How much does business insurance cost?

Business insurance can include different types of cover bought separately or together. Start with your activities, legal obligations and contracts. You do not necessarily need every type.

Types of cover to budget for

Use this table to identify what you may need to buy.

Type of cover	What to establish
Public liability	Whether you need cover for injury to customers or members of the public, or damage to their property.
Professional indemnity (PI)	Whether claims about professional services are relevant.
Employers’ liability (EL)	Whether your workforce arrangements create a requirement.
Assets or other selected sections	Which equipment, property or other risks need cover.

Read about public liability, professional indemnity and employers’ liability for the full explanations. Our guide to what business insurance you need helps with the wider selection.

Payment costs to check

The premium is the price of the insurance. Check any separate fees and finance charges as well as the premium:

• Payment arrangement: compare the annual-payment total with any available instalment offer.
• Other fees: record only documented fees and check whether they are already included in the total.

One type of cover is not the price of a whole package

A public-liability-only starting price does not represent a package that also includes employee claims, professional-service claims or equipment. An advertised EL price may itself concern combined cover or an add-on.

If a package already includes employers’ liability, do not add a separate advertised employers’ liability price to your budget. Check the contents before combining figures; unrelated headline prices do not establish that the resulting package is available to your business.

Why two small businesses can receive different quotes

Example: independent consultant. A consultant gives recommendations and needs to investigate claims about professional errors. The consultant should check the services insured, contract responsibilities, cover limits and cover for previous work.

Example: small trade business. A trade business works at customer premises, has people working with it and uses tools. It should check the risk of injuring customers or damaging their property, workforce arrangements and equipment cover.

These hypothetical examples illustrate different budgeting questions, not which business will pay less. Our tradesperson insurance page explains package selection for trade businesses.

Use this process to turn your cover requirements into a budget. The recording template later in this guide helps you keep the quotes and payment details together.

1. Identify the types of cover your activities and obligations require.
2. Gather accurate details of your services, workforce and relevant assets.
3. Record required limits, contractual conditions and existing cover for earlier work.
4. Request written quotes using consistent business details and cover requirements.
5. Compare the sections, restrictions, excesses, fees and payment totals.
6. Budget for the documented total and actual payment dates separately.
7. Review the budget when activities, people, assets or requirements change.

Have these details ready:

• activities, turnover or fee income requested;
• staffing and wage roll where relevant;
• asset values and claims information;
• contracts, required limits and start date; and
• existing cover and relevant previous-work requirements.

If an application category does not fit your work, clarify it with the provider before buying.

A price comparison based on clearly defined businesses and cover can provide context. It is not a personalised estimate or the price of every business’s package.

Check what the number actually measures

Use the explanation or footnote beside the price to distinguish these figures.

Price measure	What it means
Mean	All prices added together, then divided by the number of prices.
Median	The middle value when prices are put in order.
Customer or quote threshold	A stated proportion paid or was quoted below or at a price. It does not establish the mean.
Advertised starting price	A lower-end promotional figure subject to its stated basis and eligibility, rather than a guaranteed offer.

Illustrative examples: “10% paid less” does not describe a typical price. “51% were quoted less” is not an arithmetic mean.

Also check where the figures come from. Quote data records prices offered; purchased-policy data records policies bought. Those groups can have different mixes of businesses and cover.

Check whether the comparison matches your business

Look for:

• the types of cover and sections included;
• which businesses and locations the figure covers, and who qualifies;
• limits, excesses and important conditions;
• quotes versus purchased policies;
• when the prices were collected; and
• tax inclusion, payment basis and excluded charges.

A recently updated article may still use older price data.

Why your quote can differ from an advertised price

Your services, workforce, assets or cover choices may differ from the advertised basis. Eligibility and payment arrangements can differ too. Obtain a quote for the actual business rather than treating the advertised figure as your budget.

Different types of cover address different losses. Insurers do not all calculate prices in the same way or ask the same questions.

This table gives an overview of factors that may affect a quote.

Factor	Why it can affect the quote
Activities and services	The work can create different types and sizes of claim.
Business size	Turnover, fee income, workforce or wage roll (total workforce pay) may describe the scale of the risk.
Locations and working arrangements	Premises, off-site work and relevant countries affect where losses could arise.
Limits and sections	Amounts insured and selected sections change what is being priced.
Assets	Values, storage and security matter where asset cover is selected.
Claims history	Earlier claims and relevant known problems may affect offered terms.
Excesses and conditions	Contributions towards claims and restrictions change the cover being compared.

Public liability insurance cost

Pricing factors may include activities, contact with customers or the public, property involved, limits and claims history. Check the work and possible consequences rather than assuming a small job means a small risk.

Our public liability cost guide explains these factors in detail.

Professional indemnity insurance cost

Pricing factors may include professional services, fee income requested, projects, contractual responsibilities and limits. Check that the same services and previous work remain covered when comparing prices.

Our professional indemnity cost guide explains these checks.

Employers’ liability insurance cost

Pricing factors may include activities, workforce arrangements and wage roll where requested. Check whether a combined package price is being presented rather than the price of employers’ liability alone; there is no universal cost per employee.

Our employers’ liability cost guide explains these checks.

Compare the total payable for the same cover under each payment option. Instalments may include extra charges, but the actual offers determine which costs less.

Monthly equivalent versus actual instalments

An annual price divided by 12 is a monthly equivalent. It is not necessarily an available monthly payment.

Use this table to recognise the price presentation.

Price presentation	What it tells you	What still needs checking
Annual premium	The price of the insurance for the stated period and basis.	Fees and payment terms.
Annual price divided by 12	A monthly equivalent.	Whether instalments are offered and their actual total.
Instalment offer	A proposed payment arrangement.	Initial and later payments, charges and total payable.

Do not assume there are twelve equal payments or that a monthly equivalent includes instalment charges.

Compare the total payable

Record the actual schedule and total for each option:

• initial payment, including any deposit;
• number, amounts and dates of later payments;
• fees, finance charges and tax inclusion as documented; and
• full total payable.

Check that the schedule agrees with the total. Do not count a deposit twice or add a charge again if it is already included. Keep the premium, fees and finance charges distinct where the documents distinguish them.

The total tells you how much you will pay overall. The payment dates tell you when the money must be available.

Review what you are buying and how it is priced before reducing cover. These checks can help you identify differences, without promising a saving:

• Use the same accurate business details and cover requirements when requesting quotes.
• Check for accidental duplication, recognising that similar policy names can cover different losses.
• Reassess limits, assets and sections against current needs and obligations.
• Compare full payment totals, not just the first payment.
• Identify differences in exclusions, conditions and included sections.
• Ask how a proposed change affects cover before accepting it.

Compare value as well as premium

A lower premium may come with different limits, excesses, exclusions, defence-cost treatment or cover for previous work. Check what differs and whether those differences matter to your business.

An excess is an amount your business may have to contribute towards a claim. Check whether you could afford it. Record it separately from the annual premium budget because it is a potential contribution, rather than a guaranteed yearly bill.

Do not assume increasing an excess will reduce every premium. Ordinary excess choices should not be applied to compulsory EL without checking the relevant arrangements.

Our guides to comparing business insurance quotes and limits and excesses explain those checks.

Give accurate business details when requesting quotes

Understating activities, staffing, turnover or asset values does not produce a sound budget. The quote needs to reflect your business and the policy’s valuation requirements.

Business insurance requires a fair presentation of the risk. This generally means clearly disclosing material information the business knows or ought to know. Material information could influence whether a prudent insurer accepts the risk and on what terms.

Or, failing that, give enough information to alert the insurer that it needs to ask further questions. Answering the application questions alone may not be enough. Ask the broker or insurer if you are unsure what to disclose.

Check previous work before switching or cancelling

Check legal and contractual requirements before removing cover or lowering limits. For PI, check cover for earlier services and claims that may be made later. The end of a project does not establish that insurance is no longer needed.

Confirm the relevant dates, reporting conditions and any need for run-off cover with the provider before making a change.

Your renewal price may change because your business, cover, payment terms or the insurer’s pricing has changed. Compare the documents and ask the provider to explain any differences.

Check activities, workforce, assets, limits, sections, claims information and payment terms against the previous documents. These are possible areas to investigate, rather than a diagnosis of your price change.

Compare the full terms and total price before deciding whether to renew or switch. Keep the previous-work checks above in mind. Our business insurance renewal guide provides the fuller review process.

Use this recording template for each written offer after checking the cover and payment terms. It records quote details rather than calculating a price or providing a personalised estimate.

Budget item	What to record	Your quote details
Provider and quote reference	Provider, reference and date.
Cover included	Separate policies or package; included sections.
Limits and restrictions	Important limits, excesses, exclusions and previous-work checks.
Total if paying annually	Documented full amount on that basis.
Total if paying by instalments	Documented full amount under the offered schedule.
Payment dates	Initial and later payments, with amounts.
Review trigger	Changes requiring a fresh assessment.

Combined package: record its total once. Do not add the included sections again.

Separate policies: total the expenditure on the chosen payment basis for each policy. Note the period each offer covers.

Payment dates: record the actual amounts due within your budget period. A new annual policy commitment can extend beyond that period, so keep its full total and the current period’s payments separate.

Keep potential excesses separate as described in the cost-review section above.