Most small businesses can expect to pay between $500 and $3,000 annually for basic commercial insurance cost, according to a report by ISU Armac Insurance Services.
General liability, workers’ compensation and commercial property insurance run businesses roughly $42, $45 and $67 monthly, respectively, while commercial auto costs business around $147 each month.
“Industry hazard level plays a huge role in what you’ll pay. A computer repair shop handling valuable customer equipment typically pays more for general liability than, say, a consulting business,” ISU Armac said in the report. “Restaurants face higher rates because of fire risks and the potential for customer injuries. Construction companies often pay double the average for property insurance simply because of the risks associated with their equipment and operations.”
The size of your business matters too, according to the report, with your insurance costs typically rising as your revenue and business size grow. The data showed higher revenue generally means more exposure to risk, more employee headcounts increase your workers’ compensation premiums and larger facilities mean more property to insure.
Meanwhile, ISU Armac said the frequency of claims often matters more than company size. Multiple small claims can hurt you more than a single large claim, as insurers view frequent claims as a sign of poor risk management.
At the same time, catastrophic losses may result in substantial premium increases and severe liability claims that can affect your rates for years, the ISU Armac report showed, with social inflation driving up premiums faster than regular inflation, especially for liability coverage.
In 2025, the commercial insurance market sits at roughly $845 billion, according to The Business Research Company, with the market projected to reach $1235.92 billion by 2029 at a compound annual growth rate of 10%.
Major trends during the forecast period include digitization and insurtech integration, parametric insurance, sustainability and climate risk management, data analytics for risk modeling, product customization and flexibility, regulatory compliance and changes.
The slideshow above illustrates the most and least expensive states for business insurance as selected by ISU Armac Insurance Services.
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