General Liability Insurance Cost (2024)

FAQs

General Liability Insurance Cost? ›

On average, general liability insurance costs $42 per month, or about $500 annually. Most policyholders can expect to pay a premium between $30 and $60 per month for their general liability insurance coverage.

Insurance companies look at several factors when determining your general liability cost. Things like the amount of risk your business faces and your claims history can influence your cost. Typically, small businesses that face more risk pay more for insurance.

On average, Insureon customers pay $42 per month, or about $500 annually, for a $1 million general liability insurance policy. Additionally, 29% pay less than $30 per month, and 40% pay between $30 and $60 per month. Customers who need more coverage will likely pay a higher premium.

General liability premium is calculated using a combination of industry classification codes, claims history, payroll, business revenue, and an insurer's own proprietary methods.

How much is a 2-million dollar insurance policy for a business? On average, an insurance policy that offers coverage for up to $2 million can cost about $30 a month in premiums.

Rates for general liability and other lines of coverage are typically priced by percentage of a business factor. For most businesses, GL insurance rates are priced per $1,000 in gross sales or revenue. For many contracting companies, it is priced per every $1000 in payroll.

Your personal history of making car insurance claims and your track record for paying your bill on time can both impact your premium rates. Multiple claims make you look like a risky driver, resulting in higher car insurance costs. And you might pay more if you have not maintained continuous car insurance coverage.

As a rule of thumb, general liability insurance typically covers physical damage to your business, whereas professional liability insurance—also called errors and omissions (E&O) insurance—often concerns libel, slander, misrepresentation, negligence, and inaccurate advice.

What does general liability insurance cover? General liability insurance policies typically cover you and your company for claims involving bodily injuries and property damage resulting from your products, services or operations. It may also cover you if you are held liable for damages to your landlord's property.

Most small business owners choose general liability coverage limits of $1 million per occurrence and $2 million aggregate for each policy period. Both limits can impact your business operations.

How much is a 5 million dollar business insurance policy? ›

Generally, it costs about $40 per month for each $1 million of additional coverage you buy. For example, raising the limits on your general liability insurance from $2 million to $5 million might cost an additional $120 per month over the cost of the underlying policy.

The minimal amount covered, according to this formula, must be a multiple of annual revenue multiplied by age. People in their 20s and 30s, for example, need life insurance coverage of 25 times their annual wage, whereas those in their 40s and 50s can get life insurance for 10-15 times their annual income.

General liability covers physical risks, such as bodily injuries and property damage. Professional liability insurance covers more abstract risks, such as errors and omissions in the services your business provides.

The average monthly cost for a million-dollar life insurance policy is anywhere from approximately $50 to more than $1,000, depending on your age, health, annual income, policy type and other factors.

For example, a $500,000 term life insurance policy might cost around $18 to $70 per month, depending on age, health, and smoking status.

Umbrella policies typically start at $1 million in liability coverage. According to an ACE Private Risk Services report noted by Forbes, the average cost a $1 million personal umbrella policy is $383 per year for an individual with one home, two cars, and two drivers.

While premiums have continued to increase during this period, the pace was moderate compared to previous years. Industry data indicates that average premium increases fluctuated 6% to 7% in 2022 and 4% to 5% in 2023.

The continued impact of catastrophic events is a major factor driving up costs, along with the increasing cost of capital, financial market volatility and inflation. This is an expense carriers need to pass along to customers.

A $5 million umbrella policy costs around $375 to $525 per year, on average.

Liability insurance is an essential coverage for small business owners. It helps protect you from claims that your business caused bodily injury and property damage. The importance of liability insurance is that every business faces claims that can come up during normal operations.