Short-term general liability insurance

Short-term liability insurance policies offer the same level of protection as an annual policy, typically covering:

• Legal costs to defend your business in a lawsuit
• Property damage to a client's belongings
• Medical expenses if your work causes a customer bodily injury
• Judgments and settlements from a liability claim
• Legal defense for claims of personal and advertising injuries, like slander and copyright infringement

Temporary general liability insurance coverage is typically purchased by small businesses whose work is tied to seasonal shifts or on a project basis. This can include:

• Seasonal businesses, such as wedding photographers, caterers, nature guides, or holiday retail vendors, have peak seasonal business times. During the off-season, jobs and clients might be less steady and reliable.
• Project-oriented businesses such as a handyman, event planner, DJ, or contractor typically work on a project-by-project basis. The downtime between projects could vary depending on your business and the market for your services.

There are a few risks that come with choosing temporary general liability insurance coverage, such as:

• Coverage gaps, which leave your business vulnerable to claims and lawsuits that might arise outside of your policy period.
• Higher costs per day compared to a standard commercial general liability policy.
• Poor insurance history because of policy turnover, which can lead to higher premiums on the next policy.

While short-term business insurance has some benefits, continuous coverage is almost always the better solution for all businesses.

To calculate the cost of a general liability policy, underwriters consider many factors, including:

• Your industry risks. A seasonal amusement park with heavy foot traffic will pay more for short-term general liability insurance than an Etsy seller who works from home.
• Location. Regional factors like population density, healthcare costs, and property values will impact your insurance rates.
• Annual revenue. Businesses that bring in more revenue typically take on more clients and more risks, which increases your premium.
• Number of employees. A business with a larger payroll has an increased risk of accidents and lawsuits.
• Coverage limits and deductible. Choosing lower limits or a higher deductible can help you save money on general liability insurance, but make sure you have enough coverage to handle a potential claim. The average deductible for Insureon's customers is $500.
• Claims history. A business with a clean history of claims may have lower insurance rates than a company that has filed a claim on their policy.

Based on how these factors impact each business, there can be a wide range of prices for short-term coverage. Among Insureon's customers, 29% pay less than $30 per month and 41% pay between $30 and $60 per month.

Choosing an annual commercial general liability insurance policy is often less expensive in the long run and provides more peace of mind, since your business will always be protected against third-party claims. It also won't jeopardize your ability to keep business licenses that require insurance.

If you're planning to expand your business, year-round business insurance will also be a better option. For example:

• If a handyman wants to make their side hustle more of a regular gig, they might want to consider a year-long policy or a business owner's policy (BOP), which includes commercial property insurance.
• If a cleaning service needs workers, almost every state requires workers' compensation when you hire your first employee.
• If your delivery service buys a fleet of vehicles, you'll need commercial auto insurance to cover medical payments, property damage, and legal defense costs if an accident occurs.

You should also go with continuous insurance if you store business property between jobs or in the off-season. If you get short-term liability insurance for the peak season and cancel it a few months later, your business property is no longer covered against potential risks, such as weather damage or theft.

There are many ways to find cheap general liability insurance, keep costs low, and avoid more expensive rates. These include:

• Comparing insurance quotes from multiple providers
• Bundling coverage in a business owner's policy (BOP)
• Customize your policy limits and deductible
• Keep your claims history low with risk management programs, training, and safety reviews