How Much Does Business Insurance Cost?

Accidents often take place when least expected. Businesses need to ensure that they will receive a financial backup whenever disasters strike for smooth and continuous operation. They need to invest in business insurance to make sure they will get compensation to cover for any losses.

How Much Does Business Insurance Cost?

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What Is Business Insurance?

By investing in business insurance, companies can protect their enterprises from losses due to incidents that can take place during the usual business affairs. Insurers offer various types of coverage for different aspects of business, such as damages to property, legal liabilities, and employment hazards.

Together with insurers, companies assess their insurance needs depending on probable risks that can change depending on the type of environment wherein the company operates.

Average Cost of Business Insurance Worldwide

Business insurance comes in many forms. A typical small enterprise may purchase a wide range of insurance types, ranging from general liability insurance to data breach coverage. For simplicity, let's focus on the most popular policy company owners purchase — general liability insurance.

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Nearly all companies invest in general liability (or public liability) insurance, which covers practically all aspects of a company, including property damage and injuries by employees. Here are the average costs of this type of coverage in various countries.

  • US – US $741 a year or less than US $62 per month
  • UK – £796.30 per year or more than £66 per month
  • Australia – AU $969 per year or less than AU $81 per month
  • New Zealand – NZ $588 a year or NZ $49 a month
  • Canada – Around CA $500 a year or less than CA $42 each month
  • India – Around US $346 per year or INR 2,000 (US $29) per month

Business Insurance Cost Breakdown

In the US, a standard general liability insurance policy covers

  • Third-party bodily injury (immediate medical or legal expenses once a customer or person gets injured in your business area)
  • Third-party property damage (costs of repair or replacement of a customer property if damaged within company premises)
  • Product liability (payments for the harm or damage your products cause to people or property)
  • Libel, slander, and copyright (advertising injury)

Factors Affecting the Cost of Business Insurance

Some of the factors that can change the cost of the policy include

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  • Classification of your business (whether it's a sole proprietorship, partnership, or corporation)
  • Goods or services you are selling
  • Number of employees
  • The total amount of salary
  • Daily activities of your business
  • Risks your business usually faces, such heavy lifting, tornado chasing, and other activities
  • The assets (buildings, vehicles, equipment, and supplies) your company owns and their financial value
  • Financial reports of your business
  • Business location

Additional Costs Associated with Business Insurance

Ordinarily, you only pay for the cost of compensation covered under the policy. You can apply for additional coverage, such as commercial property coverage for damages in properties, commercial auto insurance for vehicle damage or injuries from operating a vehicle, data breach, and professional liability insurance for professional negligence. You can also purchase workers' compensation insurance for employee injuries and business interruption coverage for lost business income.

Conclusion

Every company needs to secure business insurance to cover costs from any damages or liability accidents during company operations. For prices generally ranging from $700 to $1,000 per year, you can get the financial security your business needs.

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