There are many things to consider when you are a business owner, no matter how big your business is or what goods or services you provide. One of the biggest things that often gets overlooked is general liability insurance. It’s imperative to factor this business insurance into your budget when setting up your company’s finances.
Before looking at the cost of general liability insurance for small businesses, here’s an overview of why you should have it.
Why General Liability Insurance?
General liability insurance is very important for small businesses as it can protect them from financial losses arising from property damage, bodily injury, or advertising injury claims.
Small businesses face many risks, and even one accident or lawsuit can have serious financial consequences that can jeopardize the business’s future.
With general liability insurance, small businesses can have peace of mind knowing they have protection against many common risks. This type of insurance typically covers legal fees, settlements, and judgments that result from covered claims.
General liability insurance can also help small businesses build trust with their clients and partners. It shows that the business is financially responsible and takes its obligations seriously.
Overall, general liability insurance is an essential investment for small businesses that can help protect their financial future and reputation. It is recommended that small business owners consult with an insurance professional to determine the appropriate coverage needed for their specific business.
If you are in the process of setting up your budget, there is one central question that must be on your mind: exactly how much does general liability insurance cost? The answer to that varies, and hopefully, this guide will give you a better idea about what to look for to adequately cover your business.
So, let’s talk about liability insurance.
What is Liability Insurance?
Liability insurance is the best way to ensure your company is covered in the case of damages or accidents. There are more specific versions of liability insurance, but general insurance is the best way to protect yourself from common issues.
Some of the main things that general liability covers are events like property damage, personal injury claims, and bodily injury claims. These sorts of events could potentially jeopardize and hurt the success of your business.
Liability insurance is critical because accidents can and will happen. You must ensure your business is covered for false and valid claims. Insurance can save your business from false claims and minimize the damage from true ones.
Most general liability insurance plans, particularly for small businesses, cover the cost of third-party lawsuits from minor accidents and property damage.
What Should You Be Paying for General Liability Insurance?
The price of your insurance plan depends on many factors, such as the business location, the number of employees, the type of business, and the typical risks that your business is exposed to or associated with. For instance, construction jobs, like roofers or electricians, have a lot more risk associated with their work than, say, an office administrator with a desk job.
In our increasingly tumultuous society, businesses can frequently be sued for things they have not done or things that are not considered harmful. Lawsuits associated with libel, slander, and property damage are becoming more and more prevalent. Most general liability insurance plans have coverage for these events.
Ultimately, you should be paying for liability insurance should an accident happen or you need coverage if someone were to sue your business. This amount should reflect your business and interests, as there’s no one-size approach to a liability insurance payment plan.
So, How Much Does It Cost?
Plans range in coverage and, as mentioned, also vary in price based on various factors. Monthly payments can range from as low as $30 monthly for small, relatively risk-free businesses; however, your business may pay more.
A survey found that 95% of small businesses pay less than $50 per month, but 1% pay more than $100 monthly. Forbes says most small businesses choose $1-2 million coverage for less than $50 per month.
According to the Small Business Association, the typical cost for the average-sized business general liability insurance is approximately $60 to $170 per month or annual fees of $750 to $2,000.
For small businesses with less than 10 employees, the average insurance cost is usually around $30 per month. This is all a general average of a select number of small businesses, but the middle rings true.
Ultimately, the question of the cost of general liability insurance for small businesses depends on the nature of the company and the factors that go into the specific coverage.
Many plans are customized for the business, so the cost for one company will differ. Researching and knowing what kind of coverage you want and need to protect your business without breaking the bank is essential.