How Much Does General Liability Insurance Cost?

Does your business have a general liability or business insurance? Many businesses fail to see the importance of a having an insurance and do not get one. There are those who still think they don’t need it and it’s an unnecessary business expense. But insurance is protection.

Running a business is already complicated as it. A business liability insurance coverage can let the business owners focus more on their day-to-day operations. It is an added stress to spend sleepless nights thinking what might happen if something goes wrong. Yes, an insurance premium is another business expense, but it’s a necessary one for any business type.

So, how much does commercial general liability insurance cost?

General Liability Insurance Average Cost

Business liability insurance cost varies per business but, on the average, annual cost can range from $400 to $1,500. To give you a better idea on the average cost of general liability insurance a per industry level, here’s some data based on an aggregate policy limit of $2 million and a per-occurrence limit of $1 million:

INDUSTRYAVERAGE MONTHLY COST (rounded-off)
Wholesalers$115
Contractors$82
Manufacturers$76
Restaurants$64
Janitors and Maids$61
Retail$60
Home-based business$54
Lawn Care/Landscaping$51
Healthcare Professional$37

Among the number of business insurance products available, the general liability insurance is the most common and is usually the least expensive. Thus, the average cost of a general liability insurance is usually less than the average cost of business insurance.

Inclusions

A general liability insurance protects the business from financial loss due to bodily injury, property damage, medical expenses, libel, slander, defending lawsuits, and settlement bonds or judgments.

Thus, the insurance coverage will cover the payments for the following:

  • Cost of the legal teams to represent the business
  • Cost of Witness Fees
  • Evidence costs
  • Payments required for the judgment or settlement

Other Costs to Consider

The costs of financial loss due to eventualities involving damage to or by the following are not included in a general liability insurance coverage and should be covered by separate insurance policies, as indicated:

  • Owned-commercial property – these should be covered by a Business Owners Policy.
  • Professional mistakes – these should be covered by a Professional Liability Insurance.
  • Commercial vehicles – these should be covered by a Commercial Auto Policy.
  • Stolen or hacked files, along with private files accidentally shared – these should be covered by a Cyber Liability Insurance.
  • Products or after the transaction is completed – these should be covered by a Product Liability Insurance.
  • Workers and in compliance with the state compensation law – these should be covered by a Workers’ Compensation Insurance.
  • Alcohol-related for businesses selling, distributing or serving alcohol – these should be covered by a Liquor Liability Insurance.

There is also a commercial umbrella insurance which can compensate for financial losses more than the limit of certain business insurance coverages like a general liability insurance.

If a business avails some or even all of the above insurance coverages, the average cost of business insurance is expected to be higher.

Remember, a general liability insurance does not cover everything and is best for the business when availed in combination with other insurance products. It could, however, be availed as a stand-alone policy.

General Insurance Liability

Buying Tips

Want to get the best deal for general liability insurance? Then, shop around. It is best to get quotations from several reputable insurance companies before making your choice. Some companies can offer a better deal than the others.

Hiscox offers a discounted commercial general liability insurance cost for businesses with good risk management procedures in place and if additional insurance products are purchased while Progressive Commercial has a Progressive Advantage Busines program that gives a good deal for combination insurance products for businesses. Websites of insurance companies often offer quotations and act as a business liability insurance cost calculator by providing quotes even within minutes after online submission of required data.

Also, look for insurance companies that are not only reputable but also offer flexible payment options and same-day coverage, as these will be better for the business.

For those interested in understanding the business liability insurance cost calculator, Wikihow provides an informative 15-step guideline on how to compute for general insurance liability premium.

General Liability Insurance Cost Factors

As in with any insurance, the general liability insurance coverage of a particular business should be tailor-fit to its operations and will depend on the following factors:

  • Industry – the nature of the business is the foremost driver of general liability insurance cost. There are businesses whose operations are more prone to lawsuits than others. Said business is imposed a higher insurance premium.
  • Risk Exposure – The higher the risk exposure of the business, the higher the insurance premium.
  • Contractual Requirements – Often, contracts require that for the partnership between businesses to proceed, there should be a general liability insurance and that a certain amount of coverage is stipulated.
  • Size of the Premises – the bigger the size of the premises, the greater is the possible risk fo injuries. Thus, the higher insurance premium.
  • Condition of the Premises – the older the “age” of the premises is, the greater is the possible risk of injuries. It will also lead to a higher insurance premium.
  • Experience in the business operations – The newer the business is in the industry, the higher the insurance premium. The premise is that an “older” business is more adept at operations than a newer business.
  • Number of Employees – The more employees the business has, the higher is the risk that a possible accident can be caused by them to clients or others. Thus, the higher insurance premium.
  • Location fo the Business – Business in the city, where the crime rate is higher than in the suburbs, are imposed a higher insurance cost. The same goes for a business with more traffic in the business premises.
  • Limits and Deductibles -The higher the insurance coverage limit, the higher will be the insurance premium. On the other hand, the more deductibles, the lower the premium.
  • Features of the Policy – The more features the insurance policy has, the higher the insurance premium.
  • Claims History – If the business has the previous history of claims against their general liability insurance, it can affect the insurance premium to be paid on subsequent coverages.

What Else You Need to Know.

According to the Small Business Administration, the costs of a lawsuit to a business could be from $4,000.00 to $190,000.00 in today’s prices. Imagine if a business is without insurance. Sadly, there are still some business owners who lacked the foresight to get an insurance and have paid dearly for their mistakes.

As we now live in a world where lawsuits abound and affect businesses greatly, the best for the business is to be always ready and protected.

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