Shopping for general liability business insurance that is affordable for your business can take time and effort. Where do you go? Who do you trust? What is general liability insurance? Isn’t that just worker’s compensation and business protection?
These questions and more are on the mind of any business owner looking to protect their assets. In this guide, the insurance experts at Fusco Orsini & Associates will discuss what general liability insurance is, what it covers, and how you can effectively price out and quote the best general liability insurance for your budget.
What Is General Liability Insurance?
General liability insurance is insurance that helps preserve your business assets. It protects you from claims that can occur during business operations, such as bodily harm or client property damage.
What Doesn’t General Liability Insurance Cover?
- Worker’s compensation
- General liability insurance does not pay your worker’s medical expenses.
- Professional liability
- General liability insurance does not compensate clients for professional negligence.
- Vehicle accidents
- General liability insurance does not compensate for vehicular accidents by company vehicles.
- Fire, theft, or business-related property damage
- General liability insurance does not protect your business from property damage or theft.
Factors Affecting the Cost of General Liability Insurance
How much does general liability insurance cost? That can be a tricky question that’s best solved by requesting a general liability insurance cost quote from brokers such as Fusco Orsini & Associates.
But what contributes to a general liability insurance cost, specifically? Several things, such as the following:
Risk Exposure
Insurance is calculated predominantly on risk-loss scenarios and estimations. If your business or industry is known for being high risk, such as construction, automotive, or electrical, your general liability business insurance cost will be higher.
Business Location
If your company is located in high-traffic or dangerous areas, your risk of claims increases, and so does your general liability insurance cost. If your business is in a less populated or remote area, general liability insurance costs decrease.
Some states are prone to extreme weather conditions. This can also influence the cost of general liability insurance, making it even more challenging to calculate your business’s general liability insurance cost.
Type of Business
The cost of general liability insurance fluctuates based on the type of industry in which you operate. Certain business sectors are more prone to liability claims than others, so their general liability insurance cost is higher.
Coverage Limits
Every policy has a deductible and coverage limit, which can be increased to suit your needs. A higher deductible can reduce the cost of your general liability insurance, but you will be expected to pay whatever the difference is for your claim. Your coverage limit is how much you will be covered if a claim is filed, with the remainder paid out of pocket.
Consider a deductible like “you will pay X amount” for a claim, with everything else covered by your general liability insurance.
Claims History
Insurance is a risk-loss system, which means if something is risky, it will cost the insurer more money to compensate for any losses, requiring more from the insured to recoup their losses. Suppose your business has a history of claims. In that case, the risk factor increases, and your general liability insurance costs increase. Regardless of why the claims were filed against your business, they show the possibility of risk.
If your company has few or no claims, it indicates a commitment to risk management and safety regulations, which can decrease the cost of your general liability insurance.
Years in Businesses
If you are a new business, general liability business insurance can cost more since you have yet to prove that you are a company with risk management experience. Your policy can be changed and restructured as your business grows and you remain established for several years.
Older businesses with proven risk management (meaning fewer claims) will see a reduced general liability business insurance cost.
Despite that, there are general estimates based on other businesses.
Average General Liability Insurance Costs
While many businesses will need a quote customized to their needs and industry, there are general “averages” of what general liability business insurance can cost. On average, general liability business insurance costs just over $1,000 annually.
General liability insurance only includes more specific insurance policies, which you can learn about through the experts at Fusco Orsini & Associates, specialists in general liability insurance and other business insurance products.
What to Ask When Looking for General Liability Insurance
There are a few questions to consider when looking for general liability insurance.
What Does Your Policy Cover?
You should know what your policy covers when you purchase general liability insurance. General liability insurance can differ from insurer to insurer and business to business. When you finalize your general liability insurance and cost, thoroughly read your policy to ensure you receive what you need to conduct business safely and ethically.
What Is Your Deductible?
Your deductible will decide how much of your coverage you will pay out of pocket. An insurance policy with a higher deductible will cost less than one with a lower deductible, but a lower deductible means you spend less out of your pocket for claims.
Can You Change Your Policy Terms?
Make sure your policy can be adjusted. Your needs and protections will change as your business grows and expands, and your general liability insurance cost will fluctuate. If your policy is customizable, you can change aspects to ensure certain protections are more robust in different situations.
How Much Does General Liability Insurance Cost for Your Business?
Finally, it would be best to ask how much the general liability insurance will cost. You can receive a quote for general liability insurance or other business insurance from Fusco Orsini & Associates.
