How much does general liability insurance cost?

Insureon customers pay an average premium of $42 per month, or about $500 annually, for general liability insurance, regardless of policy limits.

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

While Insureon's small business customers pay an average of $42 monthly for general liability insurance, 29% pay less than $30 and 41% pay between $30 and $60 per month. The cost varies for small businesses depending on their risks and the coverage they choose.

If you want car insurance that pays for a wide range of damage, you have to pay more for it. The same rule applies to business liability insurance. If you want a policy that covers more expensive accidents and lawsuits, expect to pay more than you would for basic coverage.

General liability insurance coverage with $1 million / $2 million limits is the most popular option for small businesses. This includes:

• $1 million per-occurrence limit. While the policy is active, the insurer will pay up to $1 million to cover any single claim.
• $2 million aggregate limit. During the lifetime of the policy (usually one year), the insurer will pay up to $2 million to cover claims.

The majority of Insureon customers (91%) choose a policy with $1 million / $2 million limits. Five percent of our customers choose a policy with $2 million / $4 million limits, the next most popular choice.

When buying a policy, it's a good idea to make sure the deductible is something you can easily afford. If you can’t pay for it in a crisis, your insurance won’t activate to cover your liability claim. The average deductible that Insureon customers select for general liability insurance is $500.

The right amount of coverage depends on your business needs. You want coverage that'll cover a potential lawsuit, without buying more than you need. Chat with a licensed insurance agent if you're unsure which limits are right for your business.

Where your business is located can play a large role in the premium that you pay. For example, businesses that are located in areas with higher crime rates or increased foot traffic may have to pay higher premiums than those located in areas where these factors are lower.

Premiums can also vary slightly depending on your state. For instance, small business owners in Virginia pay an average of $36 per month for general liability insurance, while businesses in Colorado have an average premium of $49 per month.

While general liability is recommended for many small businesses, most states will require by law that small business owners carry workers' compensation if they have employees, and commercial auto insurance if they have business-owned vehicles.

Our analysis of general liability insurance costs reveals that for small businesses, your industry has the biggest impact on your premium. Generally, insurance companies charge high-risk industries higher premiums, while low-risk industries enjoy lower rates.

For example, brick-and-mortar retailers open to the public are exposed to more risk than IT consultants working from a home office. The graph below illustrates how the type of business affects what you'll pay for a general liability insurance policy.

Depending on the industry that you work in, such as construction or cannabis, you may be required by your state to carry general liability insurance. For other businesses, such as those in real estate, insurance, or healthcare, you may need professional liability insurance (also called errors and omissions insurance) before you can get a license.

Construction, cleaning, and landscaping businesses have the highest general liability costs because they often do work that involves other people's property. General liability policies can pay for damage you or your employees cause to someone’s property.

A general liability insurance policy is a must-have to protect against the potentially devastating costs of a lawsuit over a bodily injury or property damage. At any business, a visitor could trip and suffer an injury. If the visitor sues, legal costs can escalate to the point where they could sink your business.

Even if no one outside your company visits your office, someone could still hold your business liable for damages. For example, businesses that run advertising campaigns or post on social media could face a lawsuit if they post content that doesn't belong to them, or make a false claim about a competitor.

When someone sues your business – even if it's a frivolous lawsuit – you'll have to pay legal defense costs, such as the cost of hiring an attorney. If you lose the suit, you could end up paying a fortune in a court-ordered judgment or a settlement.

Commercial general liability insurance covers all of these costs, which could save your business from bankruptcy. Because the premium is based upon your level of risk, small businesses and contractors usually pay only a small monthly premium for this coverage.

Bundle your insurance policies. Businesses can sometimes find discounts when they purchase multiple insurance policies from the same provider. For example, if your business is considered low risk, you may qualify for a business owner’s policy. A BOP bundles general liability insurance and commercial property insurance together at a reduced rate.

Pay your entire premium upfront. Your general liability policy premium can typically be paid in monthly or annual installments. It might be tempting to go with a smaller monthly payment, but consider paying the full premium. Many insurers offer discounts for premiums paid annually.

Proactively manage your risks. If your small business has a clean claims history, you can expect lower insurance rates. An effective way to do this is to create a comprehensive risk management plan. For example, you might:

• Develop a thorough training program for employees
• Invest in a security system
• Compile rules for posting to social media
• Create procedure checklists and reviews
• Minimize hazards on your premises

Explore more ways that you can use to find cheap business insurance.

Insureon is the #1 independent marketplace for online delivery of small business insurance. We help business owners compare quotes from top-rated providers, buy policies, and manage coverage online. By completing Insureon’s easy online application today, you can compare free quotes for general liability insurance and other policies from top-rated U.S. carriers.

Once you find the right policies for your small business, you can begin coverage in less than 24 hours and get a certificate of insurance for your small business.

Insurance premiums vary based on the policies a business buys. See our small business insurance cost overview or explore costs for a specific policy.