Business Insurance Cost Estimator
Insurance is the startup cost most founders get wrong — either skipping it entirely or over-buying coverage they don't need. This estimator shows what your business type actually requires, what it costs in your region, and where bundling saves money.
Which Coverages Are Legally Required vs. Optional
Workers compensation is the only universally mandated business insurance. 49 states require it once you hire your first employee (Texas is the sole exception, and even there most employers carry it voluntarily). The penalties for operating without it range from $1,000/day fines in California to criminal misdemeanor charges in New York. Beyond the legal mandate, an on-the-job injury without workers comp means you're personally liable for medical bills, lost wages, and potential lawsuits — a single torn rotator cuff claim averages $30,000-$50,000.
General liability isn't legally required, but it's effectively mandatory. No state law forces you to carry it, yet your landlord's lease requires it, your clients' vendor agreements require it, and payment processors like Square and Stripe can terminate your account after an uninsured claim. At $400-2,500/year for most small businesses, the question isn't whether you can afford GL — it's whether you can afford a $75,000 slip-and-fall lawsuit without it.
Commercial auto is required by state law if you use vehicles for business. Your personal auto policy has a business-use exclusion buried in the fine print. If you're driving to client sites, hauling equipment, or operating a food truck and get in an accident during business hours, your personal insurer will deny the claim. The gap between a $1,200/year commercial auto policy and a $50,000 denied claim is the most expensive insurance lesson in small business.
BOP vs. Separate Policies: When Bundling Pays Off
A Business Owner's Policy saves 15-25% over buying GL and property separately. The math is simple: if your general liability runs $1,200/year and commercial property runs $1,000/year, buying them separately costs $2,200. A BOP bundling the same coverages typically costs $1,650-$1,870 — saving $330-$550/year. Multiply that over the life of your business and the savings compound. BOPs are available to businesses under $5M in revenue with fewer than 100 employees, which covers nearly every startup.
The catch: BOPs don't include everything. Workers compensation, commercial auto, professional liability, and cyber liability are never part of a BOP. You'll still need to buy these separately. The BOP discount only applies to the GL + property bundle. Some insurers let you add endorsements (inland marine, equipment breakdown, business interruption) to a BOP for a modest upcharge, which is almost always cheaper than standalone policies for those coverages.
Industry-Specific Risks That Drive Premiums
Restaurants carry the most insurance complexity of any small business. You need GL (high slip-and-fall risk), workers comp (kitchen burns, knife injuries), commercial property (expensive equipment), product liability (foodborne illness), and potentially liquor liability if you serve alcohol — which alone adds $2,000-$5,000/year. A full-service restaurant with 10 employees and a liquor license should budget $12,000-$20,000/year for insurance. The highest-risk item isn't the coverage you'd expect: it's the grease trap. Grease fires cause 57% of restaurant property claims.
Cleaning services face disproportionately high workers comp rates. At $3.50-$5.00 per $100 of payroll, cleaning sits between office work ($0.25) and construction ($8.00) on the risk scale. The driver is repetitive motion injuries (shoulders, knees, backs) that generate high-frequency, moderate-cost claims. A cleaning company with 10 employees earning $30,000 each pays $10,500-$15,000/year in workers comp alone — 35-50% of the total insurance bill. This is why many cleaning companies aggressively push safety training: every claim-free year earns a 5-15% experience modification discount.
Landscaping and food trucks need commercial auto — and it's not cheap. Commercial auto for a single vehicle runs $1,200-$3,000/year depending on the vehicle type, driver records, and coverage limits. A landscaping company with a truck and trailer fleet can easily spend $5,000-$12,000/year on commercial auto alone. Food trucks are classified as mobile restaurants by insurers, which means they need both commercial auto AND commercial property coverage on the same vehicle — a unique (and expensive) insurance requirement that catches many food truck owners off guard.