How much does business insurance cost?
Key takeaways
Business insurance prices start from £7.25[1] a month but vary by industry, size, and risk factors
Every business, regardless of size or sector, should consider insurance for legal compliance and protection against unforeseen events
There are several ways to lower the cost of business insurance including comparing insurers and bundling policies
How much does business insurance cost?
The table shows the average prices paid by our customers for the most common types of business insurance.
Average price means 51% of customers paid this amount or less. Cheapest price means 10% of customers paid this price or less.
Type | Monthly | Yearly |
|---|---|---|
Public liability insurance | £7.42[2] | £84.25[3] |
Professional indemnity insurance | £7.25[1] | £78.40[4] |
What impacts the cost of business insurance?
The cost of business insurance varies, depending on a number of factors. Understanding these factors can help companies manage their insurance expenses more effectively:
The nature of your business and the level of associated risk has a significant impact on insurance costs. Industries like construction or manufacturing often have higher premiums due to greater risk of accidents or damages. Industries such as consultancy may benefit from lower rates due to fewer physical risks.
Larger businesses with more employees or extensive assets typically face higher insurance costs. This is because the potential for claims increases with business size. Conversely, smaller enterprises may enjoy more modest premiums.
A history of numerous insurance claims can result in higher premiums as this indicates a higher risk to insurers.
A strong business credit score reflects stable financial health, which may lead to more favourable terms and lower premiums.
Industry risk factors
Size and scale of business
Claims history
Business credit score
Who needs business insurance?
Every business, regardless of size or sector, should have insurance. It is vital for protection against unforeseen events and for legal compliance, whether you run a small business or a large firm.
A company’s insurance needs will vary, depending on the nature of the business. To ensure your business is compliant and adequately protected you should consider:
Activity-specific policies
The nature of your business determines your insurance needs. For example, a construction company needs builders' insurance, whereas a graphic design studio might require professional indemnity insurance.
Legal mandates
In many areas, specific types of business insurance are legally required. For instance, if you employ others, you must have employer's liability insurance to protect employees in case of work-related injuries or illnesses. Failure to purchase employers’ liability insurance can result in a £2,500 fine for every day you are not properly insured.
Requirements of clients and suppliers
Some clients, suppliers and professional bodies will only work with you if you have certain types of insurance such as public liability cover, even if it’s not a legal requirement for your business.
How do I choose business insurance?
When selecting business insurance, consider more than just the price. You should also take into account:
The reputation of the provider - a reputable provider ensures reliability and quality of service, which can be invaluable in times of need
Cover options - ensure the insurance covers all potential risks specific to your sector
The future of your business - your business will evolve, and so will its risks. Opt for insurance that can adapt to your long-term needs
Can I reduce the cost of my business insurance?
It’s sometimes possible to reduce the cost of your business insurance by taking the following steps:
Raising your contribution to any claim usually lowers your premium.
Implementing safety measures or improving security systems may mean insurers view your business as lower risk.
Taking out different policies with the same insurer can give you access to discounts.
It’s important to compare quotes to ensure that you are getting the best price and appropriate cover for the policy you need.