How much does designer insurance cost?

Design professionals spend an average of $36 per month, or $435 per year, for general liability insurance.

Architects, interior designers, and other building design business owners may need this coverage in order to sign a commercial lease, get licensed, or work with certain clients.

General liability insurance covers legal costs when a third party (an individual from outside of your company) files a lawsuit over a bodily injury or property damage. It also pays for advertising injuries, such as libel, slander, and copyright infringement.

For example, should a client visiting your office slip on a wet floor and injure themselves, they could file a lawsuit. A general liability policy would then help pay for your attorney's fees and other legal costs throughout the legal proceedings.

This is the average general liability insurance policy for designer businesses that buy from TechInsurance:

Premium: $36 per month
Policy limits: $1 million per occurrence; $2 million aggregate
Deductible: $500

The cost of general liability insurance depends on several factors, including the policy limits you choose. When underwriting your premium, insurance providers will also consider your profession, the size of your business, and any subcontractors or additional insured endorsements you may have.

Fortunately, small business owners don't have to pay a lot for insurance. Among design service businesses that buy with TechInsurance, 38% pay less than $30 per month for general liability insurance, and 80% pay less than $60 per month.

By choosing lower coverage limits or a higher deductible, you can reduce your premium to an amount that fits your building design company's budget. Most design business owners (90%) choose $1 million per-occurrence and $2 million aggregate limits for general liability insurance.

Small, low-risk design service businesses may be eligible for a business owner’s policy, which costs an average of $54 per month or $648 annually.

A business owner's policy bundles general liability coverage with commercial property insurance at a lower rate than buying these policies separately. It protects against the most common liability and property lawsuits and helps your business recover from fires, burglaries, windstorms, and similar incidents.

You can add business interruption insurance to a BOP to defend against the cost of a temporary shutdown tied to a covered property claim. For example, it would help pay for employee wages and the cost of renting an office while your architectural firm is closed for renovation after a fire.

The cost of a business owner's policy primarily depends on the value of your business equipment and other property. Other factors such as your business's size and location can also affect your premium.

Design businesses pay an average premium of $142 per month, or $1,700 annually, for professional liability insurance. This policy is also referred to as errors and omissions insurance, or E&O insurance.

Professional liability insurance covers legal costs related to accusations of professional negligence. For example, a project manager could face a lawsuit for failure to meet a building project deadline or causing it to go way over budget.

Below is the average professional liability policy for building design companies that buy from TechInsurance:

Insurance premium: $142 per month
Policy limits: $1 million per occurrence; $1 million aggregate

Design service businesses that rely heavily on technology, such as a control systems integration specialist, may opt for technology professional liability insurance, which bundles professional liability insurance with cyber insurance. This policy not only covers accusations of negligence, but also data breaches that affect the operations of a design service business or their client.

In the technology industry, you'll often see technology professional liability insurance referred to as technology errors and omissions insurance (or tech E&O).

The risks of your specific profession, such as engineer or building inspector, are a major factor when determining your insurance costs.

Examples of risk factors include:

• Errors or oversights
• Late or undelivered services
• Advice that causes a financial loss for your client

To some extent, you can predict how much you'll pay for insurance by looking at costs for similar businesses. On average, landscaping architects pay a lower rate of $42 per month for professional liability insurance, while land surveyors pay a higher rate of about $174 per month.

Below you can see how much different designer professionals pay for professional liability coverage:

Most building design professionals (64%) choose a professional liability insurance policy with a $1 million per-occurrence limit and a $1 million aggregate limit.

You may want to choose higher limits if:

• Clients depend on your expertise to manage a budget or increase profits
• You provide specially designed plans to your clients
• A project delay or mistake on your part will impact clients’ finances in any way

On average, design service business owners pay $46 per month for workers' compensation insurance, or $556 annually.

State laws determine when you need workers' comp. In most states, you need it as soon as you hire your first employee. Only Texas and South Dakota do not have requirements for workers' comp, but it's still recommended.

Workers' compensation pays for medical expenses and provides disability benefits if you or an employee suffers an injury on the job, or develops an occupational disease.

For example, if an engineer is measuring a blueprint and accidentally cuts their hand on a metal ruler, this policy would pay for their surgery, medical appointments, and prescriptions. It also supplies part of the income they miss out on while they're recovering and unable to work.

Most workers' compensation policies include employer's liability insurance. This type of insurance helps pays for legal defense costs related to workplace injuries.

Though sole proprietors and independent contractors aren't often required to carry workers' comp, it's still a good idea to buy this coverage. If you're injured on the job, your health insurance plan will likely deny the claim, leaving you with hefty out-of-pocket medical bills.

The chance of an on-the-job injury is the biggest factor in determining workers' compensation insurance premiums.

As you can see, 55% of design service businesses pay less than $50 per month for workers' compensation insurance. And 84% pay $100 or less per month for insurance coverage.

Insurance companies will take into account the number of employees you have, their occupational risks, and your claims history when calculating the cost of workers' comp.

Design companies spend an average of $84 per month, or $1,002 annually, for cyber insurance. Also known as cyber liability insurance or cybersecurity insurance, this policy helps pay for the cost of complying with your state's data breach laws.

A cyber insurance policy can cover expenses related to a data breach or cyberattack, including legal fees and customer notification costs. It is especially crucial for businesses that store customer information, such as credit card numbers or Social Security numbers.

The cost of cyber insurance primarily depends on the amount of sensitive information handled by your design service business.

On average, building design businesses spend $135 per month, or $1,614 per year, for commercial auto insurance.

Most states require this coverage for vehicles owned by a design service business. If you get into an accident, it can help pay for medical expenses, property repairs, and legal costs. It also covers vehicle theft and vandalism.

Keep in mind that sole proprietors and independent contractors who drive their own vehicle for work will need extra coverage as well. Your personal auto policy won't cover work-related accidents, so you'll want to consider buying hired and non-owned auto insurance (HNOA).

HNOA provides liability coverage for personal, leased, and rented vehicles driven for work purposes.

Insurance companies consider many factors when determining the cost of a commercial auto policy. That includes your employees' driving records, the number of vehicles you own and their value, and the type of business you have.