Average Cost Of General Liability Insurance For Small Businesses
What is General Liability Insurance?
General liability insurance is a type of business insurance policy that provides coverage for a wide range of risks that come with owning and running a business. It is one of the most common types of business insurance and is essential for any business that may encounter third-party liability claims. General liability insurance covers the costs associated with third-party claims of bodily injury, property damage, and personal injury (such as libel and slander). It also covers the cost of defending a lawsuit and any associated legal fees. General liability insurance is also known as commercial general liability insurance, or CGL.
What Does General Liability Insurance Cover?
General liability insurance covers a wide range of risks, including bodily injury, property damage, personal injury (such as slander and libel), and advertising injuries. It also covers the cost of defending a lawsuit and any associated legal fees. In addition, it covers medical expenses if someone is injured on your business premises, and any damage you or your employees cause to a third-party’s property. General liability insurance does not cover professional services, worker’s compensation, or auto liability. It is important to note that general liability insurance does not cover intentional acts, nor does it cover damage to your own property.
What is the Average Cost of General Liability Insurance for Small Businesses?
The cost of general liability insurance for small businesses varies depending on the type of business and its size. Generally, small business owners can expect to pay between $400 and $1,200 a year for general liability insurance. Factors such as the size of the business, the number of employees, and the type of business will all affect the cost of the policy. For example, businesses in the construction industry may have higher premiums because of the higher risk of injury and property damage associated with the work.
How to Reduce the Cost of General Liability Insurance
There are several ways to reduce the cost of general liability insurance for small businesses. One way is to increase the deductible. This means that if a claim is made, the business will have to pay more out of pocket before the insurance company takes over. Increasing the deductible can significantly reduce the cost of the policy, but it also means that the business owner would be responsible for paying more out of pocket in the event of a claim. Another way to reduce the cost of general liability insurance is to shop around and compare policies from different insurance companies. You can also get discounts if you bundle your business insurance policies, such as general liability and property insurance.
What Other Factors Affect the Cost of General Liability Insurance?
The cost of general liability insurance for small businesses is also affected by the type of business and the amount of risk associated with it. Businesses in industries such as construction, mining, and manufacturing typically have higher premiums because of the higher risk of injury and property damage associated with their activities. Businesses with more employees and higher levels of revenue may also have higher premiums, as they are more likely to face more claims. Additionally, businesses that have more assets, such as property or equipment, may have higher premiums because they are more likely to face more claims.
How to Choose the Right General Liability Insurance for Your Small Business
When choosing the right general liability insurance for your small business, it is important to consider the type of coverage you need and the amount of risk associated with your business. You should also consider the cost of the policy and the amount of coverage it provides. Most insurance companies offer a variety of policies, so it is important to compare different policies to find the best one for your business. Additionally, it is a good idea to speak with an insurance agent who can help you find the right policy and explain the different coverage options.
Conclusion
General liability insurance is essential for any business that may encounter third-party liability claims. The cost of general liability insurance for small businesses varies depending on the type of business and its size. Generally, small business owners can expect to pay between $400 and $1,200 a year for general liability insurance. When choosing the right general liability insurance for your small business, it is important to consider the type of coverage you need and the amount of risk associated with your business. Additionally, it is a good idea to shop around and compare policies from different insurance companies to find the best one for your business.