Business Insurance for Solopreneurs at $0–$100K Revenue
What coverage you actually need at each revenue tier — and what's safe to skip until you're bigger.
Most solopreneurs buy business insurance for the first time not because they decided to, but because a client contract demanded it — "please provide a certificate of general liability insurance before the engagement starts." If that's how you ended up here, good: it means you're about to buy exactly the right amount instead of guessing.
Coverage stacks as revenue and risk grow — most solopreneurs don't need everything on day one.
Tier 1: $0-$25K revenue — General liability, and probably just that
General liability (GL) covers third-party claims — a client trips in your home office, or you're accused of damaging their property or infringing a trademark in your marketing. It's the policy most client contracts and commercial leases ask for by name, and it's genuinely cheap: a solo consultant working from home typically pays somewhere in the $30-$40 a month range, with small businesses broadly landing between $40 and $100 a month depending on industry and foot traffic.
Plenty of solopreneurs skip GL until a client specifically requires it — which is usually fine at this stage. The exception is anyone meeting clients in person (photographers, personal trainers, home-visit consultants), where the liability exposure is real from day one.
Tier 2: $25K-$75K revenue — Add professional liability (E&O)
Once you're taking on regular paid client work with real deliverables — strategy, design, code, financial or health advice — professional liability (errors & omissions) covers claims that your work itself caused a client financial loss, even if you did nothing wrong. Median cost runs around $30-$70 a month for most small operators, though it varies by field: giving financial or health advice carries a higher premium than graphic design or marketing consulting.
If you work from a home office with real equipment — a design workstation, camera gear, inventory — a Business Owner's Policy (BOP) bundling GL with commercial property coverage is usually cheaper than buying the two separately, often landing around $57-$150 a month depending on what you're insuring.
Tier 3: $75K-$100K+ revenue — Add workers' comp and cyber
Two triggers show up around this revenue band for most solopreneurs: bringing on a first employee (not a 1099 contractor — an actual W-2 employee), and handling meaningful amounts of client data.
- Workers' compensation becomes legally required in most states the moment you have even one employee. Cost is calculated per $100 of payroll and varies by state and job classification — there's no flat number, but it's a hard requirement, not optional.
- Cyber liability matters most for anyone storing client data, payment info, or health/financial records — tech-adjacent freelancers in particular. Median cost runs around $140 a month, reflecting the higher potential loss from a breach.
Business insurance premiums are generally fully tax-deductible on Schedule C for self-employed filers — it's one of the more painless business expenses to justify, since it reduces your taxable income while it protects you.
The entity question
Forming an LLC or S-corp doesn't replace insurance, but insurers generally view formally structured businesses as lower-risk and easier to underwrite than sole proprietorships, which can translate into smoother approvals and, in some cases, better pricing.
Compare disability coverage while you're at it
If you're your own safety net now, income protection matters more than it did as an employee.
Compare disability insurance →