If you’re a small business owner, you already know that protecting your company is just as important as growing it. One of the smartest investments you can make is business liability insurance—but how much should you expect to pay? The answer depends on several factors, including your industry, company size, and especially your location.
In this guide, we’ll break down the average cost of business liability insurance by state and explain what influences those rates, so you can budget smarter in 2025.
What Is Business Liability Insurance?
Business liability insurance—often referred to as general liability insurance—protects your company from financial losses due to claims involving bodily injury, property damage, or advertising harm. It typically covers legal fees, medical expenses, and settlements if someone sues your business for accidents or damages.
National Average Cost in 2025
As of 2025, the national average cost for general liability insurance for small businesses in the U.S. ranges from $40 to $85 per month, or $500 to $1,000 annually. However, your exact rate will vary depending on where your business is located.
State-by-State Cost Breakdown (Estimated Averages)
Here’s a general look at how monthly premium costs can differ by state:
- California: $60–$120/month
High cost due to legal risk and population density. - Texas: $55–$100/month
Moderate pricing but varies by industry (especially oil and construction). - Florida: $65–$110/month
Storm-related claims and tourism can affect rates. - New York: $70–$130/month
Dense urban areas and legal exposure raise premiums. - Illinois: $50–$95/month
Affordable for retail, but rates rise in industrial sectors. - Georgia: $45–$90/month
Stable pricing for most small businesses. - Ohio: $40–$80/month
One of the more affordable states for coverage. - Washington: $50–$95/month
Tech and service industries drive demand for additional coverage. - Arizona: $45–$85/month
Moderate risk environment keeps costs reasonable. - Colorado: $55–$100/month
Rates increasing due to rapid small business growth.
Keep in mind that these are general estimates. Your final premium depends on your business type, claims history, number of employees, and even your office location (urban vs. rural).
Tips to Lower Your Premium
- Bundle policies (e.g., a Business Owner’s Policy or BOP) for discounts
- Maintain a clean claims history
- Implement workplace safety protocols
- Compare quotes from multiple insurers annually
Final Thoughts
Knowing how much business liability insurance costs in your state can help you plan ahead and avoid surprises. While prices may vary, the protection it offers is well worth the investment. Without coverage, even a minor incident could cost more than an entire year’s premium.
Whether you’re in New York or Ohio, liability insurance isn’t just a line item—it’s a smart move that protects your bottom line. Get a quote, compare options, and find the coverage that fits your business and budget.
