How Much Does General Liability Insurance Cost?

As a business owner, you may be wondering how much general liability insurance will cost you. The cost of general liability insurance can vary depending on several factors, including the type of business you have, the level of risk involved, and the amount of coverage you need.

On average, small business owners can expect to pay around $400 to $1,000 per year for general liability insurance. However, this cost can be higher or lower depending on your specific business needs.

The type of business you have can have a big impact on the cost of your insurance. Businesses that are considered high-risk, such as construction companies or those that work with hazardous materials, may pay more for insurance due to the increased likelihood of accidents or injuries. On the other hand, businesses that are considered low-risk, such as those that provide professional services, may pay less for insurance.

The level of coverage you need is another factor that can impact the cost of general liability insurance. The more coverage you need, the higher your premiums will be. Most insurance providers offer different levels of coverage, so it's important to evaluate your business's specific needs and choose a policy that provides adequate protection.

Another factor that can impact the cost of your general liability insurance is your business's location. Different states have different insurance regulations and requirements, which can impact the cost of insurance.

Finally, your business's claims history can also impact the cost of your insurance. If your business has a history of claims or lawsuits, you may be considered a higher risk and may be charged higher premiums.

It's important to shop around and compare insurance providers to find the best policy and price for your business. Be sure to read the policy carefully and understand what is and isn't covered.

In conclusion, the cost of general liability insurance can vary widely depending on several factors. As a business owner, it's important to evaluate your specific needs and shop around to find a policy that provides adequate coverage at a reasonable price. While insurance can be an additional expense, it's an important investment in protecting your business from potential financial losses.

In summary, below is a list of the main factors that determine how much does business liability insurance cost and 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.

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 general liability insurance cost 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.

General liability insurance covers: Third party liability claims for bodily injury & property damage for legal obligations that arise from an accident, as well as advertising, personal injury liability, and medical payments for persons injured on your premises or due to your operations, regardless of fault.

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 have more general liability insurance cost than office type policies. Slip and fall is usually the largest risk for most office and retail locations.

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.

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.

Insurance companies prefer to insure businesses that have experience. For two main reasons:

1. The longer a business has been in the industry, the more financially stable they look to an insurer.
2. 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.

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.

Past claims on a CGL 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.