Business Insurance Costs: What Companies Your Size Actually Pay

Business insurance is one of the least transparent costs in the mid-market. Unlike payroll or benefits admin — where you can at least compare PEPM rates — insurance pricing varies wildly based on industry, location, claims history, and the broker's commission structure. Most companies have no idea whether they're getting a good deal.

We set out to change that. Over the past 12 months, we've collected insurance cost data from 180 mid-market companies across 14 industries. Here's what we found — and what it means for your renewal negotiation.

Workers' Compensation: The Biggest Variable

Workers' comp is where we saw the widest variation in pricing for similar companies. Two 150-person manufacturing companies in the same state were paying rates that differed by 340%. The cheaper company wasn't cutting corners — they had better safety programs, a cleaner claims history, and a broker who actually shopped the market every year.

If you're above the median for your industry, the first question to ask is when your broker last marketed your policy to multiple carriers. If the answer is "we renew with the same carrier each year," you're almost certainly overpaying.

The single biggest predictor of workers' comp cost isn't your industry — it's how recently your broker competitively shopped your policy.

General Liability: More Consistent, Still Negotiable

General liability insurance is more standardized than workers' comp, but there's still meaningful variation. For most mid-market companies, general liability runs between $400 and $1,500 per employee per year, depending on industry risk profile.

The biggest mistake companies make with GL is over-insuring. Your broker's incentive is to recommend higher limits because higher premiums mean higher commissions. A $2M/$4M GL policy is standard for most mid-market companies, but some brokers push $5M or even $10M limits that aren't justified by the risk profile.

Before your next renewal, ask your broker to explain why your current limits are appropriate for your specific business. If the answer is generic — "it's industry standard" — push back and ask for a risk-based justification.

Cyber Insurance: The Fastest-Growing Cost

Cyber insurance premiums have increased 60-80% over the past three years for mid-market companies, and underwriting has gotten significantly more rigorous. Carriers now require detailed questionnaires about your security posture — multi-factor authentication, endpoint protection, backup procedures, and incident response plans.

What we found in our benchmarking:

The companies getting the best cyber insurance rates share two things: they can demonstrate strong security controls (which reduces premiums 15-30%), and their broker specializes in cyber — not a generalist who treats it as an afterthought.

D&O Insurance: Often Overlooked, Frequently Overpriced

Directors and Officers (D&O) insurance protects your leadership team from personal liability. For private mid-market companies, annual premiums typically range from $2,500 to $15,000 depending on company size, industry, and revenue.

The most common overpayment scenario: companies that took on D&O during a fundraising round (because investors required it) and then auto-renewed at the original rate without renegotiating. Post-funding, your risk profile often changes, and your premium should reflect that.

Employment Practices Liability (EPLI)

EPLI covers claims from employees related to wrongful termination, discrimination, harassment, and other employment-related issues. This is one of the most underappreciated policies for growing companies — especially those rapidly hiring in multiple states.

Median annual premiums in our sample ranged from $1,800 for a 50-person company to $12,000 for a 500-person company. Companies that bundle EPLI with their D&O policy typically save 10-20% compared to buying standalone coverage.

The Broker Question

Here's what nobody in the insurance industry wants to talk about: most mid-market companies are over-brokered and under-served. Your broker earns a commission (typically 10-15% of premium) every year you renew. Their incentive is to keep you renewed, not to find you the cheapest coverage.

The best approach for mid-market companies:

• Get your broker's commission disclosed in writing. Many states require this, but brokers rarely volunteer it. Knowing the dollar amount changes the conversation.
• Require competitive marketing every 2-3 years. Your broker should be getting quotes from at least 3-4 carriers, not just renewing with the incumbent.
• Consider a fee-based broker. Instead of commission-based compensation, some brokers work on a flat fee. This removes the incentive to recommend higher premiums.
• Bundle strategically. Packaging workers' comp, GL, and EPLI with one carrier often unlocks 5-15% multi-policy discounts.

The Bottom Line

Business insurance is a significant cost that most mid-market companies manage passively. They chose a broker years ago, the broker handles renewals, and nobody questions whether the rates are competitive. Our data shows this passive approach costs the typical 200-person company $8,000-$25,000 per year in excess premiums.

The fix isn't complicated: benchmark your current costs, require competitive marketing, and hold your broker accountable for results. The data exists — you just need to use it.