Business Insurance Costs for Startups: How Much Is It? (2021)

Business Insurance cost for startup, featured image, illustration.

If you’re a startup founder, perhaps researching different insurance policies isn’t at the top of your list as you are bootstrapping your company and try to grow your client base. If you’ve tried to look into it at all, you probably would’ve struggled to find accurate estimates for business insurance costs for startups.

Most insurance-related content available online is either directly posted by insurance companies or sponsored by them. It’s pretty much like finding honest reviews for web hosting providers. Thus, it can be hard to find an unbiased breakdown of policies and costs. Insurance is a sales-heavy industry, and they would instead get your contact information than give you those details without speaking with you.

We’ve decided to put together a comprehensive price guide. In it, we’ll cover all the types of insurance your business might need.

This post has got you covered from basic policies like general liability insurance to more complicated ones like cyber liability insurance.

How Much Does Insurance Cost For a Startup?

Policies relevant to startups can cost from as little as $500 to tens of thousands of dollars per year. You might be thinking that’s not a very helpful estimate… and you wouldn’t be wrong.

For most startups, insurance is very unlikely to break the bank. For instance, Buffer is a startup that’s uniquely open about its finances; back in 2018, they shared their entire year’s budget. Business insurance was notably a relatively minor expense—only included as a part of the 0.6% spent on their offices. Health insurance and workers’ compensation are included in the teammate benefits. These benefits make up 4.6% of their operating costs.

Buffer’s 2018 Operating Costs.

In their 2016 budget, health insurance/workers’ comp insurance amounted to 1.9% of monthly expenses or about 2.9% of total payroll, at $6,635 per month.

At Kinsta, our entire business insurance stack costs roughly $30,000 per year.

But insurance is a long way from offering SaaS subscriptions, so it’s impossible to give a one-size-fits-all answer based on one company’s experience. You might pay a higher or lower percentage of payrolls depending on your company’s size, industry, and situation.

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What Kind of Insurance Do You Need For a Small-Scale Business?

Types of Business Insurance.

Types of Business Insurance. (Source)

The majority of small business incidents are covered by professional liability, workers’ comp, and general liability insurance. Does that mean your startup needs all three?

There is no end-all-be-all correct answer here. As startups and SMBs

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This article was written by Matteo Duò and originally published on Blog – Kinsta.

Disclosure: Some of the links in this post are "affiliate links." This means if you click on the link and purchase the product, We may receive an affiliate commission.

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