Commercial Insurance Cost in 2026: Complete Benchmarks by Industry
How much does commercial insurance cost? For a typical small business with 1–5 employees, expect to pay between $2,500 and $8,000 per year across general liability, commercial property, and workers' compensation. But that range hides enormous variation — a consultancy in North Dakota pays $2,500, while a roofing company in Hawaii pays $40,000+ for the same number of employees. This guide breaks down exactly what drives the number, with 2026 benchmarks for 40+ industries.
The short answer: what commercial insurance costs in 2026
For a small business with 1–5 employees, under $1M in revenue, and a low-to-medium risk profile, here's what you should expect to pay annually in 2026:
| Coverage | Low | High | Typical |
|---|---|---|---|
| General Liability ($1M/$2M) | $500 | $1,500 | $850 |
| Commercial Property | $500 | $3,000 | $1,200 |
| Workers' Comp | $400 | $15,000+ | $2,000 |
| BOP (GL + Property bundle) | $600 | $2,500 | $1,400 |
| Professional Liability ($1M) | $400 | $1,500 | $700 |
| Cyber Liability ($1M) | $500 | $3,000 | $1,200 |
| Commercial Auto (per vehicle) | $3,300 | $8,000 | $4,800 |
| Umbrella ($1M) | $200 | $800 | $450 |
The three coverage types that most small businesses buy — GL, property, and workers' comp — total anywhere from $1,400 to $20,000 per year depending on industry, state, and payroll. The rest of this guide explains exactly which variables push you toward the low end or the high end.
Confused about what goes inside a BOP and whether your business qualifies? See our complete Business Owner's Policy guide.
Cost by industry: 40+ business types benchmarked
Industry class code is the single largest driver of commercial insurance cost. A roofing contractor and a software consultant with identical revenue, payroll, and state pay wildly different premiums — because their underlying risk of causing harm is fundamentally different. Here are 2026 benchmarks by industry, based on published carrier rates and Calccover's analysis of 50-state data.
| Industry | GL ($1M/$2M) | Workers' Comp (per $100 payroll) | Property (typical) |
|---|---|---|---|
| Software / IT consulting | $500–$900 | $0.30–$0.80 | $500–$1,500 |
| Marketing / advertising | $500–$900 | $0.30–$0.70 | $500–$1,500 |
| Accounting / bookkeeping | $600–$1,200 | $0.40–$0.90 | $700–$2,000 |
| Real estate agent (E&O) | $500–$1,000 | $0.50–$1.00 | $400–$1,000 |
| Retail store | $600–$1,500 | $0.60–$1.20 | $1,000–$4,000 |
| Restaurant (fast casual) | $1,200–$3,500 | $1.50–$3.50 | $2,000–$8,000 |
| Restaurant (full service + bar) | $2,500–$6,500 | $2.00–$4.50 | $4,000–$12,000 |
| Salon / barbershop | $700–$1,800 | $0.80–$1.80 | $1,500–$5,000 |
| Personal trainer / gym | $1,000–$2,500 | $0.90–$2.00 | $1,000–$4,000 |
| Daycare / childcare | $2,000–$5,500 | $1.20–$2.50 | $1,500–$6,000 |
| Medical office | $1,500–$3,500 | $0.50–$1.20 | $5,000–$20,000 |
| Dental office | $1,200–$3,000 | $0.40–$1.00 | $5,000–$20,000 |
| Plumber | $2,500–$6,000 | $1.80–$3.50 | $2,000–$6,000 |
| Electrician | $2,000–$5,500 | $1.50–$3.20 | $1,500–$5,000 |
| HVAC contractor | $2,500–$6,500 | $2.00–$4.00 | $2,000–$6,000 |
| Roofing contractor | $4,500–$12,000 | $5.00–$12.00 | $2,000–$6,000 |
| General contractor | $5,000–$15,000 | $4.50–$10.00 | $2,500–$8,000 |
| Landscaping | $2,000–$5,000 | $2.00–$4.50 | $1,500–$5,000 |
| Cleaning business | $1,000–$2,500 | $1.80–$3.50 | $700–$2,500 |
| Trucking (per truck) | — | $3.00–$8.00 | $1,500–$4,000 |
| Owner-operator (semi) | — | $3.50–$9.00 | — |
| Farm / agricultural | $1,500–$4,500 | $2.50–$6.00 | $3,000–$15,000 |
| Nonprofit (small) | $700–$1,800 | $0.60–$1.30 | $1,500–$5,000 |
For specific contractor estimates by trade — plumbing, electrical, roofing, HVAC, and more — use our free contractor insurance calculator. For a full breakdown, see our contractor insurance guide.
Not seeing your industry? We have a calculator for it. Jump to the full calculator list →
What drives the cost: 7 factors
1. Industry class code (biggest single factor)
Every business is assigned an NCCI class code that reflects its actual work. Class code is the base rate every carrier starts from. The spread is enormous: a clerical class code runs $0.30–$0.80 per $100 of payroll, while roofing runs $5.00–$12.00. Misclassification is the single most common reason small businesses overpay — sometimes by 30–50%.
2. State (40–60% swing)
The same coverage costs 40–60% more in the Northeast than in the Mountain West. Our 50-state analysis found workers' comp alone ranges from $0.50 per $100 of payroll in North Dakota to $2.52 in Hawaii. The variation is driven by statutory benefit levels, litigation climate, and whether the state operates a workers' comp monopoly.
3. Revenue and payroll (linear driver)
Most commercial policies scale with revenue and payroll. A business with $500K in payroll pays roughly 2x the workers' comp premium of a business with $250K in payroll in the same class code and state. Property insurance scales with insured value. GL scales more loosely but still responds to revenue.
4. Claims history / Ex-Mod (2x swing)
Your experience modification factor (Ex-Mod) is a multiplier based on your claims history over the past 3 years. A 0.85 Ex-Mod is a 15% credit. A 1.40 Ex-Mod is a 40% debit. A single serious workers' comp claim can raise your Ex-Mod for three years — turning a $5,000 annual premium into $7,000+ for the full period.
5. Coverage limits and deductibles
Going from $1M/$2M to $2M/$4M on general liability typically raises the premium 20–35%. Going from a $1,000 to a $2,500 deductible on GL cuts the premium 10–15%. Both levers are worth understanding before you buy.
6. Vehicle count and type (commercial auto)
Commercial auto is priced per vehicle per year, with wide spreads by vehicle type: a sedan used for consulting runs $1,800–$2,800 per year, while a semi-truck runs $12,000–$18,000 per year. Fleets of 5+ vehicles often qualify for fleet rating, which can cut per-vehicle cost 10–20%.
7. Carrier and market cycle
Identical coverage varies 20–30% between carriers in the same state. On top of that, the insurance market has hard and soft cycles. Since 2022, commercial insurance rates have increased 4–8% per year nationally on average, driven by inflation in repair costs, litigation trends, and reinsurance pricing.
How to lower your commercial insurance cost
Six legitimate levers, ranked by impact:
1. Verify your NCCI class code
Ask your broker to confirm your class code in writing. Misclassification is common and expensive. A plumber misclassified as a general contractor can pay 40% more than necessary. A marketing consultant misclassified as a "business services" catch-all can pay 30% more than their actual professional services class code requires.
Potential savings: 10–40%
2. Shop 3+ carriers every year
Rates for identical coverage vary 20–30% between carriers. Renewal loyalty is expensive. Set a calendar reminder 60 days before renewal to get at least 3 competitive quotes.
Potential savings: 15–30%
3. Raise your deductibles
Moving from a $500 to a $2,500 deductible on property and GL typically reduces annual premium 10–15%. If you can absorb the higher deductible in the event of a claim, this is one of the cleanest ways to reduce cost.
Potential savings: 10–15%
4. Bundle into a BOP
If you qualify for a Business Owner's Policy, bundling GL and property typically saves 10–25% versus buying them separately. Most BOPs also include business income coverage automatically.
Potential savings: 10–25%
5. Improve your claims history
Every claim you file affects your Ex-Mod for 3 years. Paying small claims out of pocket (when the amount is under 2–3% of premium) is often cheaper than the resulting premium increase. Implement safety protocols that reduce the frequency and severity of claims.
Potential savings: 10–40% (compounds over 3 years)
6. Pay annually instead of monthly
Installment fees run 3–8% of annual premium. If you have the cash flow, paying annually eliminates those fees.
Potential savings: 3–8%
How commercial insurance cost varies by state
Geography is the second-largest cost driver after class code. Here's how the same business — 5 employees, $250K payroll, clerical class code, clean claims — prices out across major states:
| State | GL + Property + WC (est.) | Index vs. National Avg |
|---|---|---|
| North Dakota | $2,200 | 0.55x |
| Utah | $2,800 | 0.70x |
| Ohio | $3,200 | 0.80x |
| Texas | $4,500 | 1.12x |
| Florida | $5,200 | 1.30x |
| California | $6,800 | 1.70x |
| New York | $7,500 | 1.87x |
| Hawaii | $8,400 | 2.10x |
The same 5-employee business pays nearly 4x more in Hawaii than North Dakota. For a fuller state-by-state breakdown with all 50 states, see our 50-state commercial insurance cost analysis.
Calculate your exact cost by industry
State benchmarks and industry averages are starting points. To see where your actual costs should land — with your revenue, payroll, employees, state, and coverage limits — use one of our 40+ free calculators:
Core business coverages
Trucking & transportation
Contractors & trades
Retail, restaurant & hospitality
Professional services
Medical & healthcare
Specialty
Frequently asked questions
How much does commercial insurance cost per month?
Short answer: For a typical small business with 1–5 employees, commercial insurance runs $200–$700 per month total across GL, property, and workers' comp. A one-person LLC with no employees and a low-risk industry can pay as little as $40–$80 per month for general liability alone.
A construction company with 10 employees and multiple vehicles can pay $2,000–$5,000 per month.
What is the cheapest commercial insurance for a small business?
Short answer: A standalone general liability policy is the cheapest commercial coverage for most small businesses, averaging $40–$80 per month for a $1M/$2M limit in a low-risk industry. A BOP (Business Owner's Policy) bundling GL and property typically runs $60–$200 per month.
Workers' comp is the most expensive line for businesses with employees, averaging $0.50–$2.52 per $100 of payroll.
Why is commercial insurance so expensive?
Three factors drive most premium costs: (1) your industry class code — construction, trucking, and healthcare pay 2–5x more than offices and retail; (2) your state — the same coverage costs 40–60% more in the Northeast than in the Mountain West; (3) your claims history — a single serious claim can raise premiums 20–45% for three years.
Does commercial insurance cost more in certain states?
Yes. Workers' comp rates alone range from $0.50 per $100 of payroll in North Dakota to $2.52 in Hawaii — a 5x spread. General liability varies 3–4x across states. New York is the most expensive state overall, ranking top 5 in workers' comp, general liability, and commercial auto.
Can I negotiate commercial insurance premiums?
Not directly with the carrier, but you can lower your premium through these levers: increasing deductibles (10–15% savings), paying annually instead of monthly (3–5% savings), bundling policies into a BOP (10–25% savings), improving your claims history, and shopping 3+ carriers (20–30% rate variance between carriers for identical coverage).
How much is workers' comp insurance for 5 employees?
A business with 5 employees and $250,000 in annual payroll pays $1,250 in North Dakota at $0.50 per $100, or $6,300 in Hawaii at $2.52 per $100 for a clerical class code. Rates climb sharply for high-risk class codes: a roofing contractor with the same payroll pays $12,500–$25,000 depending on the state.
Do I need to pay the full annual premium upfront?
No. Most carriers offer monthly payment plans with 10–25% down and 9–11 monthly installments. The installment fee is typically 3–8% of the annual premium, which is worth paying to preserve cash flow for most small businesses. Some carriers offer 12-pay with no interest for qualified businesses.
Why did my commercial insurance premium go up this year?
Short answer: Common reasons: (1) your revenue or payroll grew, increasing exposure; (2) your industry filed rate increases with the state; (3) your experience modification factor rose after a claim; (4) the carrier tightened underwriting in your state; (5) inflation raised the cost to repair or replace insured property.
On average, commercial insurance premiums have increased 4–8% per year nationally since 2022.
How do I know if I'm overpaying for commercial insurance?
Three tests: (1) compare your rate against state benchmarks in this article — if you're 20%+ above the average for your industry and state, you're likely overpaying; (2) get 3+ quotes from competing carriers (rates for identical coverage vary 20–30%); (3) verify your NCCI class code — misclassification is the single most common reason small businesses overpay, sometimes by 30–50%.
Does commercial insurance cost less if I work from home?
Yes, but not as much as you might expect. A home-based business insurance policy bundling GL and limited business property typically runs $400–$1,200 per year, compared to $600–$2,500 for a BOP with a commercial location. The savings come mostly from lower property values (no commercial building) and reduced foot traffic (fewer visitor injuries).