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General Liability Insurance Prices
Without general liability insurance one mistake could put you out of business. Most business owners consider it an absolute must. General liability insurance protects your company's assets if you're sued for causing personal injury or property damage. If you're sued over a defective product, for example, the insurance company covers the damages or settlement fees and attorney fees.
Even a small mistake can lead to a big lawsuit. Lawsuits are increasingly more common in today's society. Given the relatively low cost of a general liability policy, you really can't afford to be without one.
General Liability Insurance Average Costs
General liability insurance is surprisingly affordable. Most policies cost less than $1,000 per year. A $1 million policy costs $300 to $1,000 per year. While, $2 million worth of coverage will cost an average of $500 to $1,300. A $5 million dollar policy will run $700 to $1,500 per year.
There are exceptions, of course. Businesses with a greater risk of causing personal injury or property damage will pay more. For example, contractors or landscaping companies will pay on the higher end of the price ranges above. Businesses with little risk, such as retail shops or photo studios, will pay less.
You have the final say in the amount of coverage you purchase. But insurance companies will make recommendations based on a number of factors. Some base the coverage on the size of your company's assets, while others base the coverage amount on the size of lawsuits companies that are similar to yours have faced.
How Much General Liability Insurance Coverage Do You Need?
Risk is the single biggest factor in determining how much coverage you need. No one anticipates accidents or mistakes. But, some companies are just more prone to them due to the nature of the businesses. A roofing company has a far greater likelihood of an accident than a clothing boutique. An insurance company will also look at your past record in setting general liability insurance rates. If you've had accidents or faced lawsuits in the past then expect to pay more.
Location is another important factor in determining the proper amount of coverage. Some states tend to award higher damages in personal injury and liability cases. If it's not uncommon to hear about a $1.5 million personal injury suit in your location for your type of work, make sure you have at least that amount of coverage. It's always better to err on the side of a little extra coverage, particularly given that the difference in annual premiums is minimal.