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 kind of business insurance into your budget when setting up your company’s finances.
If you are in the process of setting up your budget, there is one major 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 properly cover your business.
So, let’s talk about liability insurance.
What is General Liability Insurance?
Liability insurance is the best way to make sure 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 give yourself a blanket of protection 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 incredibly important because accidents can and will happen. It’s critical that you make sure your business is covered for both false and true claims. Insurance can potentially save your business in the instance of 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 that they have not done, or things that are not actually 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 the size of 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 a variety of factors. Monthly payments can range anywhere from as low as $27 a month for very small, relatively risk-free businesses to thousands of dollars a month for bigger ones.
According to the Small Business Association, the typical cost for the average small business general liability insurance is approximately $60 to $170 per month or annual costs of $750 to $2,000.
For very small businesses with less than 10 employees, the average cost of insurance is usually around $30 per month. This is all a general average of a select number of small businesses, but the average rings true.
Ultimately, the question of the cost of general liability insurance for small businesses depends on the nature of the business and the factors that go into the specific coverage.
Many plans are customized for the business, so the cost for one business will differ from another. It’s important to do some research and know what kind of coverage you want and need to keep your business protected without breaking the bank.