Without requesting quotes, it’s difficult to gauge how much general liability insurance coverage will cost you because so many different factors determine the price. If you’re shopping around for the right provider/policy, knowing how the cost is calculated will give you a reasonable ballpark estimate of what it should cost to cover your business.
Your Industry’s Associated Risks
As you may guess, some industries like a tree removal service, for example, may come with more risk than say someone who works in video production from their home office. General liability insurance covers damages done to other people’s property by your business. When considering the cost of insurance, how much time you spend on other people’s property, and how much time people spend on your property are all things that are taken into consideration when building your insurance quote.
The Extent of Your Exposure
Your annual revenue and the number of customers you take care of are also considered when building your general liability insurance quote. If you’re a busy restaurant, your liability insurance premiums may be higher as you’ve got a consistent rotation of customers, adding to the risk of liability.
Your Geographic Location
It costs more to insure a business in highly populated areas. This is because general liability insurance is all about the amount of risk your business may be responsible for causing harm to a third party. The more people around, the more customers you have, the more money your insurance will be. The fewer people around, the less likely your business will be responsible for causing damages.
How Many Employees You Hire
Another factor that goes into your general liability quote is the number of employees you hire. More employees can typically result in higher premiums rather than the other way around.
Your Business History
The longer you’ve been in business and have maintained a record for filing little to no claims on your general liability insurance is another consideration that can help to build you a better quote. Businesses that have been accident-free for many years can start seeing a discount on their premiums. Showing your insurance provider you’ve got the experience and haven’t filed any claims is a great way to keep your insurance premiums at a lower rate.
Your Chosen Deductible
The amount you choose to pay as a deductible is another factor that will influence your general liability insurance costs. Typically, when you decide to take a smaller deductible plan, you’ll have a higher premium. If you can handle paying a more substantial deductible in the case that you need to file a claim, you may be able to see lower premium rates.
Your Coverage Limits
Your coverage limit is also a significant factor that comes into play when pricing out your general liability insurance coverage plan: the more coverage you choose, the higher your premiums. Just like in car insurance, you can select the limit of coverage.
A common choice for general liability policy is a one million/two million policy. A plan like this provides one million dollars in coverage to a single claim while the plan is active. Also, while the policy is active, the agency will pay up to a grand total of two million dollars to cover any claims within the policy year.
The Risks Outweigh the Costs
While you may like to brush off the idea of needing general liability insurance, the truth is accidents do happen. And the cost of not having an insurance policy can be far worse than paying your premiums every month. If you have an issue where you or your business gets brought to court for damages, and you don’t have insurance, paying out of pocket for the situation could be so expensive, you end up losing your business. A general liability insurance policy is there to protect you and your business so that you’ll be covered when situations arise.
Don’t Get Stuck Without it.
A general liability insurance policy can make or break a business. Accidents happen, and the last thing you want is to be caught in a tough situation without proper protection. By considering the variables above, you may conclude that a policy may not be as expensive as you once thought. If you’re considering getting a plan and still don’t know where to start, finding an insurance broker is a great way to get you the coverage you need at a rate you can afford.
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