Commercial Property Insurance Cost

How much does commercial property insurance cost?

In 2023, new Progressive customers paid a median price of $63 per month for a business owners policy (BOP), which includes commercial property coverage.

The cost of commercial property insurance depends on your business's specific needs and risks. Our in-house specialists will use this information to customize a policy and find ways to save on your business property insurance cost.

Small business property insurance cost factors

Your business's overall risk affects your commercial property insurance rate. Insurance companies calculate your premium using the following factors:


Your business location impacts average commercial property insurance cost in various ways. Areas with high crime rates or severe weather generally have more expensive premiums because of the increased likelihood of claims. Additionally, working in a city with a high cost of living can affect your rate because repairs can cost more.

Building construction and age

The type of materials used in a building's construction and its age can affect how much you pay for insurance. Properties that are newer, built with fire-resistant materials, or recently updated are typically cheaper to insure because they are less prone to damage. Their compliance with current regulations reduces the chance of claims and presents a lower risk to insurers.

Property value

The value of your building and its contents affects your commercial property insurance cost. Insurers consider things like your square footage, inventory, tools and equipment, computers, furniture, and more. Larger spaces or premises with high-value or hazardous equipment typically pay more for coverage because of more expensive replacement costs.


Your business type and customer traffic can affect your commercial property insurance rate. For example, businesses like retail shops and restaurants often have higher premiums. This is because serving customers in person increases your exposure to injuries, accidents, and property damage.

If your space is part of a larger complex, the insurer will also consider the other tenants' use and how it might impact risk.

Coverage needs

The specific coverages you choose affect your business property insurance rates. For example, if you live in an area prone to earthquakes, you might want to carry additional insurance, which can cost more.

Depending on your operations, you could also opt for extra protection for tools and equipment or equipment breakdown. In general, the more covered events your policy includes, the more you can expect to pay.

Claims history

Insurance companies consider your business's claims history to understand how often and why claims have been made in the past. They use this information to gauge the possibility of a future claim, which influences the cost of commercial property insurance.

How to save on commercial building insurance costs

The right strategies can help you save on your commercial property insurance. By carefully reviewing your coverage and making smart adjustments, you can cut expenses while keeping your property safe. Here are key steps to help you manage your business building insurance rate:

Increase deductibles

Choosing a higher deductible can lower your commercial property insurance premium, but you'd have a higher out-of-pocket cost in the event of a claim. Before choosing a deductible, make sure your business can cover it.

Ask about insurance discounts

Discounts are an easy way to save on your commercial property insurance rates. Your insurer, industry, location, and more can affect your eligibility. For example, carriers could offer a discount for paying your premium annually instead of monthly. Be sure to ask what discounts are available when getting a quote.

Update safety features

Installing safety features like smoke detectors, fire alarms, and other security systems helps reduce the risk of damage or loss from fire, theft, or vandalism. Be sure to share these loss prevention strategies with your insurer to demonstrate your commitment to minimizing claims.

Review your policy annually

Reviewing your insurance policy each year lets you confirm that you have the right amount of coverage, discover new discounts, and update your business information. As your company evolves, this step guarantees your property insurance is aligned with your needs at the most competitive price.

Get your customized business property insurance rate today

The best way to see how much property insurance would cost for your small business is to get a quote. One of our business insurance experts can guide you through the process, or you can start a quote online.

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