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General Liability Insurance Cost

General Liability Insurance Cost

General liability insurance is at the base of all types of insurance coverages that a business will ever need. It will usually be the first type of coverage you should be getting to protect yourself. You should try to always include the general liability into your insurance portfolio regardless of whether you are an established multi-employee company or a one-person entity.

The cost of general liability insurance will depend on a few defining factors. Before you can make an informed decision, you will have to evaluate your particular business model and the risks around it, and the industry as a whole. Only after you do this, you will be able to find a policy that would cover your needs, concerns, and risks the best.

How Much Does General Liability Insurance Cost?

The cost of general liability insurance will usually be situated somewhere between $600 and $800. It will be almost entirely determined by your business’s exposure to risk. Most insurers will usually want to know the following info:

  • History of claims
  • Annual revenue
  • Number of customers
  • Years in business

The general liability insurance cost will actually vary based on each particular industry.

You might also like our articles on the cost of business insurance for startups, small business insurance, or commercial property insurance.

But What Exactly Is General Liability Insurance?

General liability insurance is what protects your business from any financial losses if one of your employees or even yourself causes property damage or bodily injury to a third party. Most general liability insurance policies will be made of a few different types of coverages, but these can always be endorsed to create a solution that will be best for your particular needs and the risks associated with your company.

What Should Be Covered Under General Liability Insurance?

  1. Defense costs – The legal defense expenses in case of a lawsuit will be one of the biggest expenses you would ever face and need protection from. You will get legal counsel paid for and assigned by your insurer if you have general liability insurance.
  2. Medical Payments – The medical payments coverage will protect you from injuries at your business or other locations where your employees are doing business activities.
  3. Personal and Advertising Injury – This is the coverage that will protect you in case your advertising activities will lead to financial loss. Personal and Advertising Injury refers to situations in which your business is found liable for any financial losses a third party will suffer due to invasion of privacy, copyright infringement, libel, or slander.
  4. Property Damage – Any damages done by your employees or yourself to a third party as a result of your business activities will be covered by property damage coverage in the general liability policy.
  5. Bodily Injury – This type of coverage will pay if you are ever found liable for any injuries a third party will suffer as a result of your business operations.

What Won’t Fall Under General Liability Insurance?

Although you should expect a general liability insurance policy to offer you quite a wide range of coverages, some risks are outside of the coverage and will need individual, specialized policies. Among these are:

  • Intentional harm
  • Damage to customer property that you posses
  • Damage to your own property
  • Negligence

Who Should Be Covered by General Liability Insurance?

  • The business and its employees: This coverage will protect against any claims if your business activities will cause third-party damages or injury.
  • Wholesaler or manufacturer: The products sold by your business might have the potential to cause harm to third parties and any legal costs or damages will become your responsibilities.
  • Vendors: The organizations and individual people that will work with you to sell your products would also be protected from any potential lawsuits related to your products.

Risks and Benefits

Covering legal expenses: If a third party, employee, or client will file a lawsuit against your company, general liability coverage will protect you by covering expenses for damages or attorney fees.

Complying with regulations: To make sure some key risks are covered, you are sometimes bound legally to have liability insurance.

Peace of mind: Knowing that your company is protected against most worst-case scenarios, will make your clients and employees focus more on immediate matters.

Tips When Buying

General Liability Insurance ExplainedYou should consider these aspects when shopping for general liability insurance:

Compare quotes: The general liability insurance costs will usually depend on the insurer. Browse through several quotes before deciding on what are the best coverages and rates.

Find an independent agent: If you want to have some help navigating through the complex job of picking the right policy by getting experienced expertise in assessing the needs and finding the right broker to serve your particular industry, then you should go with an independent agent.

Identify your risks: Before going for a policy, make sure you have identified all potential risks of your business model by thoroughly analyzing all of the activities and operations of your company.

FAQ

How much General Liability Insurance should I really get?
Your insurance needs will be dependent on the risks related to your business, its location, size, and the industry you operate in. The usual coverage limits will usually fall between $1 and $2.5 million dollars.

What does comprehensive liability insurance mean?
This is just another name for general liability insurance, but one used less often. These two are no different one from another, although comprehensive makes it seem like it would be more complex.

Will I need general liability insurance?
You should get covered especially if your company’s activities include any of the ones below:

  • Using a client’s equipment
  • Using third-party locations
  • Representing your client’s business
  • Hosting clients on your premises or visiting the offices of clients

Conclusion

Getting general liability insurance will help you stay protected from financial loss caused by lawsuits against your business.

The general liability insurance cost will be determined by the actual needs of your company and the industry in which you are operating.

Alec Pow
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