How Much Does LLC Insurance Cost in 2025?

Forming an LLC, unfortunately, is not all the protection your business needs. 

Sure, an LLC helps shield your personal assets, but what happens when a client sues you, an employee gets hurt, or a pipe bursts in your office? That’s where LLC insurance comes in, and skipping it could cost you a whole lot more than a monthly premium.

So let’s get straight to the point: LLC insurance cost can typically run you between $500 and $3,000 per year in 2025. But like most things in business, the final number depends on what you do, how big your operation is, and what kind of risks you’re exposed to.

In this guide, we’ll break down the real cost of LLC insurance, the coverage options worth considering, and how to get solid protection without overpaying.

What Is LLC Insurance (And Do You Really Need It)?

Let’s clear something up: Forming an LLC doesn’t automatically protect your business from lawsuits, accidents, or property damage.

An LLC mainly protects your personal assets, like your house or savings, if your business gets sued. But what protects the business itself? That’s where LLC insurance steps in.

LLC insurance refers to business insurance policies designed to protect your company from financial losses due to accidents, mistakes, injuries, or lawsuits.

And if you’re thinking, “I work from home, I probably don’t need it”—think again. Even home-based businesses face risks: a client could trip during a meeting, or someone could claim your work caused financial harm.

So, How Much Does LLC Insurance Cost in 2025?

Here’s a breakdown of average LLC insurance costs by policy type this year:

Insurance Type	Average Annual Cost	What It Covers
General Liability	$500 – $1,200	Third-party injury, property damage, legal defense
Professional Liability	$600 – $2,000	Claims of errors, omissions, or bad advice
Commercial Property	$800 – $2,500	Business equipment, inventory, and building damage
Business Owner’s Policy (BOP)	$1,200 – $3,000	A package of general liability + property coverage
Workers’ Compensation	Varies by state	Medical bills and lost wages for injured employees

Keep in mind, these are just averages. A graphic designer working from a laptop at home will pay far less than a roofing company with a dozen employees.

What Affects Your LLC Insurance Cost?

Your premium isn’t pulled out of thin air; insurance companies look at several factors before quoting you a price:

1. Your Industry

Some businesses are just riskier than others. A cleaning company faces more physical risk than an online coach.

2. Your Location

States have different rules and claim histories. Cities tend to cost more than rural areas. Expect higher rates in high-risk weather zones or litigious states.

3. Your Business Size

More revenue? More employees? Bigger risks. That usually means higher premiums.

4. Your Claims History

A clean record = lower costs. Past lawsuits or insurance claims = expect a higher rate.

5. Your Coverage Limits

The more you want your policy to cover, the more it’ll cost. High limits and low deductibles mean higher premiums.

What Kind of Insurance Does an LLC Actually Need?

At a minimum, most LLCs should start with general liability insurance. It’s your basic “oops” coverage, like if someone slips on your property or you accidentally damage a client’s stuff.

But depending on what you do, you might also need:

• Professional Liability (Errors & Omissions): Ideal for consultants, coaches, designers, etc.
• Commercial Property Insurance: For anyone with inventory, tools, or physical equipment.
• Workers’ Comp: Required in most states if you have employees.
• Cyber Liability: If you store sensitive customer data or sell online.

The good news? You can bundle some of these policies into a single Business Owner’s Policy (BOP) and save money.

Is LLC Insurance Legally Required?

Not always, but it’s often required indirectly.

• Leasing a space? Your landlord will probably demand it.
• Landing a big client? They may require a certificate of insurance before signing a contract.
• Hiring employees? Most states require workers’ comp.

And even when it’s not required, going without coverage could be financially devastating. One lawsuit could sink your business.

How to Get Affordable LLC Insurance (Without Cutting Corners)

Here’s how to save money and get the coverage you need:

1. Compare Quotes

Shop around. Providers like Hiscox, NEXT, and The Hartford make it easy to get free quotes online.

2. Bundle Coverage

If you need more than one type of insurance, get a Business Owner’s Policy. It’s cheaper than buying each policy on its own.

3. Raise Your Deductible

Higher deductibles = lower monthly premiums. Just make sure you can afford it if you ever need to file a claim.

4. Stay Claim-Free

Avoiding claims is the best way to keep costs low long-term. Invest in safety procedures and solid contracts.

Bottom Line: What You Should Expect to Pay

Here’s what it boils down to:

• Low-risk, solo businesses: around $500–$1,000/year
• Moderate-risk businesses: between $1,200–$2,000/year
• High-risk industries with employees or property: upwards of $2,500–$3,000+/year

Yes, it’s an extra cost, but it’s also a business-saving shield when things go wrong. The smart move? Don’t wait until something happens. Protect your business as soon as possible.

FAQs: LLC Insurance Cost in 2025