Liability insurance how much does it cost

No partner can guarantee placement or favorable reviews on AdvisorSmith. The average cost of commercial general liability CGL insurance in the U. General liability insurance is a core insurance coverage that provides financial protection for businesses if a customer, vendor, or other third party suffers property damage or bodily injury that is caused by a business. In this study, AdvisorSmith analyzed the average cost of general liability insurance for small businesses using estimated quotes, rate filings, and actual premiums paid.

AdvisorSmith determined the average costs for general liability insurance by using estimated quotes, rate filings, and actual premiums paid from a representative sample of small businesses and insurance companies around the country. The average cost of commercial general liability insurance in the U.

General liability insurance is a core component of insurance coverage for small businesses, providing financial protection in the event that a small business causes bodily injury or property damage to a customer, vendor, or other third party. Because the risk of property damage or bodily injury varies widely and is strongly dependent upon the type of business, one of the primary drivers of insurance cost is the industry in which a business operates.

For example, a business consultant who works in an office and has relatively few walk-in clients will have a much lower chance of a bodily injury or property damage insurance claim when compared with a roofing contractor, who is exposed to more risk.

In this case, the business consultant will have lower premium costs to reflect the difference in risk level. The table below lists the average insurance cost in a selection of industries as studied by AdvisorSmith.

AdvisorSmith calculated average insurance premium prices from eight major insurers by reviewing rate quotes for small businesses in 10 industry categories. We also considered two business sizes:. Premium rates varied widely between industry categories and by insurer. While a small retail business may only pay a few hundred dollars annually, a contractor like a plumber may pay upwards of a few thousand dollars.

In addition to the type of business, another major factor in the cost of general liability insurance is the limit of coverage that is chosen by a business owner. The limit is the maximum amount that an insurance company will pay in the event of one or more claims.

For general liability policies, the limit is commonly expressed per occurrence and in aggregate. The per occurrence limit is the most that the insurance company will pay for any single claim, and the aggregate is the most that the insurer will pay for all claims during a policy year. Generally, the higher the limits on a policy, the more expensive the premiums will be. However, adding additional coverage usually costs less on a per-dollar basis compared with the base coverage cost.

In the table below, we show the effect of changes in the limit of coverage for a sample business in the state of Iowa with moderate risks. These averages were created using premium quotes and insurance filings from major insurance companies in the state of Iowa. Actual premiums will vary based upon the type of business, location, business revenue, and other factors. The most important factor in determining the cost of general liability insurance is the type of business that a company conducts.

The type of business is what determines the amount of risk exposure a business presents to an insurance company. Premiums will generally reflect the nature of the business that is insured. Businesses with low exposure to property damage and bodily injury risks are primarily businesses that perform office work.

In these businesses, a relatively small number of clients or vendors visit, and the businesses themselves do not produce physical products. These industries include financial services, consulting, technology, legal, and professional services. These types of businesses will have the lowest premiums for general liability insurance. The next tier of businesses has low-to-moderate exposures. These businesses may interact with a limited number of clients outside of their primary place of work.

These industries include personal care, photo and video, real estate, and sports and fitness. Premiums for these businesses are still relatively low but higher than those of office work businesses. Businesses that interact with many customers, work in client locations, handle client properties, or sell products to end-users typically have moderate-to-high risk exposures. The cost of general liability insurance depends on a variety of factors, including what industry you work in and how much coverage you need.

Businesses typically need general liability insurance regardless of what they do. You can buy this coverage on its own or as part of a business owner's policy. Shop around to find the best rates and fit for your business.

General liability insurance helps protect your business when a third party or their property is harmed in your normal course of doing business. The riskier the industry your business operates in, the higher your general liability insurance costs are likely to be.

For instance, a retail store with multiple storefronts is more likely to incur slip-and-fall claims than a web designer working out of her home, since there are places for those accidents to happen. According to Insureon, general liability insurance premiums for its customers are highest for construction and contracting businesses, cleaning services and landscaping companies. Premiums are lowest for photographers, videographers and IT professionals. Policies with higher limits will charge higher premiums, and smaller policies typically come with smaller premiums.

A larger deductible typically translates to lower premiums, too. From an insurance perspective, every employee who works for your business presents a risk.

The more drivers a delivery service has, for instance, the more opportunities those drivers have to crash. So as your business grows, your general liability policy may need to grow too and may become more expensive as a result.

Most business insurers sell general liability insurance in two ways: on its own and as part of a package with other kinds of coverage. For many business owners, buying a business owner's policy, or BOP, may make more sense than buying general liability coverage by itself. In general, BOPs include general liability insurance, commercial property insurance and, most of the time, business interruption insurance.

Get quotes from several business insurance companies to find the best policy for you.