How Much Does Insurance for an LLC Actually Cost? Top 5 LLC Insurance Companies 2022

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How Much Does Insurance for an LLC Actually Cost? Top 5 LLC Insurance Companies 2022

Do you know what happens if your business doesn't have insurance? Let's be frank…nobody loves paying for insurance since you often don't end up using it — but it's something you don't want to be without if an unfortunate situation arises.

Setting up a new business requires you to be diligent about specific things like filing the right paperwork with the right people and perhaps obtaining permits or licenses, but obtaining insurance for LLC operations is right up there on the list.

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What Is Business Insurance for LLC?

Business insurance for an LLC provides protection from liability claims such as property damage or bodily injury that are caused by your business, your employees or even the products you sell (if you sell products).

If you have employees, most states require that you pay into workers' compensation insurance, which is a form of business insurance that protects your company from being financially liable for accidents your employees may have while on the job. If you've ever claimed "workers' comp," then you may be familiar with this insurance and how it works. LLCs pay premiums for their employees to maintain coverage in the event that an incident occurs, but this isn't automatic when you form an LLC. It's also not the only type of business insurance you may need.

common types of business insurance

"What about side hustles?" you might be asking. Great question! To determine whether your side hustle needs business insurance, you'll need to determine whether you operate it as a hobby or as a way to make a profit. If you're doing it solely to make money, you should consider protecting it with business insurance and perhaps even transition from a sole proprietorship to an LLC to access the myriad of other benefits that incorporation provides.

How Much Does Insurance for LLCs Cost?

Most companies that provide insurance for LLCs don't list prices publically and instead require you to submit your information to receive a detailed price quote. Naturally, this can make it difficult to get an idea of what your premiums might look like for the various insurance options — so we've made it easy!

According to Insureon, here are the average costs of small business insurance:

  • General liability, $65/month
  • Business owner's policy, $99/month
  • Professional liability, $97/month
  • Worker's compensation, $111/month
  • Commercial umbrella, $129/month

Top 5 Insurance Companies for LLCs

State Farm

Started in 1922, State Farm is currently rated as the best overall insurance provider for small businesses due to its extensive knowledge, top-tier customer service and customizable insurance products.
Coverage Limits
Increments of $1,000,000
Cost
Not listed
Add Ons
Commercial auto, workers’ compensation and surety and fidelity bonds

Hiscox

Started in 1901, Hiscox has expanded to do business in 14 countries and 50 states (including DC but not Alaska). They specialize in offering tailored options with fast quotes and claims processes.
Coverage Limits
Up to $2,000,000
Cost
From approx. $350 per year
Add Ons
Professional liability, cyber security, short-term liability, medical malpractice and more

Nationwide

Founded in 1925, Nationwide boasts 14 different industry specialties and has been granted an A++ Superior rating from AM Best for its financial stability. They are highly rated for general liability insurance products.
Coverage Limits
Not listed
Cost
Not listed
Add Ons
Umbrella insurance, personal liability, commercial property, commercial auto and more

The Hartford

Founded in 1810, The Hartford is rated the best and second largest provider of worker's compensation coverage.
Coverage Limits
Up to $2,000,000
Cost
An average of $1,057/year
Add Ons
Business property insurance, data breach, professional liability and more

Travelers

Started in 1853, Travelers boasts more than 25 industry specializations and offers a full suite of insurance products for businesses of varying sizes. They have created a strong name in the commercial property insurance space.
Coverage Limits
Up to $5,000,000
Cost
Not listed
Add Ons
Commercial auto & trucking, cyber security, surety bonds, small business owners' policy and more

Tips from the Experts: How to Shop for Business Insurance for LLC

If you need business insurance for LLC protection, you might be wondering what to look for. Are all companies the same? What about the different coverages? Here's what the experts say to look for when doing your initial research:

1. Understand Your Options (And the Various Types Available)

General liability insurance is the main type of business insurance, and it covers lawsuits that result from third-party injuries, property damage, defamation and copyright infringement. Other types of insurance for LLCs include commercial property insurance (covers lost, stolen or damaged property), business interruption insurance (covers operating costs if you are forced to halt operations due to weather or other similar events), professional liability insurance (covers accidental mistakes or omissions by professional service providers) and many others that may be relevant depending on the type of business you operate.

2. Be Aware of Your Legal Obligations

In many cases, your business activities may dictate whether you need specific insurance in order to meet legal requirements. If you rent office space, the building owner may require you to hold a valid general liability policy to cover any potential claims. As mentioned above, if your business has employees, you'll need to have worker's compensation coverage. Be sure to check requirements in your state when conducting research for your business.

3. Always Work with Reputable, Highly Rated Providers

Business insurance for LLCs is one area where you don't want to skimp to save on cost. Consider your deductible amounts, the risk associated with your business activities and always overestimate your needs. Reputable providers will be happy to work with you to determine what these needs are, and in this case, you definitely get what you pay for. In the event that an incident occurs, you'll be happy you went with the best of the best!

Choosing the Right Provider for Your Business Needs

Choosing an insurance company is often a gut feeling — if you've considered your options, been honest about your risk and coverage needs, and are willing to pay for reputation and ease of filing claims, it's likely that you can narrow your search to one or two providers. Go with the one that checks off all of your boxes, and feel confident in knowing that your business is protected in case of a negative event. Oh, and be sure to notify your insurance company if you make any significant or pertinent changes to your business, or you might not have proper protection!

If you haven't yet incorporated your business and are looking at insurance as a sole proprietor, now may be the time to form an LLC with Incfile. It's fast and simple, and you can get started today with a $0 LLC (state fees apply).

40% of Small Businesses Are Still Uninsured. If You Are Among Them, Protect Your Business Today with CoverWallet.

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