The required coverage amount varies based on business size, industry, and risk factors. A typical policy offers coverage limits of:
- $1 million per occurrence (per claim coverage)
- $2 million aggregate (total coverage for a policy period, usually one year)
Larger businesses or those in high-risk industries may require higher limits.
How Much Does General Liability Insurance Cost?
The cost of GLI varies based on several factors, including:
- Business Industry: Riskier industries like construction have higher premiums.
- Business Size and Revenue: Higher revenue and more employees increase costs.
- Location: High-risk areas may have higher insurance rates.
- Coverage Limits: Higher coverage limits lead to higher premiums.
- Claims History: Businesses with previous claims may face higher premiums.
- Deductibles: Higher deductibles reduce premiums but increase out-of-pocket costs in a claim.
On average, small businesses pay between $400 and $1,500 per year for GLI.
How to Choose the Right General Liability Insurance Policy
When selecting a policy, businesses should consider:
- Coverage limits: Ensure adequate financial protection.
- Policy exclusions: Understand what is not covered.
- Insurer reputation: Choose a financially stable insurer.
- Additional coverages: Consider endorsements for extra protection.
Conclusion
Business General Liability Insurance is a fundamental safeguard for businesses against lawsuits, accidents, and unforeseen financial losses. By understanding coverage options, costs, and risk factors, businesses can choose the right policy to ensure long-term security and success.
