Does Business Insurance Cost More for a Small Business Owner?

The same basic factors that affect business liability insurance costs to small businesses also affect business liability insurance costs to large corporations. General liability insurance is, overall, similar for companies of all sizes. Usually, the greater the risk, the greater the insurance costs regardless of the actual size of the company.

Business insurance may be an expense any budget-conscious small business owner is concerned about. It is usually required by law to some degree, again to both small and large companies alike, but many small business owners do not know liability insurance specifics. They may fear that, as a small company, they are indeed paying much more for insurance than a larger company and are helpless to do much about it.

Can Insurance Costs Meet a Small Business Budget?

The fact is many things contribute to the overall cost to both small and large business owner's liability insurance policies. Many of these things are within the owner's ability to control in order to make insurance costs more affordable. As you will see when you compare business insurance policies, insurance costs can meet a small business budget.

As much as the cost of insurance itself may hit the small company's budget harder than the large company's budget, the risks of not carrying appropriate coverage are greater to the small company. The small business has much more at stake if faced with a legal claim or a lawsuit. If they are forced to pay out of pocket for legal costs that go above their insurance limits, they could face being financially wiped out and be put out of business.

Larger businesses tend to have their risks and liabilities spread out. A large company is theoretically a lot more likely to survive the same lawsuit the small business faces but cannot withstand. This is what makes a small business's liability insurance more of an investment in their future survival than a simple expense on an accounting ledger. It may cost more to the small business owner's perspective, but it is far worth it considering the potential dangers facing underinsured small companies.

How Can Small Businesses Control Insurance Costs?

The good news is that since various things affect the cost of insurance for businesses of all sizes, the price of insurance can be greatly managed. By customizing coverage purchases, it is possible to meet the basic budget without compromising the business's overall safety. There are some ways you can keep your business's coverage as cost-effective as possible.

The basic coverage required by local laws for specific businesses cannot be altered much, so this is the first type and amount of coverage to account for in an insurance budget. General liability coverage, which includes such additional forms as worker's compensation, errors and omissions, director's insurance, and product liability insurance, is overall protection for businesses. The costs vary from business to business and industry to industry mostly based upon the level of risk involved.

General liability insurance coverage can be made more affordable by only purchasing the very basic types of coverage needed. For example, a retail shop selling women's apparel will not purchase errors and omissions insurance. This type is geared towards insuring professionals who provide advice which their clients act upon and will not apply to the retailer.

Business insurance does not necessarily cost more for a small business than it does a larger one. It is based upon many factors outside the insured's control as well as factors within the insured's ability to manage. Shopping for competitive liability insurance quotes prior to securing coverage is just one more way for business owner's to keep small business owner insurance costs as affordable as possible.

FREE Business Liability Insurance Quotes

Get Quotes

Business Liability Testimonial

"I was very surprised at how fast and easy it was to get a large selection of business liability insurance quotes using this site."

Sarah J, Chicago IL

Business Liability Testimonial

"It took almost five minutes of filling out a form to get connected with liability insurance providers tailored to my needs."

Teresa N, Miami FL

Business Liability Testimonial

"This site helped put me in touch with a business insurance provider for my dental clinic quickly, with no fuss. Very convenient!"

Christina T, Tempe AZ

  • Allstate
  • Nationwide
  • American Family
  • Country
  • Hartford
  • Farmers