How Much is General Liability Insurance for a Small Business? What You Need to Know to Get Started
Small businesses are up against all kinds of insurance risks. General liability insurance (GLI) is the first line of defense. We’re going to explain how much small business general liability insurance costs, the exposures it protects against, and 4 steps you can take today to safeguard your business.
What is General Liability Insurance?
First and foremost, general liability insurance protects your company against bodily injury and property damage claims, and defense costs. You may also hear it called business liability insurance or commercial general liability insurance.
It lays the groundwork of protection to manage insurance risks.
For example, a client slips and falls while on company property. After a hospital visit, they charge you for their medical expenses. General liability insurance can foot the bill of business-related injuries such as these.
General liability insurance can cover:
- Slander and reputational damage
- Injury
- Property damage
General liability insurance can be especially beneficial to small businesses because they can be targeted with frivolous lawsuits. Because of exorbitant defense costs, many small businesses choose to settle instead of going to court whereas larger businesses have the resources to fight lawsuits that have little legal basis.
How Much is General Liability Insurance for a Small Business?
General liability insurance costs depend on the coverage you want and the business you are in, so there is no one average cost that applies to all small businesses. However, ballpark estimates can be a good place to start.
According to Startup Savant, an estimate for businesses with less than one million dollars in annual revenue is $500 to $1200 dollars per year whereas small businesses with more than one million have an estimate from $1000 to $3000 per year.
These numbers pale in comparison to the average cost of $75,000 to defend and settle a single general liability claim, which 4 out of 10 small businesses are likely to be hit in the next ten years. It’s easy to see that a smaller annual payment can defend against a very real, larger financial threat specific to small businesses.
From this starting point, price varies based on other factors:
- Your type of business
- The number of square feet in your office
- Your business location
- Your claims history
The price for your coverage can increase simply by having an office in a certain territory: offices in NYC will have a more expensive plan than those in rural New York.
Read our article, Questions to Ask When Purchasing General Liability Insurance, for more detailed information on the cost of general liability insurance and what questions you may be asking about coverage such as
- How much coverage do I need?
- How will general liability insurance help my small business?
I Already Have Other Insurance for My Business. Do I Need General Liability Insurance?
If you are a business owner, you should have general liability insurance. General liability insurance is the broadest cover-all insurance you can purchase to protect your business, paying for defense costs and damages that your company may cause or be accused of causing.
Other business insurances are usually used to patch holes left in general liability insurance.
For example:
- Professional liability insurance can insure against missteps made with clients or an error in professional services. This can include advice said to a client that backfires and they hold your business accountable. For more of the nitty gritty on these differences, read our article, Do You Know the Difference Between General Liability and Professional Liability? on the topic.
- Workers’ compensation insurance, which covers payments for employee injury and is mandatory in New York; and
- Commercial auto insurance, which protects against damage and liability relating to your commercial vehicles.
4 Straightforward Steps to Protect Your Business Against General Liability Claims:
Make safety a priority in your business operations.
Keep your property well-lit and free of standing water. Make sure it’s up to code. The simple things are often overlooked but can go a long way in protecting your pocket. Additionally, have a standard operating procedure for hazards on your property to keep your employees and clients safe. That alone can reduce the risk of claims for physical injury and property damage.
Stay cordial in public relations.
Having a code of conduct can reduce slander or reputational damage, protecting your small business against one of the most financially draining lawsuits a business can face.
Test your products.
Making sure your products won’t harm consumers and do what they claim to do is a simple, critical step as a producer of goods.
Talk to one of Honig Conte Porrino’s general liability insurance specialists.
Put the expertise of our dedicated agents to work to find your remaining liabilities and get general liability insurance that balances coverage and cost to fit your company.
Why Should I Choose Honig Conte Porrino for General Liability Insurance?
- HCP has more than 100 years of experience. We work with businesses of all types, so we understand your liability challenges whether you’re a retailer or restauranteur.
- We’ll pair you with an agent who can protect against the risks you face—not just the ones you ask about.
- We’re entrepreneurs too and we’ll protect your interests as if they were our own because your business is our business.
- As an independent brokerage, we aren’t tied to any one insurance carrier. This lets us shop around for the right combination of coverage and cost regardless of the brand name.
In all, general liability insurance is a must-have for any business. At Honig Conte Porrino, our local, independent professionals are your personal advocates. We get you the best coverage and know the ins and outs of complex insurance policies, managing insurance concerns while you can focus on getting more items off of your to-do list.
Contact your dedicated agent to protect your small business and free up more of your precious time.
