How much does $1 million liability insurance cost?

A $1 million general liability insurance policy can range in price from less than $300 to over $2,000 annually. On average, Insureon customers pay about $500 annually – or $42 per month, for a $1 million general liability insurance policy.

Businesses that face higher third-party risks (perform work at clients' work sites or interact with the public) or need more coverage per lease or client contracts will likely pay a higher premium. To compare, a general liability policy with $2 million per occurrence / $4 million aggregate limits costs on average about $550 annually – or $46 per month.

Our figures are sourced from the median costs of policies purchased by Insureon customers from leading insurance companies we partner with. The median offers a better estimate of what your business is likely to pay because it excludes outlier high and low premiums.

When purchasing a policy, the deductible should be something you can easily afford. The average deductible that Insureon customers choose for general liability insurance is $500. When faced with a liability claim, you must pay the deductible amount before your insurer covers the remaining costs.

When it comes to business liability insurance, there are several factors that contribute to your annual premium. To calculate your general liability insurance premium, insurance companies will look at your:

The price of your insurance coverage is influenced by the size and type of your business location. Larger premises, especially those open to the public (like a retail store or restaurant), increase the potential for third-party injuries or property damage, which can raise your premium.

In most cases, the industry in which your business operates has the biggest impact on your premium. Insurance providers consider any risks that might increase the possibility of an expensive claim. The greater the risk, the higher the price you’ll pay.

Generally, the higher your annual revenue, the higher your premium. For insurance companies, higher revenue is an indication of increased business activity and exposure to risk.

However, this associated cost increase also depends on your industry. In some industries, insurance costs only go up slightly with increasing sales, while in others, a rise in risky activity can lead to substantially higher premiums.

The more employees you have, including full-time, part-time, contractors, and consultants, the greater chance for an accident involving a third party to occur, especially if employees work at customer sites or interact with the public. This is why your premium will typically be higher.

While state laws play a role in the different types of coverage you are required to carry, the area in which your business is located can affect how much you pay for a policy.

Businesses that are located in high-crime areas or receive a large amount of foot traffic are considered higher risk and often pay a higher premium than businesses in low-crime areas or with little-to-no foot traffic.

Insurance providers will look at your previous claims history, if you have one, to determine how risky your business is. The frequency and severity of past claims will significantly impact how risky your business is perceived and ultimately how much you pay.

One way to save money on your commercial general liability insurance is to purchase a business owner’s policy (BOP). This package combines general liability coverage with commercial property insurance under one policy and is typically available to small, low-risk businesses. On average, the cost of a BOP is only $57 per month for Insureon’s customers.

Some business owners in the tech industry may be able to combine errors and omissions (E&O) insurance with cyber insurance in a tech E&O bundle to save even more money.

Another bundle small business owners can purchase is a commercial package policy (CPP), which bundles general liability and commercial property. It also allows for more coverage options and higher policy limits, making it a good choice for businesses in higher risk industries who aren't eligible for a BOP.

General liability policies are commonly capped at $2 million per-occurrence limit and $4 million aggregate limit. However, some businesses may be required to carry higher limits based on the amount of risk involved with their industry.

For example, healthcare professionals, such as nurses or chiropractors, may be contractually obligated to carry a general liability policy with a $3 to $6 million aggregate coverage limit. In these scenarios, a commercial umbrella insurance policy can help provide additional liability coverage for more expensive claims.

Because few insurance companies will offer a standard general liability policy with this amount of coverage, the solution would be to purchase a general liability policy with $4 million aggregate limit and a $1 million umbrella liability policy. Commercial umbrella insurance costs on average about $40 per month for each $1 million of additional coverage needed.

While many factors affect the cost of general liability insurance, with several outside your control, there are ways to find affordable small business insurance. To get free quotes, fill out Insureon’s easy online application with basic information about your business, such as revenue and number of employees.

You can consult with a licensed insurance agent at any point in the process. Once you pay for your policy, you can download a certificate of insurance (COI) to show clients and others that your business is protected.