How Much Does General Liability Insurance Cost?

The cost of general liability insurance varies depending on your business, ranging from a few hundred to a few thousand dollars annually. Factors like industry, size, location, and coverage limits all play a role. Understanding these variables and shopping around with different providers can help you find the best deal to protect your business.

Are you a small business owner wondering how much money you’ll need to spend on general liability insurance?

There are lots of factors that can influence the cost of your policy, from the amount of coverage needed to the size and scope of your operations. Understanding each element that impacts pricing can help you get an accurate estimate so you can budget accordingly.

In this article, we will answer the question “how much does general liability insurance cost” by taking a look at all the things that affect general liability insurance costs and how to make sure it fits within your budget.

What Is General Liability And What Does It Cover?

General liability insurance, also known as commercial general liability insurance, protects small business owners from legal liability due to a variety of potential claims.

This type of insurance can help protect businesses in the event of property damage, personal injury, slander and libel, and other general claims that could arise during the operations of a business. Most general liability policies include coverage for medical costs associated with bodily injury to people not employed by the insured or any other fees or settlements arising from those claims.

In addition, business liability insurance may cover repairs to damaged property and any associated legal costs. It is important for business owners to have this coverage in order to protect themselves from liabilities that may arise in the future.

You can read more of our blogs about General Liability Insurance for more information.

DID YOU KNOW? The cost of general liability insurance is influenced by multiple factors, such as the nature of the business, its size, and the specific risks it faces. Factors including business operations, annual revenue, number of employees, location, and loss history play a significant role in determining the insurance premium. Policy limits and the need for additional coverages also impact the overall cost, making each policy unique to the business it covers.

How Much Is a $1 Million General Liability Insurance Policy?

A 1 Million Dollar General Liability Insurance Policy can cost $40 Per Month up to $150 Per Month for most small businesses.  Of course, the cost of general liability insurance varies depending on the size of the operation and coverage amounts selected.

It’s important to consider general liability insurance policy pricing when starting a new business.

If a business needs more than $1M of general liability protection, higher premiums come as coverage limits increase. Business owners should consult with a local independent insurance agent so they can find a policy that meets their particular business needs at the best possible price.

What Factors Can Affect The Cost Of General Liability Insurance?

The cost of business liability insurance coverage for a business can vary considerably, depending on several rating factors.

  • Business Operations (what the business does)
  • Annual Revenue
  • Number Of Employees
  • Location Of Business
  • Loss History
  • Policy Limits
  • Additional Coverages Needed

Understanding How Business Operations Impact General Liability Insurance Premiums

Normal Business operations have a major impact on the cost of general liability insurance. This is because the type of work you do will determine the risks associated with your business.

For example, a construction company may face greater general liability exposure than an accounting firm as they are more likely to experience property damage or bodily injury.

In general, more dangerous occupations come with higher general liability insurance premiums. Businesses that involve hazardous materials, construction, manufacturing, or other high-risk activities can expect to pay more for their general liability insurance than those operating in less hazardous industries.

How Annual Revenue Can Impact the Cost of General Liability Insurance

Annual revenue is one of the major rating factors that general liability insurance companies use to calculate premiums.

This is because the more money a business earns, the greater its exposure and risk become. As businesses grow, they often take on bigger contracts and acquire larger amounts of property or assets; this increases the potential for accidents or losses resulting from general liability claims against them.

For example, if an HVAC (Heating & Air Conditioning) takes on a larger client with higher general liability risks than normal (such as working with hazardous materials), their annual revenues may increase along with their premium rates due to the increased risk involved.

The Impact of Employee Numbers on General Liability Insurance Premiums

The number of employees a business has is an important rating factor when it comes to general liability insurance because it can indicate the potential for a higher number of general liability claims.

As the number of employees increases, there is an increased risk that a general liability claim could arise.

A company increases the number of employees in direct correlation with the increase in the amount of work or services the small business provides.  The more work and service a company provides, the greater the likelihood that a loss could occur.

Overall, the number of employees a business has is an important consideration when calculating general liability insurance premiums and should be taken into account when choosing coverage limits and deductibles.

How Location of Operations Can Affect General Liability Insurance Premiums

Location is an important factor when it comes to general liability insurance premiums, as it can affect the level of risk associated with a business.

Different states and regions may have different laws regarding general liability insurance, which can affect the cost of coverage.

For example, general liability insurance in New York would cost more than comparable North Carolina general liability insurance due to the legal climate of each state.  The more litigious the state, the greater the likelihood the courts will hand out more and larger lawsuit awards that the insurance company will have to pay.

Overall, location is an important rating factor when it comes to general liability insurance because it can affect both legal requirements and specific risks associated with a business’s area of operations. It is important for business owners and insurers alike to understand how their location affects general liability premiums so that they can make sure they are properly covered at the right price.

Understanding How Your Policy Limit Affects Your General Liability Insurance Premium

When it comes to general liability insurance, the policy limit is an important rating factor for general liability premiums.

The higher a business’s general liability policy limit, the more the insurance company providing the general liability insurance could potentially have to pay for a claim.  A business’s policy limit can be adjusted depending on how much risk they are willing to assume in exchange for a lower premium rate.

The general rule of thumb when selecting your general liability policy limits is that you should have enough coverage to protect all of your assets (such as buildings and materials) plus any liabilities that may arise during operations (including legal fees), with some extra room added just in case.

With general liability insurance, businesses typically choose general liability coverage with Per Occurrence Limit of $1 million and Aggregate Limits of $2 million; however, these figures will vary depending on the size of the company and its industry-specific risks posed by their day-to-day operations.

Business owners should consider several factors when deciding what amount of general liability coverage best suits them:

  1. The type of work they do
  2. Their financial situation
  3. The state laws associated with the area in which they

Understanding How Purchasing Add-On Coverages Can Impact Your General Liability Insurance Premiums

Small Businesses can have unique needs when it comes to their business insurance that requires the addition of coverage(s) to the base liability insurance.

Some of the most common endorsements are:

  • Products-Completed Operations
  • Contractual Risk Exposures
  • Professional Liability
  • Hired And Non-Owned Auto Liability
  • Additional Insured
  • Waiver Of Subrogation

These additional coverages can drive up business insurance costs because the Insurance Carrier faces the potential for increased claims payouts. All of these general liability rating factors contribute to the eventual cost of general liability insurance coverage for a particular policyholder, so understanding how they are applied helps ensure that small businesses are getting the best deal possible on general liability coverage.

Tips For Finding The Best Deal On General Liability Insurance

Finding the best general liability insurance deal is no easy feat.

Fortunately, there are a few tips you can use to help reduce the cost of general liability insurance and find the right coverage for your business.

First, find an Independent Insurance Agent that has access to multiple insurance carriers. A local insurance agent can help advise you to make sure you are getting the most comprehensive policy with the maximum benefit.

Second, talk to your local insurance broker and ask them about any discounts or bundling opportunities that may be available such as combining general liability insurance with other types of coverage.

Finally, create and implement a comprehensive risk management plan.  A defined risk reduction strategy will help lower the chances of suffering a loss by lowering your overall risk exposure.  A business that has a lower risk profile will pay lower insurance premiums than a similar business with more risk.

By following these tips you can easily find the best general liability insurance deal for your small business.

People Also Ask - How Much Does General Liability Insurance Cost

Yes, general liability insurance is often paid on a monthly basis. This allows businesses to spread the cost of their insurance premium over the year, making it more manageable. However, payment options can vary between insurance providers, and some may offer annual or bi-annual payment plans as well.

Absolutely. General liability insurance is crucial for protecting businesses against a range of common risks, such as property damage, bodily injury, and legal claims. Without this insurance, a business could be financially responsible for all costs related to a claim, which can be substantial.

The cost of a $2 million general liability policy varies based on factors like business type, size, location, and risk factors. However, it's generally higher than a $1 million policy due to the increased coverage limit. Businesses should consult with an insurance agent to get an accurate quote based on their specific needs.

General liability insurance typically covers bodily injury and property damage caused to others, personal and advertising injury (like slander or libel), and medical payments. It can help with legal costs, settlements, and medical expenses associated with these claims. However, the specific coverage details can vary based on the policy.

The Final Verdict - How Much Does General Liability Insurance Cost

General liability insurance is an essential safeguard for businesses, offering protection against a myriad of risks and potential legal liabilities. The cost of this insurance is influenced by various factors including business operations, annual revenue, number of employees, location, loss history, policy limits, and additional coverages needed. While a $1 million policy might cost between $40 and $150 per month for small businesses, the exact price is tailored to each business’s unique situation.

To secure the most advantageous deal on general liability insurance, businesses should consult with an independent insurance agent, explore discount and bundling options, and implement a comprehensive risk management plan. These steps not only assist in finding an insurance policy that fits within the budget but also help in reducing the overall risk profile, potentially leading to lower premiums.

We encourage businesses to reach out to an ALLCHOICE Insurance Advisor. They can provide expert guidance, ensuring that you have the right coverage to protect your business at a cost that aligns with your financial plan. Remember, the right general liability insurance isn’t just an expense; it’s an investment in the stability and future of your business.

How to get General Liability Insurance

New ALLCHOICE customers:
Current ALLCHOICE clients:

Check out the Member Center or call us at 1-844-540-0463 to see if product is availbale and included in your policy.