Business insurance can help protect what you’re building, whether you’re just getting started or growing fast. From unexpected accidents to customer disputes, the right coverage can help keep your business moving forward—and help you meet the requirements for things like compliance, leases, contracts, and audits.
That’s why we’ve expanded Gusto’s offering to include even more business insurance lines—like General Liability, Workers’ Compensation, Commercial Property, Professional Liability, and more—available directly through Gusto, powered by NEXT Insurance.
This guide will walk you through the most common types of business insurance and how much they cost. By the end, you’ll have a clearer sense of what coverage makes sense for you—and how to get started.
This article is not intended to offer legal or financial advice. Always consult your attorney, state laws, business advisors, or an insurance agent when deciding on what type of coverage would best fit your business needs.
Common types of small business insurance
General liability insurance
Accidents happen—whether it’s a customer slipping and falling, accidental damage to a client’s property, or a product causing harm. General Liability insurance can help protect your business from these common risks by covering legal fees, medical costs, and settlements. For many small businesses, it’s the first—and most essential—policy to have in place.
Beyond financial protection, general liability coverage could help you meet requirements to lease a space, sign contracts, or work with certain clients and vendors. It also builds credibility—showing potential partners that your business is responsible, trustworthy, and prepared.
Workers’ compensation insurance
If you have employees, almost every state requires you to carry workers’ compensation insurance. But even if it’s not mandated for your business, carrying workers’ compensation coverage is a smart way to protect your team. It helps cover medical bills, lost wages, and even survivor benefits in the event of a workplace injury or illness—while also helping to protect your business from costly lawsuits and penalties.
One way to simplify workers’ comp and avoid large upfront payments is to choose a Pay As You Go billing option. Instead of estimating your annual payroll in advance, your premiums are calculated based on your actual payroll each pay period. This not only helps with cash flow management but can also make your end-of-year audit easier, since your payments are tied to real-time data rather than projections.
Commercial property insurance
If you own or rent commercial space or equipment, you may want to consider a commercial property policy. Commercial property insurance can help protect your business location and the equipment inside of it, whether that’s your products, inventory, fixtures, furniture, or other business property. This type of policy could help provide financial help if your property or equipment is damaged by water, fire, wind, vandalism, theft, or other covered risks. Always ensure that your policy extends coverage to all the property you need covered. Some policies don’t cover certain types of equipment without a special rider.
Keep in mind that commercial property insurance often excludes coverage for floods, earthquakes, and other natural disasters. If you live in an area commonly affected by these events, consider having an additional policy that covers that specific risk.
Business income coverage
Also called business interruption insurance, business income coverage can help replace your lost income when your place of business or equipment is damaged by a covered loss. If your business relies on a physical location, equipment, or other property for you to generate income, then income coverage could be a wise idea.
Business Owner’s Policy (BOP)
Looking to streamline your insurance policy? A BOP combines general liability and commercial property coverage, often at a discount.
Professional liability insurance
Depending on your profession, you may need professional liability coverage. Also called Errors and Omissions Insurance, this policy helps safeguard businesses against costs related to mistakes or accusations of professional negligence. Professional Liability coverage is generally recommended for any business that offers services or professional advice. It can help protect you from actual or alleged negligence related to your professional services. Whether or not you’re held liable for damages related to your services, this policy can help with your legal defense expenses and expenses related to judgments.
Commercial auto insurance
Personal car insurance usually won’t cover you if you get in an accident while driving for business purposes. You need a commercial auto policy for that. A commercial auto policy can provide:
Bodily injury liability protection
Property damage protection
Uninsured and underinsured motorist proportion
Medical payment coverage as outlined by state laws
If your commercial vehicle is financed, your lender may also want you to carry comprehensive and collision coverage. You may also need gap coverage if the vehicle depreciates faster than you can pay down the principal.
Employment practices liability insurance
If you have employees, it’s important that you consider adding employment practices protection to your insurance plan.
This type of insurance can help cover things such as:
Wrongful termination
Sexual harassment
Discrimination
Invasion of privacy
False imprisonment
Breach of contract
Emotional distress
Wage and hour law violations
Your employment practices coverage can help pay for legal defense and penalties. Attorney’s fees can be pricey without this coverage—and general liability policies usually exclude these events.
Data breach and cyber liability insurance
As the name implies, a data breach policy can help protect your business if hackers break into your company’s stored data. Sometimes, data breach coverage is included in an errors and omissions policy. An independent data breach policy typically offers broader protections for losses during a data breach. If your business is particularly at risk for these types of losses, you may wish to purchase higher limits of data breach protection.
Data breach coverage is often referred to interchangeably with cyber insurance, but they are not quite the same thing. Cyber liability policies can protect you from the losses directly and indirectly related to the data breach. Direct losses include the cost of notification, monitoring, investigation, and repair. Indirect losses include settlements, regulatory fines, and attorney fees.
How much does business insurance cost?
The cost of business insurance can vary based on the business, the industry or profession, and the type of policy. A small business in a less-risky sector could pay as little as a few hundred dollars a year for insurance. In contrast, a larger business in a riskier sector could pay upwards of several thousand dollars a year. Let’s take a closer look at business insurance costs.
Factors that affect the cost of business insurance
There are many factors at play when determining the cost of business insurance. One major factor is the number of policies you need to purchase. Some businesses require several policies, while a small, low-risk sole proprietorship might only need one policy.
The price for each policy will depend on several factors as well, such as:
Coverage Limits
Deductible
Business size
Industry
Location
Income
Number of employees
Claims history
Insurance company
Business insurance monthly costs
The range for monthly premium costs of business insurance can vary significantly depending on your operation. Here are some examples from NEXT Insurance, a business insurance provider that partners with Gusto:
General liability: Starting at $19/month*
Professional liability: Starting at $19/month*
Commercial property insurance: Starting at $18/month
Workers’ compensation: Starting at $14/month*
*Any starting prices or premiums represented before an actual customer quote are not guaranteed and are representations of existing premiums of active policies as of March 21, 2025. To the extent permitted by law, applicants are individually underwritten; not all applicants may qualify. Individual rates and savings vary and are subject to change. Discounts and savings are available where state laws and regulations allow, and may vary by state. Certain discounts apply to specific coverages only.
How can you save money on business insurance?
Lowering your business insurance costs may be easier than you think. Here are a few simple ways to save:
Right-size your coverage. Make sure your coverage limits match your actual risk. Choosing limits that are too high for your needs can drive up your premiums unnecessarily.
Bundle your policies. Many insurers offer discounts when you combine multiple types of coverage. For example, with NEXT Insurance, businesses that bundle two or more policies can save up to 10%.
Choose a reliable provider. A trustworthy insurance company that’s responsive to claims and customer needs can save you time, stress, and potentially money in the long run.
Ready to explore your options?
You can now access a range of business insurance lines directly through Gusto—including General Liability, Workers’ Compensation, Commercial Property, and more. Powered by NEXT Insurance, coverage is tailored to your needs and easy to manage alongside payroll and benefits.
For workers’ compensation, our integration with NEXT Insurance offers Pay As You Go billing, where premiums are based on your actual payroll each pay period. It’s a simple way to reduce upfront costs, smooth out cash flow, and take the stress out of audits.
To get started, head to Taxes & Compliance in your Gusto dashboard and click Business Insurance to view your recommendations.
