What is general liability insurance?
General liability insurance, also called commercial general liability insurance or slip-and-fall insurance, is designed to cover everyday business liability risks. For example, it covers third-party bodily injury claims and third-party property damage claims due to an accident or negligence on behalf of your operations, resulting in injuries to a customer or visitor on your premises.
General liability insurance also protects business owners who lease or rent a commercial space by covering costs to repair or replace others’ property and can also feature coverage for personal injuries to a third party resulting from your advertising if facing an allegation of libel or slander.
General liability insurance may also include product liability coverage to address property damage or bodily injuries suffered by others caused by a product you manufacture, distribute, or sell.
How much does general liability insurance cost?
Small business owners will typically pay approximately $500 annually for general liability insurance with a $1 million coverage limit. The premium may vary depending on your risk and coverage options. An insurance provider determines the cost of a general liability policy based on:
- Location: Insurance pricing can vary by the location of your business and the areas where you provide services. Certain locations may have higher risks associated with them, such as higher crime rates or natural disaster risks, which can increase insurance premiums.
- Industry: Different industries have varying levels of risk, which can affect insurance pricing. Industries with higher risks, such as construction or healthcare, may have higher insurance premiums compared to lower-risk industries like consulting or technology.
- Product and Service Types: The nature of your business and your products or services can impact insurance pricing. Industries that involve high-risk activities or specialized services may have higher premiums due to the increased likelihood of claims. Where in the world your products are sourced from may also be a factor.
- How many employees you have (if applicable): The number of employees in your business can affect insurance pricing. More employees may lead to higher premiums as there is an increased likelihood of workplace accidents, employee injuries, or employment practices liability claims.
- Coverage Limits: The coverage limits you select for your insurance policies can impact the price. Higher coverage limits typically result in higher premiums, providing more extensive protection for potential claims.
- Annual and Project Revenue: The size of your business, as indicated by your annual and projected revenue, can influence insurance pricing. Larger businesses with higher revenues may have higher premiums due to the increased potential for larger claims.
- Insurance Claim History: The claim history of your business can impact insurance pricing. If you have a history of frequent or significant claims, insurers may view your business as higher risk and charge a higher premium to compensate for potential future claims. Conversely, a clean claim history may result in lower premiums.
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General liability insurance coverage limits
General liability insurance policies typically feature coverage limits of $1 million up to $5 million.
Higher coverage limits, or umbrella or excess coverage, is available if requested.
A policy’s coverage limit defines the maximum amount you can be paid for each claim by your insurer to cover expenses such as an injured customer’s medical costs and your legal defence fees or settlements.
While completing an online application for a free quote, we’ll recommend a coverage limit that’s suitable based on the information about your business you provide. Additionally, you can talk to a Zensurance broker if you have questions about the appropriate coverage amount.