordable options for customers across a variety of situations and backgrounds, including various credit scores and claim histories.

Top Articles
Latest Posts
Article information

Author: Kareem Mueller DO

Last Updated:

Views: 6415

Rating: 4.6 / 5 (46 voted)

Reviews: 93% of readers found this page helpful

Author information

Name: Kareem Mueller DO

Birthday: 1997-01-04

Address: Apt. 156 12935 Runolfsdottir Mission, Greenfort, MN 74384-6749

Phone: +16704982844747

Job: Corporate Administration Planner

Hobby: Mountain biking, Jewelry making, Stone skipping, Lacemaking, Knife making, Scrapbooking, Letterboxing

Introduction: My name is Kareem Mueller DO, I am a vivacious, super, thoughtful, excited, handsome, beautiful, combative person who loves writing and wants to share my knowledge and understanding with you.