How Much Does General Liability Insurance Cost?

How Much Does General Liability Insurance Cost?
Almost every business type of every size would do well to cover itself with general liability insurance. After all, if you don’t – you will become “generally liable” for a host of damages in potential lawsuits. And the things covered by general liability won’t be covered by workers comp or other commercial insurance types.
So, on the one hand, you have to consider the cost of not having general liability. General liability covers bodily injury and medical expenses of third parties (not yourself, not an employee), damage to a third party’s property, damage caused by your “completed products”, advertising errors and reputational harm, and more.

A lawsuit for any of the above could cost tens or even hundreds of thousands of dollars and easily sink a small business.

But like any business cost, you need to know a ballpark figure at least upfront for what general liability insurance is likely to cost you. Here’s some help in that regard.

What Does An Average General Liability Policy Cost?
The average annual cost of general liability coverage for US businesses runs between $400 and almost $3,000. Most small businesses are in the $400 to $600 per year range, while about 20% of small businesses pay only $200 to $400 a year.

That may sound like a lot. But the truth is, the expense of a single lawsuit covered by general liability could easily dwarf the expense of years of premiums at those rates.

Buying general liability is like any other type of insurance: it’s buying protection against calculated risks.

Without the cover general liability provides, your business may seem like it’s “naked,” exposed, vulnerable to all kinds of (often frivolous) lawsuits; and most business owners conclude they’re better off investing in general liability than risking the potentially devastating consequences of not doing so.

Which Factors Drive The Cost Of General Liability Insurance?
In general, the riskier your business for specific coverage areas included under your general liability policy, the higher will be your premiums. But how is that risk level weighed?

First of all, your industry (“business type”) will determine how much you pay.

For example, brick and mortar retail outlets generate a lot of foot traffic, which increases the risk of a slip and fall accident. Janitorial companies are constantly in other people’s buildings, which increases the risk of damaging a customer’s personal property. And a business consultant is at greater risk of being sued for giving out allegedly bad advice (which might also be covered by professional liability insurance).

The three most expensive business types to cover with general liability are janitorial, construction contractor, and manufacturer. The latter two are particularly prone to accidental injuries, while janitorial has a high risk of property damage.

But besides industry, the size of your business also matters. The more volume of work you handle, the greater risk you create. And that increases the premiums.

And if you want higher coverage limits or a wider range of coverage areas via policy riders, then that, of course, is also going to raise the cost of the insurance.

Finally, if your business has a history of making numerous, heavy claims or of having excessively high rates of injuries and property damage, that could also increase premiums.

To learn how to get the best cost-to-value ratio for general liability insurance, or for a free quote, contact Flagler County (FL) Insurance Agency today!