Running a small business means taking smart risks—but going without insurance shouldn’t be one of them. If you’ve been wondering how much liability insurance costs for a small business in the U.S., you’re not alone. It’s one of the most common questions entrepreneurs ask when setting up their operations.
The good news? Liability insurance is usually more affordable than people think—and it could save your business thousands, even millions, in the event of a lawsuit.
Let’s break down what it costs, what affects your rates, and how to get the best coverage without overpaying.
Average Cost of Liability Insurance
On average, general liability insurance for a small business in the U.S. costs between $30 to $60 per month, or roughly $400 to $700 per year. Of course, your exact price will depend on a few key factors (we’ll get to that in a second).
If you need professional liability insurance, expect to pay a bit more—typically $500 to $1,000 per year depending on your industry and risk level.
These costs are small compared to the potential price of a single lawsuit, which can run into the tens of thousands—even if you’re not at fault.
What Affects Your Liability Insurance Cost?
Your premium isn’t a one-size-fits-all number. Insurance companies consider several factors when quoting your policy, including:
1. Industry Type
Certain industries are riskier than others. For example:
- A contractor or landscaper will likely pay more than an online consultant.
- A restaurant faces more physical risk than a graphic designer.
2. Business Size & Revenue
More employees or higher revenue usually means higher premiums. That’s because more activity = more chances for something to go wrong.
3. Location
Where you operate matters. Businesses in highly populated or litigious states may see higher rates. Commercial property costs can also vary based on regional risks like floods or crime rates.
4. Claims History
If you’ve had claims in the past, insurers may see your business as higher risk, which can lead to a higher premium.
5. Coverage Limits
Choosing higher policy limits or adding extra endorsements (like product liability or cyber coverage) will naturally increase your cost—but you’ll get more protection.
How to Save on Liability Insurance
Here are a few tips to lower your premiums without cutting corners:
- Bundle policies (general liability + property = a Business Owner’s Policy, or BOP)
- Shop around and compare quotes from multiple insurers
- Work with a broker who understands your specific industry
- Maintain a safe work environment to avoid future claims
- Only buy what you need—don’t pay for coverage that doesn’t apply to your business
Final Thoughts
Liability insurance is one of the smartest investments you can make as a small business owner. For the price of a few cups of coffee a month, you get peace of mind and financial protection from the unexpected.
Want an exact quote? Most providers offer free online estimates based on your business type and location. Don’t wait until it’s too late—protect your business now, and keep your focus on growth, not risk.
