How Much Does General Liability Insurance Cost?

General Liability Insurance Cost

Get details on what general liability insurance costs to protect your small business

General Liability Cost For Small Business

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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.

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More FAQs

How does my business location affect the cost of general liability insurance?

Where your business is located significantly affects the price you will pay for general liability insurance. For instance, areas with high crime rates, regions prone to natural disasters, or businesses close to high-risk activities, such as a nearby chemical plant, tend to pay more because the likelihood of suffering damages or losses may be higher than in other locations.

Does general liability insurance cover injuries to my employees?

No. General liability insurance is designed to cover injuries or property damage to third parties, like your customers. Your provincial workers’ compensation board covers an injured employee’s medical expenses and rehabilitation.

Besides the location of my business, what other factors influence the cost of general liability insurance?

Beyond the location of your business, insurance providers consider several factors about your operations when determining the cost of a general liability insurance policy. These include what your company does and its products and services, the size of your business and how many employees you have, your annual and projected revenue, the coverage limits you choose, and your insurance claim history.

How to save money on general liability insurance

There are a few ways you can reduce the cost of your general liability insurance policy, including:

  • Pay the annual premium upfront. Zensurance allows its clients to pay their premiums annually or in monthly installments. However, paying your premium for the year upfront results in modest savings. That’s because insurers will charge a small fee to process and manage monthly premium payments over a year.
  • Choose high deductibles. A deductible is the amount you agree to pay after filing a claim before your coverage applies. You can choose how much your deductible is. Generally, the higher your deductible, the lower your annual premium. However, if you select a high deductible, be sure you can afford to pay it if you must.
  • Bundle general liability with other insurance. Purchasing different types of insurance to complement a general liability policy from the same insurer can reduce the overall annual premium versus buying separate policies from several insurers. For example, if you bundle commercial property coverage and general liability insurance together in a business owner’s policy from one insurer, that insurance provider will discount the overall price.
  • Be proactive in mitigating liability risks. Insurance providers appreciate and acknowledge business owners who take preventative measures to reduce the likelihood of filing a claim because of damage or loss. Taking such actions may result in a lower annual premium. For example:
    • Minimize trip-and-fall hazards on your premises
    • Install a monitored fire and security video surveillance system
    • Conduct routine maintenance at your property to prevent minor issues from becoming significant problems
    • Have an emergency preparedness plan and supplies like a first-aid kit, flashlights, water, non-perishable food, and other necessities on hand
    • Thoroughly train your employees
    • If employees manage your social media networks, have rules and guidelines in place for them to follow

Common claims scenarios

store employee at clothing shop

Problem: A customer visiting your retail store slips on a wet floor, falls, and fractures their wrist. They require medical attention.

Outcome: Your general liability insurance may cover any damages incurred from an injured party seeking legal action against you.

A home renovation contractor working at a job site.

Problem: While visiting a customer’s home to deliver or install a product, your employee accidentally hits a water pipe and causes water damage to the customer’s property.

Outcome: Your general liability insurance may cover repairing the damages.

hand cream - product liability

Problem: A product you get from a supplier that you regularly sell to your customers is defective and causes physical harm to the customer who bought it.

Outcome: If your general liability insurance includes product liability insurance, it may cover the injured customer’s medical fees.

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