The honest answer is that a new business pays less than an established one doing the same work. Premiums scale with revenue and headcount, and a first-year business has little of either, so a startup sits in the lower half of every range below. The catch: new businesses are the ones signing leases that want a certificate first.
How much is business insurance for a new business?
A solo owner under $100k in revenue is estimated at about $30–$45 a month for general liability, $75–$88 for professional liability and $50–$83 for a business owner’s policy. Two to five people is about $30–$60, $75–$150 and $50–$100. These start from Insureon’s national medians for all trades: a consultancy sits below, a contractor well above.
| Coverage | Estimated monthly | Estimated annual | What it covers |
|---|---|---|---|
| General liability ($1M per occurrence) | $30–$60/mo | $360–$720/yr | Injury and damage to others; what a landlord names. |
| Professional liability (E&O) | $75–$150/mo | $900–$1,800/yr | Financial loss a client suffers from your advice. |
| Business owner’s policy (BOP) | $50–$100/mo | $600–$1,200/yr | General liability plus cover on equipment and stock. |
| Hiscox advertised starting price | from $22.50/mo | from $270/yr | E&O from $22.50, general liability from about $29, a BOP from about $42. |
Estimates from Insureon’s published national medians, $1M/$2M limits, two to five people, all trades. Not quotes. Hiscox writes 49 states plus DC.
See these costs for your own business size, revenue and state
Our general liability vs professional liability vs BOP guide explains which policy answers which claim, and trade-by-trade figures sit in how much small business insurance costs.
What a new business needs in year one, in order
Buying everything at once is how a startup overspends. General liability first, because contracts, landlords and marketplaces ask for it and it is the cheapest of the three. Professional liability second if you sell advice or a service, since general liability says nothing about the quality of your work. A BOP once you own equipment or stock, when bundling beats buying both apart. Workers’ compensation the day you hire, required in almost every state and priced on payroll.
Startup insurance cost by business size
Headcount is the clearest signal an insurer has about scale, and a first-year business sits in the first two rows. No source publishes prices by headcount, so size only moves which half of Insureon’s price band shows.
| Business size | General liability | Professional liability | BOP |
|---|---|---|---|
| Just me, under $100k revenue | $30–$45/mo | $75–$88/mo | $50–$83/mo |
| 2–5 people | $30–$60/mo | $75–$150/mo | $50–$100/mo |
| 6 or more people | $45–$60/mo, often more | $88–$150/mo, often more | $83–$100/mo, often more |
Estimates from Insureon’s published national medians, $1M/$2M limits. Most of Insureon’s customers have fewer than 5 employees, so larger businesses can pay well above these figures. Not quotes.
Startup insurance cost by state
Insureon’s published general liability medians by state sit fairly close together, from $40 a month in Illinois to $59 in Maine, so your trade moves a startup’s price more than your state does. The ranges below start from Insureon’s national median and adjust it for each state.
| State | State GL median | Estimated GL monthly | Estimated GL annual |
|---|---|---|---|
| Florida | $55 | $37–$73/mo | $444–$876/yr |
| Colorado | $54 | $36–$72/mo | $432–$864/yr |
| Alabama | $53 | $35–$71/mo | $420–$852/yr |
| Pennsylvania | $53 | $35–$71/mo | $420–$852/yr |
| Louisiana | $49 | $33–$65/mo | $396–$780/yr |
| North Dakota | $49 | $33–$65/mo | $396–$780/yr |
| Wisconsin | $49 | $33–$65/mo | $396–$780/yr |
| Georgia | $47 | $31–$63/mo | $372–$756/yr |
| Kentucky | $47 | $31–$63/mo | $372–$756/yr |
| Michigan | $47 | $31–$63/mo | $372–$756/yr |
| New Jersey | $47 | $31–$63/mo | $372–$756/yr |
| Arizona | $45 | $30–$60/mo | $360–$720/yr |
| Oklahoma | $45 | $30–$60/mo | $360–$720/yr |
| Kansas | $44 | $29–$59/mo | $348–$708/yr |
| Massachusetts | $44 | $29–$59/mo | $348–$708/yr |
| Nevada | $44 | $29–$59/mo | $348–$708/yr |
| New York | $44 | $29–$59/mo | $348–$708/yr |
| Texas | $43 | $29–$57/mo | $348–$684/yr |
| California | $42 | $28–$56/mo | $336–$672/yr |
| Iowa | $42 | $28–$56/mo | $336–$672/yr |
| North Carolina | $42 | $28–$56/mo | $336–$672/yr |
| Ohio | $42 | $28–$56/mo | $336–$672/yr |
| Tennessee | $42 | $28–$56/mo | $336–$672/yr |
| Virginia | $42 | $28–$56/mo | $336–$672/yr |
| Illinois | $40 | $27–$53/mo | $324–$636/yr |
| Washington | National figure ($45) | $30–$60/mo | $360–$720/yr |
Estimates from Insureon’s published medians for each state, $1M/$2M limits, two to five people, all trades. Insureon publishes no figure for Washington, so it uses the national one. Not quotes.
All fifty states and DC are in our guide to average business insurance cost by state.
Startup insurance cost by limit
Limits are a per-occurrence figure over an annual aggregate, and $1M/$2M is what nearly every contract names. Insureon reports that 85% of its small business customers choose $1M/$2M, and that the 8% who choose $2M/$4M pay only a dollar a month more at the median. Dropping below $1M/$2M saves little and fails the first certificate check. More in our guide to $1 million liability insurance cost.
| Limit | Median monthly | Median annual | Chosen by |
|---|---|---|---|
| $1M / $2M aggregate (standard) | $45/mo | $542/yr | 85% of customers |
| $2M / $4M aggregate | $46/mo | $553/yr | 8% of customers |
Insureon’s published general liability medians by limit for its small business customers. No source publishes figures for other limits or umbrellas. Not quotes.
An LLC does not do what most founders think
The commonest reason a new owner skips insurance is forming an LLC and believing the problem is solved. The structure separates your personal assets from the company’s debts, so if the business fails owing money, creditors generally cannot take your house. That is all it does. It does not pay a claim, appoint a lawyer or stop anyone suing the company, where your assets and income sit. Insurance pays the defence and the settlement. Sole proprietors have the same need with one layer fewer.
How insurers price a business with no history
An insurer normally rates on last year’s revenue, payroll and claims. A startup has none, so the quote is built on projected revenue, the trade class you pick and the owner’s experience. No claims history is neutral rather than bad. Here is the trap: founders quote the revenue they hope for, the premium is set on it, and they pay all year. Give a realistic figure and say so if you outgrow it, since mid-term adjustments are routine.
When to buy, and why after is too late
Buy before the first client contract or lease, not after. A policy responds to claims arising from the date cover starts, so buying the week after an incident does nothing, and landlords want the certificate before you take the keys. Quote while you negotiate and start cover the day the agreement does.
How to get the cheapest honest quote
- Quote real first-year revenue. Insuring the business you hope to be is the biggest startup overpayment.
- Pick the trade class that matches the work. A consultancy priced as a general contractor pays for a $162 general liability median instead of $32.
- Start with one policy. General liability at $1M/$2M, then add the rest when the need is real.
- Pay annually. Instalments usually carry a fee.
- Do not drop limits to save a few dollars. A rejected certificate costs you the contract.
- Re-quote at twelve months. A real trading year with no claims makes year two negotiable.
Where these numbers come from
The ranges on this page start from Insureon’s published national medians for its small business customers ($45 a month for general liability, $88 for professional liability, $83 for a BOP) and adjust them for each state’s published general liability median. Each range is the band Insureon’s own price distribution puts around the median, and size only chooses which half of it shows. Our small business insurance cost calculator runs the same arithmetic and lists every source.
Hiscox and new businesses
Hiscox quotes new businesses online, including first-year sole proprietors and single-member LLCs. Its advertised starting prices, shown in the cost table above, sit below Insureon’s published medians and mark the floor a low-hazard startup with modest projected revenue can aim for. A startup with employees, vehicles or a higher-risk trade will usually do better comparing several insurers through a broker or agent. If your new business keeps books, see our bookkeeper insurance cost guide.
Frequently asked questions
How much is business insurance for a new business?
A brand-new solo business under $100k in revenue is estimated at about $30–$45 a month for general liability, $75–$88 for professional liability (E&O) and $50–$83 for a business owner’s policy, starting from Insureon’s published national medians. A new business of two to five people is estimated at about $30–$60, $75–$150 and $50–$100. First-year businesses usually sit in the lower half of each range, because premiums grow with revenue and headcount.
Does an LLC need business insurance?
Yes, and for a reason people often miss. An LLC separates your personal assets from the company’s debts. It does not pay a claim, hire a lawyer or stop anyone suing the company itself, where your business assets and income sit. Insurance pays the defence and the settlement, and a landlord or client asks for a certificate whatever your structure.
Do sole proprietors need business insurance?
A sole proprietor has more reason to carry it, not less, because nothing separates the business from your personal assets. A claim against the business is a claim against you. General liability at $1M/$2M limits is the usual start, estimated at about $30–$45 a month solo, with professional liability added if you sell advice.
When should a new business buy insurance?
Before the first client contract or lease, not after. A policy covers claims arising from the date it starts, so cover bought after an incident does nothing about it, and most contracts and leases want a certificate before you begin work. Workers’ compensation is separate: it is required from the day you hire your first employee in almost every state.
What is the cheapest insurance for a startup?
General liability at $1M/$2M limits, estimated at about $30–$45 a month solo, or professional liability at about $75–$88 if you sell advice rather than a product. The cheapest honest quote comes from reporting real first-year revenue, picking the right trade class and paying annually.
Do I have to buy through you?
No. This site publishes cost guides and earns a commission if you get a quote through a partner link. We are not an insurer or a broker, we do not sell your details, and a quote costs you nothing and commits you to nothing.
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Disclaimer: Informational only, not insurance advice or a substitute for a licensed agent. Registration and workers’ compensation rules change by state; confirm current requirements before relying on them. Coverage descriptions are summaries; policy terms govern. Prices are illustrative and vary by state and business. Hiscox is available in 49 states and DC, not Alaska.