The Cost Of General Liability Insurance For Small Businesses
Overview of General Liability Insurance
General liability insurance is a type of coverage that protects businesses from third-party claims of bodily injury, property damage, and personal or advertising injury. This coverage pays for the costs associated with defending against such claims as well as any costs associated with an adverse court judgment or settlement. It also provides businesses with a legal defense in the event of such claims. General liability insurance is an essential part of any business’s insurance portfolio, as it provides protection against accidental or negligent acts that may occur in the course of business operations. The cost of general liability insurance for small businesses can vary widely, so it is important to shop around and compare quotes before deciding on a policy.
Factors that Influence the Cost of General Liability Insurance
The cost of general liability insurance for small businesses can be influenced by a variety of factors, including the type of business, the size of the business, the location of the business, the number of employees, and the types of activities the business is engaged in. For example, businesses in certain industries, such as construction and manufacturing, may be considered higher-risk and may be charged higher rates. Businesses in high-risk areas, such as near bodies of water or in areas prone to natural disasters, may also be charged higher rates. Businesses with more employees may also be charged higher rates, as there is a greater potential for liability claims. The types of activities that a business engages in, as well as the number of customers it serves, can also affect the cost of general liability insurance.
Types of General Liability Insurance
There are several types of general liability insurance available, depending on the needs of the business. The most common type of general liability insurance is the Commercial General Liability (CGL) policy. This type of policy provides coverage for bodily injury, property damage, personal injury, and advertising injury. It also provides protection against product liability claims, such as claims arising from the sale of defective products. Businesses may also choose to purchase an umbrella liability policy, which provides additional coverage and higher liability limits than a CGL policy. Other types of coverage that may be included in a general liability policy include professional liability, which provides protection against claims related to professional services, and employment practices liability, which provides protection against claims related to wrongful termination or discrimination.
What Does General Liability Insurance Cover?
General liability insurance provides protection against third-party claims of bodily injury, property damage, personal injury, and advertising injury. It also provides coverage for medical expenses and the cost of defending against such claims. In the event of an adverse court judgment or settlement, general liability insurance may also provide coverage for the resulting costs. The exact coverage provided by a general liability policy will depend on the type of policy purchased and the specific coverage limits chosen.
Average Cost of General Liability Insurance
The cost of general liability insurance for small businesses varies depending on the type of policy purchased and the specific coverage limits chosen. Generally speaking, the average cost of a basic CGL policy for a small business is between $500 and $1,000 per year, with higher limits costing more. An umbrella policy may cost between $1,000 and $2,000 per year. It is important to note that the cost of general liability insurance can vary significantly depending on the type of business and the coverage limits chosen, so it is important to shop around and compare quotes before making a decision.
Tips for Saving Money on General Liability Insurance
There are several ways to save money on general liability insurance for small businesses. One way is to purchase a policy with higher deductibles. This will reduce the amount of money paid out in the event of a claim, and the savings can be significant. Another way to save money is to bundle general liability insurance with other types of coverage, such as property insurance, workers’ compensation, or professional liability insurance. This can result in a discounted rate. Additionally, businesses may be able to save money by taking advantage of discounts for safety measures, such as fire alarms and sprinkler systems. It is also a good idea to compare quotes from multiple insurance companies before making a decision.
Conclusion
General liability insurance is an essential part of any business’s insurance portfolio, as it provides protection against accidental or negligent acts that may occur in the course of business operations. The cost of general liability insurance for small businesses can vary widely, so it is important to shop around and compare quotes before deciding on a policy. There are several ways to save money on general liability insurance, such as purchasing a policy with higher deductibles, bundling policies, and taking advantage of discounts. By taking the time to compare quotes and explore all available options, businesses can ensure that they are getting the best possible coverage for their needs at the most affordable price.