If you are a business owner, you know there are lots of expenses to keep your doors open and the lights on, but one thing you shouldn’t skip out on is general liability insurance costs. This kind of insurance shields your small business from claims that it induced harm or was the source of damage to someone else. Oftentimes, the annual cost of general liability insurance for small business comes out to less than the total bill of a claim. A worthy investment, indeed!
General liability insurance can also be known as “commercial general liability insurance” or “comprehensive liability insurance” (CGL). It is also known as well as “business liability insurance.” All these terms cover the type of insurance you need to keep your small business protected by keeping money in your bank instead of paying the cost of the claims out of your own pocket.
Breaking Down The Cost Of Small Business Liability Insurance:
Get ready to do some math. A small business liability insurance cost factors in a few things, namely the following:
- The kind of small business you operate.
- The revenue generated by your business.
- The location of your business, including the state.
- The number of employees you have on payroll.
- The policy details, such as deductibles, coverage limits, etc.
Planning to spend between $40-$100 per month on GLI is a good rule of thumb for business owners. According to a recent study by Insureon, 28,000 small businesses that were surveyed and bought policies with the insurer were found to have their liability insurance for a small business cost a median of $500 per year, breaking down to roughly $42 a month. [1]
The good news is that your small business general liability insurance costs generally won’t increase with the amount of coverage you buy. So if you purchase two times the amount of coverage, that means you won’t see your premium doubled for your small business liability insurance costs every month.
From state to state, the general liability insurance cost for small businesses varies, so you’ll want to do some digging and get a quote based on your needs and place of business operations.
What Types Of Claims Does General Liability Insurance Cover?
There are five types of claims that most general liability insurance policies cover for small businesses:
1. Bodily Injury
If someone is in your small business and happens to get hurt while there, general liability insurance can aid in covering the cost of the harmed person’s medical bills.
2. Property Damage
Should a customer’s property be damaged by you or an employee–for example, while out on a delivery of products from your business–a comprehensive general liability insurance policy can assist with paying for those damages.
3. Reputation Harm
Slander, libel, privacy violations, malicious prosecution, and wrongful evictions can all take a toll on your small business if you don’t have one or more policies protecting your workplace.
4. Advertising Plagiarism
Copyright infringement can stop your business in its tracks, even if it was found to be unintentional. Having a general liability insurance policy helps cover and protect your small business against these types of claims.
5. Rental Damages
Fire and other destructive forces could damage a property you are renting for your business. However, a comprehensive general liability policy will ensure you have funds to pay for the repairs that aren’t out of pocket.
It’s important to remember that liability insurance won’t cover everything, including flooding, worker’s comp claims, car accidents, injuries to employees. It will also not cover intentional acts or professional mistakes, and in the majority of states, punitive damages.
Ways to Manage Your General Liability Insurance Cost
You can manage your general liability costs and try to save money by shopping around for the best rates. With specific carriers, make sure that you have a safety program in place to help keep claims down. The fewer claims that you have, the lower your cost of liability insurance will be. Talk to your insurance agent about other things that can help you save on costs that include security systems that might qualify you for policy discounts.
Why Pay The Liability Insurance Cost For Small Business:
There are many reasons you’ll want to protect your small business–now and in the future. Having general liability insurance for your small business is essential if it is:
- Applying for work contracts.
- Hiring temporary employees.
- Open to clients, vendors, and the public at large.
- Advertising with original marketing campaigns or materials.
- Utilizing social media, both professionally and in your personal life.
- Requiring a third-party location to conduct essential operations.
Where To Purchase Low-Cost Small Business Liability Insurance:
Getting a quote from an agent is the best thing you can do to anticipate how much it will cost. You will also know how much your business will end up spending every month. Lots of insurance companies are there to help you calculate the cost of liability insurance for your small business.
In the vast world of insurance, two companies that are worth researching and contacting are:
- Nationwide – not only does Nationwide have an online portal to get a quote for your general liability insurance costs, but they have an entire resource center dedicated to providing coverage and resources to businesses.
- Hartford – with over 200 years of experience in the insurance game and over 1 million small business customers, Hartford has the numbers, history, and know-how to keep your small business liability insurance cost at a minimum.
As a business owner, it’s important to do your homework to find out how much general liability insurance your business can afford and what type of coverage is right for you and your employees.
Just be sure to compare price points and review policies before making your final decision.
