The average cost of general liability insurance premiums for small businesses is $500 annually.
However, this is only an average general liability insurance cost, it may not reflect what you will actually wind up paying on insurance for your business.
There are many different variables about your business that go into determining the exact cost of general liability insurance for your business. But it’s not as complicated as it may sound.
In this post, we’ll go over some of the most important factors used by insurers to determine the cost of general liability insurance for each business.
Keep reading to learn more.
The Size of Your Business
One of the big things that helps to determine the cost of your general liability insurance is the size of your business. Insurers often determine this based on the number of employees that work for you.
The more employees you have, the higher the chances that one of them will make a mistake and that could lead to someone getting injured and suing your business. Insurers will consider this riskier and therefore will charge you a higher premium.
They will also look into your business’s annual income. In the insurer’s eyes, businesses with higher annual incomes are riskier to insure because the more income you earn the more incentive someone has to sue you.
Also, if you have a higher income it’s likely because you work with many different clients. Again, the more clients you have the more chances to be sued.
The Risk Level of Your Industry
Different industries have different levels of risk with regard to someone getting hurt. For example, the risk of a client or worker getting hurt at a construction site is much higher than the risk of someone getting hurt at a retail store or in an office building.
Insurers will charge more for insurance for those businesses that are considered riskier. This goes for both general liability and workers comp. While they’re very similar they do have some distinct differences. The biggest difference is the focus of the insurance. Namely, the focus on customers and outside issues for general liability vs workers comp which is there to help the employees if they’re injured.
History of Claims
A red flag for insurance agents is if your company has had to file one or more claims in the past or if you’ve had lawsuits brought against you. While this doesn’t necessarily mean you’ve done anything wrong, it will increase your general liability insurance cost.
On the other hand, if you have a clean history, you will seem like a safer bet and your insurance will cost less. This is especially true for businesses that have been operating for a long time without any claims.
Learn The Cost of General Liability Insurance
The cost of general liability insurance will be determined by the history and characteristics of your business. But whatever the cost, general liability insurance is not something you can afford to skip.
For more like this, check out the articles in our business category!
You May Also Read This Post: Easy Ways Your Business Can Improve Phone Customer Service.