General Liability Insurance: We Break Down How Much it Costs

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How much do you pay for general liability insurance? Are you looking to lower your general liability insurance cost? As a business owner, it's your job to manage your expenses while still protecting your business from the risks it faces. In this guide, we explain what general liability insurance is, what it costs, and what impacts the cost of a business liability insurance policy.

How Much Does General Liability Insurance Cost?

General liability insurance costs will vary depending on numerous factors, but here are what a few insurers are saying:

  1. In 2019, small business owners paid an average of $53 per month for general liability insurance with Progressive.
  2. Insureon claims that the median cost of general liability insurance is $42 per month (or $500 annually).
  3. Hiscox surveyed 50,000 business owners and found that costs fall around $30 per month. for general liability insurance. 

The average cost does vary for small businesses, but the general range is between $30–$60 a month.

What Does General Liability Insurance Cover?

General liability insurance—also known as “slip and fall” insurance—provides coverage for the following risks many small business owners face:

Third-Party Bodily Injury 

If a customer is injured on your premises or at your worksite, you can be held liable for their medical costs, which is why this policy is a necessity. 

Example: Your employee has just finished mopping some sticky floors after a child breaks a jar of jelly. You have the “wet floor” sign out, but a customer enters the aisle from the other direction and doesn’t see it. They slip and fall and get a concussion. Your general liability insurance coverage will pay their medical costs and legal expenses if the customer files a lawsuit. 

Third-Party Property Damage

If any of a customer’s property is damaged you are also usually held liable for replacement or repairs.

Example: Using the same customer from the previous example, when they fall they land on their smartphone and it’s destroyed. General liability insurance will pay to replace their damaged phone. 

Personal and Advertising Injury

A general liability policy pays for your legal expenses if you’re sued for slander, libel, or copyright infringement.

Example: You make a job at a competitor in one of your commercials. You thought it was vague enough, but they sue you for slander. Your general liability insurance policy can help cover the legal expenses and potential settlement. 

Product Liability

Any company whose business operations manufacture, distribute, or sell products is at risk of said product malfunctioning or causing an illness. If this occurs, you can be sued for the injury or illness. This coverage is often included in general liability, but a more robust product liability insurance can be purchased. 

Example: You recently discounted some meat because it was getting close to its expiration date. Unfortunately, some of your customers get sick after eating the meat and it’s traced back to you. You’re held liable for their medical expenses, time off of work, and the lawsuits that are filed for your negligence. 

All of these circumstances are just a few examples of why your small business needs this important coverage. To learn more about general liability and what it covers, check out our comprehensive guide to general liability insurance

What Isn’t Covered by General Liability Insurance?

A general liability insurance policy does not cover professional errors, employee injury, or damage to your property. 

What Impacts the Cost of General Liability?

  • Business Location: The rates you’ll pay for your premiums vary depending on what state you’re located in. If you’re in a densely populated area with higher incidences of claims it will also raise your costs. 
  • Claims history: The more claims that are on your “record” the more you’ll pay. 
  • Exposure: What industry are you in? Something that has a higher risk of claims will cost you more to insure. 
  • Employees: Having more employees also increases the chance of an injury or a lawsuit, which can increase your premiums.

These are just a few of the factors that can impact the rate you’ll pay for general liability insurance. 

How to Lower Your Insurance Premiums

You may not be able to change your location or the number of employees you hire, but there are a few things you can do to mitigate the cost of your business insurance. What are they?

Adjust Your Coverage Limits and Deductibles

If you want an insurance policy that has higher overage limits, you can expect the insurance cost to increase. Conversely, you'll pay less if you choose lower limits. The most common general liability policy is a $1 million/$2 million policy. What does that mean?

  • $1 million per occurrence: The insurance company will pay up to $1 million for a single occurrence/claim as long as your policy is active. 
  • $2 million aggregate: The insurance company will pay up to $2 million to cover claims that occur while the policy is active. 

Choosing a higher deductible is another way to cut your premium. If you can afford to pay a higher out-of-pocket cost per occurrence, consider going this route to save money on your business insurance.

Implementing safety standards in the workplace

Another way to lower your costs is to lower the number of claims you’re submitting. A great way to do this is to implement safety standards (policies and procedures) and a risk management program to limit potential problems. A well-trained staff can be the best way to safeguard your employees—and your business. Different professional services and industries carry different risks, so make sure your company is doing whatever it can to protect its employees and customers.

Bundle your Insurance Policies

Some insurance companies will allow small businesses to bundle general liability coverage with commercial property insurance in a Business Owners Policy (BOP). This package can also include business interruption insurance and other industry-specific coverages. It’s often a more affordable price than purchasing these commercial insurance policies separately. Please note that it may not be available to all businesses or with all carriers.

Pay Your Premiums Upfront

Are you able to pay your annual premiums upfront? If you’re able to do so, many insurance companies will offer you a small discount on your overall policy. It’s a great and simple way to pay less for general liability insurance. 

Discounts

Check with your insurance company to see what other discounts they might offer on general liability insurance costs. They’ll often discount the purchase of another insurance policy if you’re an existing customer. You may be surprised what’s available—and all you need to do is ask!

Get a Free General Liability Insurance Quote

Are you looking to lower your general liability insurance cost? If you're looking for general liability to include in your small business insurance package, look no further. Our knowledgeable agents are on standby to help you make sure you have the right insurance to protect your business. To get a free quote, complete the form at the top of the page or call us Monday–Friday at 877-907-5267. We'll help you find and tailor a plan to your specific business and insurance needs.

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