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How much does business liability cost?

How much does business liability cost?General business liability insurance can cost anywhere from $500 a year to $5,000 a year and even more depending on many different variables.

It isn’t easy to simply say how much your insurance will cost because so many variables are used to determine how much the insurance company will charge you for your businesses liability insurance.

To get insurance quotes simply enter your zip code into the free rates tool provided!

If you aren’t sure what general liability is, whether you need general liability insurance or you aren’t sure whether you can afford liability insurance keep reading and find the answers to your questions.

What is general liability insurance?

General liability insurance is primarily insurance that covers any medical costs that occur if someone is injured while on your property. Liability insurance isn’t about negligence, although if negligence is proven you could face a much larger problem, but more about the any type of accident.

This isn’t all that general liability insurance covers:

  • If someone is injured while on your property and chooses to sue you, then your liability insurance will cover your law fees in addition to any medical costs that are incurred as a result. This will include rehab, home care and any other necessary care that arises as a result of the accident.
  • Liability insurance will protect you from faulty products. This type of liability insurance may be included in a general liability policy or you may have to purchase a separate product liability insurance policy. It is important that you read through your liability insurance policy carefully so that you know exactly what’s covered under the policy.
  • The actions of you or your employees in the office or while in the field conducting work directly associated with your business. It is unfortunate, but employees misbehave. If your employee enters a clients home under the pretence of business and harms the client or steals their property, etc. your company can be held liable. Liability insurance will pay for any legal fees, damages and so on, although you can attempt to collect from the employee in question in your own law suit if you choose to.
  • Services outside of an office setting- your liability insurance will provide you with coverage if something should happen in the course of doing your job. For example, if you are a photographer, you are setting up your gear, and your equipment falls over injuring your client, then your liability insurance will cover the costs of any medical care or legal fees.

In addition, if your services or products don’t meet the expectations of your clients or customers and they sue you, liability coverage pays for those fees as well. To clarify, if you are sued for $1,000,000, your insurance company pays that $1,000,000 providing you have $1,000,000 of coverage. This is more than coverage for medical costs or legal fees, this pays the final bill as well.

Do you need general liability insurance?

The short answer to this is a resounding yes! If you are a business owner that provides products or services to other people, then you must have liability insurance. Okay, you aren’t required by law to have liability insurance in most states, but this doesn’t mean that it isn’t important.

If you got a small business loan for your business, your lender may make it a requirement for you to carry liability insurance. The reason for this is that if something happens, they want to ensure that you don’t go out of business and default on your business loan. In this case, they may require you to carry a specified amount of liability insurance, often twice the amount of your loan.

Think about it this way. If tomorrow someone were to walk up your steps and fall and break their leg because one of steps is wobbly, could you afford to pay their medical costs? Take that a step further and assume that this is the second person who has fallen on your steps; can you afford a lawsuit as well for negligence? If the answer is no, then it is time to purchase liability insurance.

General liability insurance is your peace of mind insurance. It is the insurance that you need to ensure that no matter what happens, especially with things that are out of your hands, that you have financial backing to cover those issues.

If your company uses vehicles to transport goods, you will be required by law to have liability coverage on those vehicles. When you purchase your liability insurance, look for cross over coverage and eliminate those items from your policy with exclusions. The reason you want to do this is because you don’t need to pay for the same coverage twice, that doesn’t make sense.

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Can you afford liability insurance for your business?

The real question might be whether you can afford not to have liability insurance for your business. The problem that many businesses face in a tough economy is having to make the decision to cut corners. The cost of business insurance may seem steep.

If you are considering not purchasing liability insurance or cutting it from your monthly bills, you need to consider options for reducing your premiums rather than dropping this valuable insurance altogether.

Your first consideration should be the amount of coverage you choose. You can choose liability insurance coverage for as little as $20,000 or as much as $100,000,000 or even more depending on the size of your company and the value of your product or services.

If your premiums are too high or the cost would be too high for the amount of coverage that you want, then consider lowering the amount. It is better to have some than not at all. In this case, however, if you are sued for $1,000,000 and you only have $500,000 worth of coverage, then you will be responsible for the other $500,000.

The good news is that most lawyers will only sue companies for the amount of their insurance policies. The reason for this is that they know that this is a guaranteed amount should they win their case. They also know that if they bankrupt your business in an effort to get more money, they won’t see any extra money from the lawsuit. In fact, there are many lawyers who won’t take a case if the person or business being sued doesn’t have liability insurance.

Some other ways to reduce your cost:

  • Increase your deductible. You can choose small deductibles, such as $500 or $1,000. With liability insurance, however, you can also choose much higher amounts, like $10,000 or $20,000. It is important that your deductible not be so high that you can’t afford the out of pocket expenses.
  • Reduce your risks. This is a more difficult task, depending on what type of business you have, however, by requiring background checks for all of your employees; you can reduce your risk of employee misbehaver, which can save you money.
  • Shopping around. This is an excellent way to ensure that you get the best price for your liability insurance. Using our free insurance quotes tool, which is available by link at the top of the page, will help you find the best price for the insurance that you need.

Getting quotes allows you to compare the prices and information from several different companies in a single location. You can use this information to determine who has the best offer for you and your business.

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