How much does an insurance policy cost a company?

Key Points

1 The price of business insurance depends on the type of activity, the size of the business and the level of risk.

2 There are different key types of insurance for businesses, some mandatory and others advisable, depending on each case.

3 The cover taken out and the sums insured directly influence the final cost of the policy.

4 Proper risk assessment helps adjust the price without losing protection.

5 Specialist advice makes it possible to choose the right insurance and avoid unnecessary extra costs.

In their day-to-day activities, all companies have to deal with risks of different types. In view of this situation, one of the main instruments available to organisations to limit the impact of theft, fire, accident or any other type of unexpected incident is to have a business insurance policy.

Many business owners and managers therefore want to know: How much does an insurance policy cost a company? Although the issue is complex and there are numerous possible answers, we at RibéSalat will give you some guidelines.

The price of insurance policy for companies depends on many factors

The first thing we have to consider when calculating the annual budget we must allocate to insuring a company is that we are almost certainly going to have to take out more than one insurance policy, as there are different types in the market, and for many activities some of them are compulsory.

Civil Liability Insurance

Although Civil Liability Insurance is compulsory for many companies, depending on their activity, it is highly advisable for all companies and self-employed workers, as it protects them against claims for compensation from employees and third parties related to their activity.

The premium for this type of insurance is highly variable, depending basically on the following factors:

The type of civil liability insurance policy and cover included.
The capital covered, which we refer to as the sum insured and is the maximum amount for which the insurer would cover compensation.
The type of business or professional activity.
The number of employees.
The turnover of the business.

Average price

According to data published by BBVA, the average premium for civil liability insurance is between €500 and €600, although in large companies or those with a high risk, it can easily exceed €1,000.

Plus, the more workers the company has and the higher its turnover, the more expensive the insurance will be.

Multi-risk insurance

Multi-risk policies cover a wide range of damage, accidents and incidents that affect companies and businesses in general relatively frequently: theft, fire, machinery breakdowns, flooding, storm damage and other weather conditions, etc.

In addition to Civil Liability Insurance, many companies take out a multi-risk policy, because it offers good cover for the most common incidents.

Average price

Prices are highly variable, the most influential parameters being the building materials used, measures to prevent fire and theft, the activity in which the company is engaged, the nature of goods stored indoors, the premises, and their contents (furniture, machinery and other items covered).

The premium is thus determined in each case according to the nature, size and value of the elements to be insured. A small business or company can take out a multi-risk insurance policy for approximately €400.

Cyber risk insurance policy

Cyber risk insurance is another type of policy currently in great demand by companies so that they can protect themselves from attacks using viruses, malware and other methods, which have become increasingly common.

The losses caused by a cyberattack can be very serious, affecting various areas of the company: loss of confidence and credibility, claims for data theft, fines and administrative sanctions, direct economic damage due to the company’s inability to operate with certain systems and applications, its website and online store, etc.

Average price

Everything depends on the size and activity of the company and the risks, cover and services they wish to contract. Some insurers include preventive measures and safety audits that increase the cost of the policy. Generally speaking, you can take out this type of insurance from €350 for a basic policy.

Other policies

In addition to the above policies, most companies, including SMEs and many small businesses, need to take out complementary insurance, such as:

Accident insurance for employees. This will cost approximately €800 for a company with around 10 workers.
Vehicle Insurance: Between €300 and €1,000 per insured vehicle, depending on whether the policy is third-party or comprehensive, with or without excess.

Factors that increase or reduce the cost of a business insurance policy

Insurers assess the company’s actual level of risk and translate it into a premium. For this reason, two companies of the same size can pay very different amounts.

1) Type of activity and level of business risk

Insuring an office does not cost the same as insuring a workshop, an installation company, premises open to the public or an activity involving the handling of machinery, products or substances. The higher the probability of a claim or the potential severity of damage, the higher the premium usually is.

2) Turnover, volume of operations and type of clients

The higher the level of activity, the greater the exposure to claims, incidents and losses. In public liability insurance, turnover and the type of activity carried out (services, manufacturing, distribution) are particularly influential.

3) Number of employees and third-party exposure

A larger workforce implies a higher risk of workplace accidents and, in many policies, greater exposure to claims related to the activity. If there is customer-facing activity, frequent visits or regular subcontracting, the risk also increases.

4) Insured sums and declared values

In multi-risk insurance, the premium depends largely on:

Building: value of the property or the insurable portion (depending on ownership and use).
Contents: furniture, machinery, equipment, stock, goods.
The higher the insured value, the higher the premium. Inaccurate declarations can lead to underinsurance or overinsurance, affecting both price and quality of the cover.

5) Location, characteristics of the premises and security measures

Relevant factors include the area, access points, building height, neighbouring properties, history of thefts, as well as fire and theft protection measures such as alarms, access control, security doors, detection and extinguishing systems. In general, better measures and sound risk management help to moderate the cost.

6) Claims history and risk management

Recent or repeated claims can lead to higher premiums. Insurers also value the existence of prevention, maintenance, training and control protocols, as these reduce the likelihood of incidents.

7) Excess, limits and payment method

Higher excess: usually reduces the premium, as the business assumes a greater share of each claim.
Higher limits or sums insured: usually increase the premium.
Annual payment vs instalments: annual payment is generally cheaper than paying in instalments.

8) Territorial scope and extent of coverage

Operating in more territories, working on sites, travelling frequently, providing services at third-party premises or covering specific projects can increase the cost of a business insurance policy because the risk landscape changes.

Coverages that usually make the biggest difference to the price

When comparing policies, much of the price difference comes down to specific coverages, limits and conditions. These are the ones that tend to have the greatest impact.

1) Indemnity limits and sub-limits

Increasing the insured capital or liability limit raises the premium. Sub-limits also matter, for example for theft, electronic equipment or aesthetic damage: a policy may appear similar but have much lower sub-limits.

2) Extended civil liability

In civil liability, the following usually make it especially expensive:

Employer’s liability (claims for personal injury arising from employment).
Product and post-completion liability (if you manufacture, distribute or install).
Professional liability (if you provide technical or advisory services).
Legal defence and bonds with high limits.

3) Loss of profits or business interruption

It is one of the coverages that adds the most value and can also influence the premium, as it covers loss of income and fixed costs following a claim (fire, flooding or others depending on the policy). Its cost depends on the margin, turnover and the indemnity period taken out.

4) Electrical damage and machinery breakdown

In businesses with key equipment (machinery, industrial refrigeration, servers, production systems), the price of business insurance policy usually increases, but this cover is decisive if an electrical failure or breakdown brings operations to a halt.

5) Theft with enhanced conditions

Theft is not assessed in the same way across all sectors. The premium varies depending on:

Type of goods (value, ease of resale).
Presence of safes, alarms, locks, CCTV.
Limits for cash on premises, special items or shoplifting.
The broader and less restrictive the theft cover, the higher the cost tends to be.

6) Electronic equipment and data

Computers, POS systems, design equipment, servers and critical systems increase the price when insured with high limits, replacement as new, rapid assistance or cover outside the premises.

7) Cyber insurance coverage: response and services

In cyber risk insurance, the following have a significant impact:

Incident response (forensics, containment, recovery).
Crisis management and communications.
Data liability and legal expenses.
Extortion/ransomware (if included and with what limits).
Preventive services (audits, training, tools).

8) Assistance, response times, and additional services

24/7 assistance, repair networks, fast loss adjustment or support services can increase the cost, but they are often critical when a claim occurs and the business needs to resume operations as quickly as possible.

A good insurance policy starts with professional advice

Taking out a business insurance policy is a very important matter for any organisation to feel supported and protected against potential damage and risks. Given the wide range of insurance types, insurers and price differences, at RibéSalat we support you by providing the advice you need so you can protect your business.

We assess your company’s characteristics, its activity, the real level of risk and specific coverage needs in order to propose the most suitable insurance solutions, optimise costs and ensure protection that is consistent with the reality of your business.

FAQs

What insurance does a company starting from scratch need?

A company starting its activity should, at a minimum, have public liability insurance tailored to its sector, as it protects against third-party claims from day one. From there, needs depend on the type of activity, whether it has premises, employees or physical assets, and the risk associated with its operations. Starting with proportionate, scalable protection makes it possible to grow without taking on unnecessary costs.

Can business insurance be changed before the policy expires?

Yes, it is possible to change insurance before expiry, although this must be done in line with the notice periods set out in the contract, which are usually one month. In some cases, early cancellation may involve penalties or the loss of premiums already paid. For this reason, it is advisable to review the policy conditions and plan the change in advance.

What happens if a company grows and does not update its insurance?

When a company increases its turnover, workforce or asset volume and does not review its insurance, it runs the risk of being inadequately protected. This can result in insufficient sums insured, outdated cover or significant exclusions in the event of a claim. In the long term, this lack of updating can lead to a significant financial impact if an incident occurs.

Do a self-employed professional and an SME pay the same for similar insurance?

Not necessarily. Although they may take out similar policies, the price usually varies depending on the volume of activity, turnover, number of employees and level of risk. A self-employed professional with limited activity will usually pay less than an SME with greater structure, clients and exposure, even if the cover appears similar.

What differences are there between taking out insurance directly or through a brokerage?

Taking out insurance directly with an insurer means choosing from the options of a single company, whereas a brokerage analyses the market and compares different policies to find the most suitable one. In addition, the brokerage acts as an adviser and intermediary, both at the time of placement and in claims management, which provides a broader perspective and closer ongoing support.

How does a claim affect the price of insurance in subsequent years?

The occurrence of one or more claims can influence the renewal premium, especially if they are frequent or of a high value. Insurers assess claims history to adjust the level of risk, which may result in price increases, changes to terms and conditions or higher excesses. Proper risk management and prevention help to minimise this impact.