General liability insurance is the cornerstone of all insurance coverages needed by any business. It should be the first coverage considered for your protection. Whether your business is a one-person operation or an established corporation, general liability should always be included in your insurance portfolio.
General liability insurance costs vary based on various factors. To make an informed decision, you must evaluate the risks of your industry and your particular business and find the policy to best cover your concerns and needs.
We Cover in This Guide
- How much does general liability insurance cost?
- What is general liability insurance?
- What is (and is NOT) covered under general liability insurance?
- Who is covered by general liability insurance?
- Benefits and risks
- Tips for buying
- FAQ
- Summary
- Types of insurance you may need
How Much Does General Liability Insurance Cost?
General liability insurance cost averages $500-$600 and is determined by your risk exposure. Insurers are typically most concerned about the following:
- Years in business
- Number of customers
- Annual revenue
- History of claims
General liability insurance cost also varies by industry.
What Is General Liability Insurance?
General liability insurance is what will financially protect your business in the event that you or your employees cause bodily injury or property damage to a third-party. Every general liability insurance policy consists of a core group of coverages, but can be endorsed to design an insurance solution that will meet the needs of your particular company.
What Is Covered Under General Liability Insurance?
Bodily Injury
This coverage pays when you are found liable for injuries to a third party as a result of your business activities.
Property Damage
The property damage coverage in your general liability policy pays for damages you or your employees cause to a third party as a result of your business activities.
Personal and Advertising Injury
This policy provides coverage if your advertising efforts cause a financial loss. Personal and Advertising Injury applies if your business is found liable for financial loss to a third party because of slander, libel, copyright infringement, or invasion of privacy.
Medical Payments
Medical Payments provide coverage for injuries to a third party at your business location or any other location where you or your employees are conducting business activities.
Defense costs
One of the greatest expenses associated with a lawsuit is the cost of your legal defense. Your general liability insurance provides for legal counsel that is assigned by and paid for by your insurer.
What Is Not Covered Under General Liability Insurance?
While general liability insurance provides wide-ranging coverage, certain risks are NOT covered and require specialized policies, including:
- Negligence
- Damage to your own property
- Damage to customer property in your possession
- Intentional harm
Who Is Covered by General Liability Insurance?
- Business and its employees: Protects against claims if business operations cause third party injury or damages.
- Wholesaler or manufacturer: The products businesses sell have the potential to harm third parties and you may be responsible for damages and other legal costs.
- Vendors: The people and organizations you work with to sell your products are protected from potential lawsuits related to the product itself.
Benefits and Risks
- Peace of mind: General liability insurance coverage allows your employees and clients to focus on immediate matters because they know that the company is protected from the worst case scenario.
- Comply with regulations: You are often legally required to have liability insurance of some kind to cover key risks.
- Cover legal expenses: If a client, employee, or third party files a lawsuit against your business, general liability insurance will cover the expenses, including attorneys fees and damages.
Tips for Buying
When considering general liability insurance, consider the following:
- Identify your risks: Be sure to thoroughly analyze the operations of your business and identify potential risks. After that, choose all the coverages you need.
- Work with an independent agent: An independent agent will help you navigate the complexities of picking the right policy by assessing your needs and directing you to the broker that best serves your industry.
- Compare quotes: General liability insurance costs vary between insurers. Consider several quotes to find the best rates and coverage.
FAQ
Do I need general liability insurance?
If your company’s operations include any of the following, you should get covered:
- Visiting client's offices, or hosting clients at your property
- Representing your client’s business
- Using third-party locations
- Using a client’s equipment
What is comprehensive liability insurance?
It is an infrequently used name for general liability insurance. While the name makes it sound like a more complete policy, it is actually no different.
How much General Liability Insurance do I need?
Insurance needs depend on your company’s industry, size, location, and risks. Common coverage limits are between $1 and $2 million dollars.
Summary
General liability insurance protects your business against potential financial ruin from lawsuits relating to your business activities.
By understanding the needs of your company as well as your industry, you can determine your general liability insurance cost, and know that your policy covers potential risks and feel secure that your business is protected.
All Types of Insurance You May Need
General liability insurance is a limited policy and there are many risks that are not covered. Some of the other policies that should be considered by every business owner are:
- Workers’ Compensation: If you have at least one employee, your business is responsible to pay for the costs associated with an injury or illness that is work related.
- Professional Liability: If you are a professional in your industry or required to be licensed to operate, your general liability will not pay for losses associated with your professional services to a customer.
- Commercial Auto: Most personal auto policies exclude coverage on vehicles while they are being used for business. Commercial auto insurance will provide coverage for your business vehicles.
- Inland Marine: Contractors operating with only general liability insurance do not have coverage for tools and equipment without an inland marine policy.
- Cyber Liability: Data breaches have become common and are very expensive for any victimized business.
