You are probably paying too much if nobody has shopped your policies in two years. The other big tell is job categories or payroll on your policy that do not match the work you actually do. The only sure test is one accurate application priced by several insurance companies at once. Who this is for: owners who look at the insurance bill each year and wonder if it should be lower.
The short version
- There is no single fair price. Two insurers can price the same business thousands of dollars apart.
- The two biggest tells are no shopping in two years and job categories that do not match your work.
- Your price is built from your trade, payroll and sales, claims history, state, and whether that insurer even wants your kind of work.
- A second opinion costs nothing. A broker reviews your policies and shops them with one application.
- Cheaper is not better if the new policy excludes the work you do. Compare coverage before price.
What are the signs I am paying too much?
The bill only shows what one insurance company charges. These five signs mean a second look will pay off.
| Warning sign | Why it matters | What to do |
|---|---|---|
| Same insurance company for two or more years, never shopped | Insurers raise prices on quiet accounts. Competition is your biggest lever. | Have one application shopped. |
| Your class codes (the job categories your payroll is rated under) are wrong | An office manager rated as a roofer can double that part of your workers comp bill. | Read the job descriptions on your policy and fix any that are wrong. |
| Payroll or sales estimate is too high | You pay up front on the estimate, and the year-end check may not refund all of it. | Send a realistic number. |
| Limits higher than any contract asks for | A $2,000,000 limit costs more than $1,000,000, and most contracts only ask for $1,000,000. | Match limits to your contracts. |
| One quote at every renewal | One quote is a price, not a market test. | Ask for 3 to 5 quotes and who declined. |
Why is there no single fair price for my business?
Every insurance company starts with the same facts about you and applies its own math. Each one files its own rates, and each one has its own list of the businesses it actually wants. A company that likes electricians may price you 30 percent below one that does not. Neither price is wrong.
On top of the base rate, the person who prices your account can add a discount or a surcharge, from a plan the insurer files with your state. It is commonly up to 25 percent either way, but the range varies by insurer, state, and type of policy. Workers comp has no such credits in the states that set the rate (Florida, Indiana, North Carolina, Wisconsin, Idaho, Massachusetts, and New Jersey) or in the four states where a state fund is the only insurer (North Dakota, Ohio, Washington, and Wyoming). See why quotes for the same business vary so much.
These ranges are illustrative only. Your price depends on your trade, payroll, state, claims history, and the insurance company.
| Policy | Illustrative yearly range (small contractor, clean claims) | What moves it most |
|---|---|---|
| General liability | $1,200 to $6,000 for most trades. Roofing, demolition, and height work run higher. | Trade, sales, subcontractor use, residential work, state |
| Workers comp | $1.50 to $15 per $100 of payroll, depending on trade and state | Class codes, payroll, claims history multiplier, state |
| Commercial auto | $1,500 to $3,500 per truck | Vehicle type, drivers, radius, state |
| $1,000,000 umbrella | $600 to $2,500 | Trade and the policies underneath it |
For trade-by-trade detail see what contractor insurance costs.
How do I actually test my price?
- Gather the facts. Your declarations pages (the front pages of your policy that list your limits, dates, and price), your loss runs (your claims history report from your insurer, usually 3 to 5 years), payroll by job category, and yearly sales. See how to get your loss runs.
- Fix the facts first. Wrong job categories and inflated payroll make every quote too high.
- Have one application shopped. An independent broker sends the same application to several insurance companies, including specialty ones that do not quote online.
- Compare coverage before price. Check limits, deductibles, and exclusions side by side. A quote that is $1,500 cheaper but excludes residential work is not cheaper for a remodeler.
- Ask who declined and why. That tells you how much of the market you actually saw.
What this looks like in real life
Illustrative example. It is typical of what we see and is not a promise of how any specific situation would be handled.
The setup: A heating and cooling contractor in Texas has 5 field employees and 1 office assistant and about $820,000 in yearly sales. He pays about $29,000 a year for general liability, workers comp, and three vans, all with the same insurance company for five years.
What went wrong: A free review finds the office assistant rated under the heating and cooling installation job category, a payroll estimate about $70,000 above actual, and a $2,000,000 per occurrence general liability limit when every contract he holds asks for $1,000,000.
What it cost: Illustrative numbers: fixing the class code and payroll saves about $2,600 on workers comp. Matching the limit saves about $800. Shopping the same application to seven insurance companies finds a package about 14 percent below his current price. His total drops from about $29,000 to roughly $22,400, with no change in what is covered.
The fix: He was paying too much for two reasons: bad facts on the application and no competition. Both were free to fix. Neither showed up on the bill.
Frequently asked questions
Q: How do I know if I am paying too much for business insurance?
Check five things: whether your policies have been shopped in the last two years, whether your job categories match your real work, whether your payroll estimate is realistic, whether your limits match your contracts, and whether you got more than one quote. If two or more fail, a second opinion will probably lower your bill.
Q: Is there a normal price for insurance for a business like mine?
There is a range, not a single number. Your trade, payroll, sales, state, and claims history set the range, and each insurance company lands somewhere different inside it. The only way to find yours is to have several companies quote the same facts.
Q: How often should I get my business insurance reviewed?
Every renewal should include a review of your job categories, payroll, and limits, since those change as you grow. A full market shop every one to three years is enough for most small businesses.
Q: Can I just get an online quote to check my price?
You can, but an online quote covers a few companies and only standard kinds of work. It often declines roofing, height work, residential, new businesses, or anyone with a past claim. It is one price, not proof you are overpaying.
Q: Does a second opinion from a broker cost anything?
The review and the quotes are free. The insurance company pays the broker a commission out of the premium if you buy, and you are under no obligation to switch. Ask about a separate broker or wholesaler fee on a specialty placement. Fee rules are set state by state, so ask for any fee in writing before you agree. See the difference between a broker and an agent.
Q: What if the review shows I am actually underinsured?
That happens too. Owners sometimes find a missing add-on page (an endorsement, which is a change added to your policy) or a limit below what a contract requires. A good review tells you where you are overpaying and where you are exposed.
How Morrow helps
Morrow is a licensed independent commercial insurance brokerage that works with contractors and trades every day. Reviewing what a business owner pays now, fixing the facts on the application, and shopping it across many insurance companies is the most common way we find out whether someone is paying too much.
- Free contract review. Send us the contract or bid documents and we mark up the insurance section in plain English, whether or not you buy anything from us.
- Free, instant certificates. Clients issue their own certificates of insurance online in about a minute, any hour, any day, at no charge.
- Markets you cannot reach online. One application, shopped across many insurance companies for general liability, workers comp, auto, umbrella, and pollution coverage.
One more thing. This article is general information and is not legal advice or a statement of coverage. Your contract and your policy wording control in every case. Requirements vary by customer, by state, and by insurance company, so have a licensed advisor review your own contract and your own policy before relying on any of it.
Last updated: Reviewed by the Morrow commercial lines team. Last updated September 2026.