You’ve made the leap and started your own small business! The possibilities are endless, and though you might be nervous, you know deep down that success will be yours. Even with all your preparation, you’re likely wondering what happens if something goes wrong. That’s why you need small business insurance — to protect you from the financial impact of risks and liabilities that occur at work.

But many new entrepreneurs fear small business insurance costs, thinking that it will be out of their budget. The reality is that you can’t afford to work without insurance: The average settlement for minor injuries stemming from slip-and-fall accidents in 2020 cost between $10,000 and $50,000.

That’s just one of the “whoops” events small business insurance can cover. You may also want coverage for employee injuries, damage to your business equipment, and more. No one thinks that a client or other third party will sue their business, but it happens more often than you think. While you can’t control what types of claims come your way, you can protect your business with insurance.

Long story short? Small business insurance is worth the cost.

How much does small business insurance cost?

Small business insurance costs depend on the type of insurance that you need and buy. For example, the average cost of a general liability insurance policy for cleaners is about $50 per month. A short-term policy might cost about $9 per hour for the same coverage. A professional liability policy in a low-risk industry like dance instruction, which includes general liability, might cost about $44 monthly.

The median insurance premium for a fitness instructor who teaches at her own studio ranges from about $57 per month to $142 per month, depending on her coverage limits, deductibles, and the studio’s construction type.

Most businesses consider one or all of these types of insurance policies:

General liability insurance: Protects you from having to shoulder the cost for third-party claims of property damage, bodily injury, and personal and advertising injury. General liability insurance provides the legal investigation and defense of claims as well as settlements or judgments up to the policy limits. Furthermore, many of Thimble’s general liability policies cover damage to third-party property that you’re working on, or that’s in your care, by removing the care, custody, and control (CCC) exclusion that many other insurers have.

Professional liability insurance: Covers losses stemming from your failure to provide professional services properly. Professional liability insurance provides the defense and investigation of claims over mistakes made by your business operations that may have caused a financial loss for your clients. Also called errors & omissions (E&O) insurance, it is almost always sold along with general liability insurance.

Business Equipment Protection: Provides coverage for losses to your owned, rented, or borrowed business property and equipment that travels with you to and from jobs. Business Equipment Protection can provide repair or replacement costs if you experience theft or accidental damage to the gear you use for work. It is a type of inland marine coverage, which protects business equipment wherever it goes.

Business Owners Policy (BOP): Designed for small business owners, a Business Owners Policy (BOP) combines general liability insurance and commercial property insurance into a convenient bundle. Moreover, you don’t have to include building coverage in your BOP. If you rent your business space, you can choose a BOP with just business contents insurance. Or if you have a mobile business, you can simply opt for general liability coverage. The commercial property portion of a BOP purchased through Thimble includes:

  • Business building insurance, which covers damage to your business structure itself (i.e., the four walls of your building).
  • Business contents insurance, which covers theft or damage to business property inside or within a 100-foot radius of the building.

Business interruption insurance: Arguably one of the more important coverages under a ​​BOP, it covers loss of business income due to interruption of operations as a result of direct physical loss or damage.

Workers’ compensation insurance: Protects you from liability claims brought by employees who are injured or become ill in the course and scope of their employment. Many states require you to have workers’ comp if your business has at least one employee. Coverage varies by state, but policies typically help with the injured employee’s medical bills, lost wages, and rehabilitation and training. Death benefits are usually available for surviving family members.

How much does business insurance cost per year?

Usually, business owners buy coverage on an annual basis with a monthly premium in order to be protected whenever a job arises. However, if you have a steady stream of jobs year-round, paying for an annual insurance policy upfront is the most cost-effective way to buy small business insurance. It can also help you get more business. When people know that you’re insured, they feel more confident that they will be taken care of if an accident occurs.

Thimble’s median customers:

  • Pay about $487 per year for general liability insurance
  • Pay around $520 per year for professional liability insurance, which is almost always sold along with general liability insurance
  • Pay $725 per year for BOP, which bundles general liability insurance and commercial property insurance
  • Pay an additional $150 for CCC coverage

It’s best to get a quote for your business to see exactly what you’ll pay. Your business’ specific details and deductible will affect your premium, which we’ll discuss later.

How much does small business insurance cost monthly?

If you need insurance for more than a couple of weeks in the month, you’re likely better off paying for a monthly policy. You’ll get the benefit of having coverage when you need it, and you won’t be scrambling to buy insurance when you need to focus on work. Additionally, many important optional coverages are only available on monthly policies.

Here are the median monthly costs of Thimble’s small business insurance:

Monthly small business insurance cost

General liability insurance$41
Professional liability insurance$43
Care, custody, and control (CCC)$13
Business Equipment ProtectionStarts at $6; $23 + general liability insurance
Business Owners Policy (BOP)$60

Monthly small business insurance cost

Fitness instructor$85
Event planner$87
Wedding planner$87
Dog walker$89


How much does Thimble’s small business insurance cost?

With Thimble, small business owners can buy insurance, by the job, month, or year. This means you don’t need to pay for coverage when you don’t need it. You can even choose coverage that grows as your business grows.

This is invaluable to certain service providers. For example, a handyman may not have work for several weeks. When he gets a three-day job, he could get small business insurance for as little as $72 per day or $13 per hour. When the job is done, so is his policy and his bill.

Here are the median costs of general liability insurance by the job:

General liability insurance cost by the job


Here are the median costs of professional liability insurance by the job:

Professional liability insurance cost by the job



What factors impact how much small business insurance costs?

Many factors play a role in determining the cost of your small business insurance. Depending on the type of coverage, these factors can include:

  • Deductible: The size of your selected deductible will affect your overall premiums.
  • Industry: What you do involves certain risks. The riskier your occupation is, the higher your premium will be.
  • Location: Where your business operates will impact your premium. Two identical companies across town in different ZIP codes may not have the same premium. Furthermore, security systems (whether local or monitored) can reduce property premiums.
  • Crew size: The bigger your crew, the more risk there is for something to go wrong. It just adds more risks into the mix of probabilities. A larger crew size likely means higher premiums.
  • Coverage limits: Higher limits will increase your premiums. Don’t let that fool you: double the liability coverage doesn’t mean double the premium costs. Get optional quotes for higher limits to make sure you are getting the protection you need at a premium you can afford.
  • Coverage length: Generally, the longer you need coverage, the more you will pay. However, rates may be more favorable when you purchase a policy for a year rather than on an hourly basis.
  • Construction type: Your BOP premium will factor in the construction type of the building where your business operates. A business in a fire-resistant building made of concrete block, brick, or reinforced concrete — and with a sprinkler — will pay a lower property premium than the same business operating out of a wood-frame structure.
  • Fire protection: BOP premiums can also be lower for a business that’s close to a fire station. Supplemental fire protection such as monitored alarms, manual extinguishers or automatic fire suppression systems can reduce your property premium.

Workers’ compensation insurance cost

Workers’ compensation insurance is calculated differently because it pays for the medical costs and lost wages of an employee who is injured while performing work duties or who falls ill as a result of employment. Workers’ comp calculations are based on several factors:

  • The business’s annual payroll
  • The industry’s class code, which ranges by the job’s risk level
  • Insurance claims history
  • The business’s rating multiplier, which is determined by comparing its claims history to the average business that is similar in size and type

What other types of insurance do small businesses need?

While most businesses need general liability insurance, professional liability insurance, and Business Equipment Protection, your business may need other types of coverage.

Commercial property insurance

Commercial property insurance covers your owned building that you operate your business out of as well as the business personal property within it (e.g., furniture, supplies, materials, and electronics). If you own your business space, then you most likely need commercial property insurance. But even if you rent, you probably still own property inside the building, which requires protection. With Thimble, you can purchase standalone general liability insurance without commercial property insurance. But to obtain commercial property insurance, you need to purchase a BOP as Thimble does not offer this policy on its own.

Commercial auto insurance

If you have a business-owned vehicle, then you will likely need a commercial auto insurance policy. Most states require a personal auto insurance policy to drive a vehicle; however, these policies usually don’t cover accidents that happen while performing business-related activities. If you have delivery or work vehicles, commercial auto insurance is something you can’t ignore. Currently, Thimble does not offer commercial auto insurance.

Why small business insurance is worth the cost

We know you don’t want to add another expense to your business budget, but business insurance is well worth what you spend. Consider some of these common claims:

  • A customer slips and breaks his arm
  • A client alleges you missed a deadline, causing her a financial loss
  • A burglar steals thousands of dollars worth of your business computers
  • A fire breaks out in your break room, damaging your office and equipment and forcing you to close the business while you rebuild
  • An employee suffers a concussion falling from a ladder at work

While insurance costs are something no one loves to pay, most small businesses don’t have the extra funds to deal with a loss in the thousands of dollars. Without small business insurance, you’re at risk of needing a loan or closing your doors if you can’t afford to pay a settlement or repair an expensive piece of essential (but expensive) equipment. Small business liability insurance also provides your legal defense and claims investigation, which is important even if you’re falsely accused.

There’s no better time to get a quote to see just how affordable small business insurance can be. Thimble has made the process super simple for businesses of any size and at any stage: Choose “Get a Quote” here or on our app to get started and get your policy in minutes.

Insurance that’s ready for anything

Be ready for the worst-case scenarios that life can throw at your business. After all, a customer can sue you for a slip-and-fall even if their claim doesn’t stand on solid ground. Thimble is quick-thinking insurance that helps you stay on your feet. Get the right coverage at the right price today so your business can perform at its best.