The cost of small business liability insurance primarily depends on which policies you purchase. The size of your business, the risks associated with your profession, and the policy limits you choose will also affect the cost.
Technology errors and omissions insurance (tech E&O) provides crucial liability coverage for tech businesses and independent contractors who provide expert advice or services. TechInsurance customers pay a median premium of $61 per month for tech E&O, or $728 annually.
For protection against common liability claims, most tech businesses and contractors purchase general liability insurance. The median cost of general liability insurance is $28 per month, or $340 annually, for TechInsurance customers.
The chart below shows median liability insurance costs for businesses that purchase policies with TechInsurance. The median better illustrates what you can expect to pay since the average values include high and low extremes.
See small business insurance costs for common policies:
Factors such as your policy's liability limits and your deductible affect your premium. Higher limits cost more and provide greater coverage. A higher deductible could reduce your premium but cost more in the long run.
Most IT and tech businesses and contractors (63%) choose errors and omissions policies with a $1 million per-occurrence limit and a $1 million aggregate limit. That means the policy has:
The cost of small business liability insurance also depends on the specifics of the policy. For example, an errors and omissions policy that includes cyber liability insurance will cost more since it includes coverage for data breaches.
Bigger businesses typically have larger offices, more clients, and more employees, which makes claims more likely. That's part of the reason they pay more for commercial insurance.
Your line of work and its risks also affect your premium. For example, computer repair technicians may pay more for general liability insurance because they handle other people's property and could be blamed if something breaks. IT consultants might pay more for errors and omissions insurance because they're vulnerable to client lawsuits over the quality of their advice.
Risk management. Tech companies with no previous claims on their insurance can expect to pay less for business insurance. You can avoid claims with a risk management plan for workplace safety and cybersecurity threats. That could include:
Pay your annual premium in full. When you purchase a policy, you can pay your premium in monthly or annual installments. The annual premium often costs less than the monthly payments.
Purchase a business owner’s policy. Small, low-risk technology businesses may be eligible for a business owner’s policy. A BOP bundles general liability insurance with commercial property insurance at a lower cost than purchasing the policies separately.
Balance your limits and deductible. Small tech companies don't necessarily need the same protection as larger companies. When purchasing a policy, choose limits and a deductible that are appropriate for your level of risk.