Frequently Asked Questions About
Commercial General Liability Insurance
How much does commercial insurance cost?
Costs can vary widely based on industry and are also determined by zip code and often payroll and/or gross sales. Request a free quote to get an exact number.
What kind of business insurance do I need?
Most business owners need General Liability Insurance at the very least. If you have any non-owner employees, you will need workers compensation insurance too.
What is a Certificate of Insurance?
A Certificate of Insurance is proof of coverage. It lists the type and amount of liability coverage you have and other policy information when a third party requests it.
Is business insurance tax deductible?
Yes. you can deduct the cost of commercial insurance premiums. The IRS considers insurance a cost of doing business as long it benefits the business & serves a business purpose.
How Much Does General Liability Insurance Cost?
How Much Does General Liability Insurance Cost? It's often hard for business owners to guess how much their insurance will cost. It's a good idea for most businesses to purchase insurance that covers them against liability claims, property damage, accidents and theft.
So how much does general liability cost? The actual month-to-month cost of a commercial general liability insurance policy will vary based on the amount of coverage, the business location, payroll or gross sales, the work that a business performs and other factors.
How much does general liability insurance cost? Costs will vary due to the business' size, location and industry - from as low as $27/mo for small businesses to thousands per month for large ones.
The Cost Of General Liability Insurance
There is data available about the average cost of small business insurance. It varies based on the study done. How much does general liability insurance cost?:
The Small Business Association says the cost for a small business general liability policy usually ranges from $750 to $2,000 annually or approximately $60 to $170 per month.
Insureon says the average (mean) cost of their 18,000 policies is about $100 a month, while the median cost is about $50 per month. This means that there are a lot of businesses that pay $50 or less and a small number that pay quite a lot more than $100.
Hiscox says they recently surveyed 50,000 small businesses with fewer than 10 employees to determine how much they pay for general liability insurance. Based on their results, the typical cost for general liability insurance was approximately $30 per month. Specifically, more than 80% of small businesses pay $30 per month or less for general liability coverage, while 95% pay $50 per month or less. Only 1% have a general liability insurance cost of over $100 per month.
What You Get When You Buy General Liability Insurance
While we are talking about how much general liability costs, it makes sense to give an brief outine of what type of commercial liability insurance you are actually buying, and what is included in a standard ISO CGL policy:
Section I - Coverages: Provides three distinct coverages:
- Coverage A - Liability coverage for bodily injury and property damage insures your legal obligations that arise from an accident. It also includes the costs related to lawsuits and other legal proceedings. The limits of insurance should be sufficient to handle serious injuries and the injured person's loss of earnings.
- Coverage B - Liability coverage for damages due to personal and advertising injury insures your legal obligations that arise from an offense. It also includes the costs related to lawsuits and other legal proceedings. The limits of insurance should be sufficient to handle serious injuries and the injured person's loss of earnings.
- Coverage C - Medical Payments coverage pays the cost of medical care to persons injured on your premises or due to your operations, regardless of fault.
Each of these coverages is subject to certain policy exclusions, conditions, and definitions. It describes each of these coverages with respect to the insuring agreement, exclusions, and supplementary payments that apply to them.
Section II - Who Is an Insured: Describes eligible parties that are considered insureds.
Section III - Limits of Insurance: Explains how each limit of insurance applies as well as how they work together and relate to one another.
Section IV - Commercial General Liability Conditions Describes the specific conditions that apply to CGL coverage. Some of them involve the named insured's responsibilities after a loss. Coverage is voided if one or more of these conditions are violated.
Section V - Definitions: Describes certain words and phrases used with and related to the coverage provided. They are different than the ones found in the dictionary and are very important because coverage can be given or taken away through a definition.
General Liability Insurance Cost & Your Business Type
How much does general liability insurance cost? The type of work your business handles also affects the cost of your insurance. Some industries are inherently more risky than others. If you are business consultant, there's not a lot of damage that your business can cause, so your general liability insurance will likely inexpensive. On the other hand if you do contracting work, your risks are generally higher to cover any potential damages your business might cause.
It is logical that a roofers general liability policy will cost more than an accountants, all things being equal. The roofer has the potential to do a lot more damage and have much larger claims - that is why contractors policies are more costly than office type policies. Slip and fall is usually the largest risk for most office and retail locations.
General Liability Insurance Cost & Your Business Size
As your business handles more revenue, has more employees, and occupies larger buildings, the cost of your insurance will go up. If you're working alone out of your home, there's not a lot to insure. If you've got 10 employees, a retail office, and $100,000 of monthly cash flow, your insurance will have to protect all of these things. This means worker's compensation insurance, property insurance, and protections against theft.
General Liability Insurance Cost & Your Business Location
How much does general liability insurance cost? The state and zip code of your business plays a role in the cost of your coverage as well. If you do business in an area where the risk is greater - like in inner city with more crime etc. - you may pay more than the same type of business in a small town in the country.
Another location consideration is the weather. If your business is an area that gets more wind and rain and hail damage, this can have an effect on your premiums.
General Liability Insurance Cost & Your Business Experience
Insurance companies prefer to insure businesses that have experience. For two main reasons:
- The longer a business has been in the industry, the more financially stable they look to an insurer.
- More experience usually means less chance of a claim because the longer you do the something, the better you get at it. For example, an experienced tree trimmer will typically have a smaller chance to drop a tree on a home than a inexperienced company.
General Liability Insurance Cost & Policy Features
The items that your insurance covers will have a big impact on the final cost. As basic commercial general liability policy will cost less than a business owners package, which ads property and other coverages. Adding product liability to a general liability will increase costs. If you want other features like hired and non-owned auto and equipment breakdown etc... can also increase the price.
How much does general liability insurance cost? It makes sense the more coverage that you add, the more you will pay for your small business insurance.
General Liability Insurance Cost & Your Claims History
Past claims on a GL policy can have an effect on the premium. Many insurers consider the frequency and nature of the losses when determining its effect on the rate. The good news is unlike personal auto or home owners insurance, many carriers evaluate claim histories on a case-by-case basis with commercial insurance.
So How Much Will My General Liability Policy Cost?
In summary, below is a list of the main factors that determine how much does general liability insurance cost?
- Industry - If you own a white collar business, such as an book keeping firm, your premiums may be lower than, say, a tree trimming company, where the potential risks are higher.
- Location - Your zip code can have a significant impact on your premium. For example, if your business is located in Fargo, North Dakota, your business insurance costs may be lower than a similar business located in New York City.
- Gross Sales - The more revenue you have, the higher your premium will be. So if your small business earns less than $50,000 annually, your premiums may be lower than a larger business that pulls in more than $1,000,000.
- Employees - The more people you employ, the higher your insurance costs may be.
- Policy Limits - When you buy a policy, you can decide how much coverage you want, and you pay for what you pick. For example, a CGL policy with a $1,000,000 limit per claim will cost more than one with a $500,000 one.
- Deductibles - Similar to medical insurance, lower deductibles for commercial insurance mean higher premiums. If you raise your deductibles (out-of-pocket costs), the policy cost will usually decrease.
- Experience - A business with more experience can often get lower premiums that new businesses.
- Claims History - Similar to car insurance, more claims can mean higher premiums. If you have claims on your policy, the cost will typically increase.
General Liability Costs - The Bottom Line
If you want to know exactly how much does general liability insurance cost, it's a good idea to get in touch with broker. They'll be happy to go over your business information and suggest a variety of plans and policies that might meet your needs and budget. You'll be able to select the exact amount of coverage you want, meaning you can cut costs and keep things as cheap as possible, or get insurance that will cover your business in the event of large claims.
A commercial insurance agent can also help answer any questions you have related to legal insurance minimums, what happens when a liability claim is filed against you, or what types of things each policy covers.
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Get useful tips and information about how much commercial insurance costs, small business risks and exposures, how insurance regulations effect your businesses' and detailed descriptions of coverages and exclusions and more. Most small businesses need to buy the following four types of insurance at a minimum to cover their operations from every day risks:
Property Insurance: This policy covers a business if the property used in the business is damaged or stolen as the result of common perils like fire or theft. Commercial property insurance covers the buildings, structures and also business personal property - which includes furniture, inventory, raw materials, machinery, computers and other items.
Liability Insurance: Any company can be sued. Slip-and fall lawsuits are very common and be costly. Customers can claim you injured them or damaged their property - and lawsuits are very expensive. Commercial liability insurance pays damages and can include attorney's fees and other legal expenses. It also ca pay for the medical bills of injured third parties
Commercial Auto Insurance: For vehicles owned by the business. Commercial auto insurance pays bodily injury or property damage costs for which the business is found liable - up the the policy limits for liability and property damage.
Workers Compensation Insurance: In almost every state employers must provide workers comp when there are W2 employees. Workers compensation pays for the medical care of employees and can replace a portion of lost wages - regardless of who was at fault for the injuries.
Quotes from leading small business insurance carriers including: ACE, AmTrust, Chubb, Cincinnati, CNA, Colony, Employers, Evanston, Fireman's, Foremost, Guard, Hanover, Hiscox, Liberty Mutual, LLoyd's of London, Markel, MSA, Nationwide, Penn America, Philadelphia, Prime, Progressive, Scottsdale, The Hartford, Travelers, USLI, Utica First, Western World, Zurich & others.