General Liability Cost

Business location

Insurance prices vary by state (and sometimes zip code). If you own a business based out of New York City, you’re surely going to get more foot traffic than if you had a small shop in upstate New York.

The more you interact with the public, the higher your “premises liability exposure”. It basically means you face a higher chance of people getting hurt at your location. And if someone trips and sprains a wrist, for example, they’ll probably ask you to pick up the medical bills. Note: GL protects people who don’t work for your business. Check out our workers’ comp cost breakdown to see how much it is to protect your employees on the job.

That seems unfair — they should have been paying attention! But their argument is, it’s your property, and it was hazardous and caused an injury. Technically, you can be held liable. 

Because general liability covers bodily injury, the price depends on your exposure to such liabilities. Typically, the higher the exposure, the more expensive your general liability insurance will be.

For example, far more people are likely to visit the hottest new juice bar than an accountant. No offense, accountants. But because the restaurant owner has more exposure than the accountant, the bill reflects the risk. The average cost of general liability insurance for a restaurant is around $775 a year, while a consultant typically pays an annual fee of $445.

Your profession

Commercial liability insurance prices are almost always impacted by profession. What you do for work will determine how much risk you face each day. The more risk you face, the more likely you are to have a claim.  For example, general liability will cost more for a retailer because they have more foot traffic. But a freelancer who works from home will have much less exposure. And their liability insurance cost will be cheaper.

Meeting in person with clients

If you meet with your clients virtually, there’s essentially zero risk for a premises liability claim. But if you’re having physical meetings with clients at your office, the opportunity for claims increases. 

Let’s say you’re having a meeting at your favorite coffee shop, and spill your latte on your client’s tablet, ruining the device. GL covers property damage, so that’s great. But keep in mind, the more you meet with clients in person, the more liability you face. The higher the liability, the higher the price tag of the policy.

Here’s another comparison: A real estate agent vs. a home-based business. It’s probably obvious who meets with clients more often. That’s why a real estate agent pays an average of $920 a year for a general liability policy, while a home-based business owner typically pays around $645 per year.

Cleaning businesses, construction businesses, and landscapers have some of the highest liability insurance costs. That’s because they do a lot of work that involves other people’s property, and GL pays for damage you or your employees cause to someone’s property.

Sales and Revenue

Insurance companies use sales as a measuring stick for risk. It makes sense: more action means more sales. The more action you have, the more interaction with customers. Since general liability insurance covers third party bodily injury and property claims more action means a higher price.

General liability policy costs

Many small business owners (with between 1 and 10 employees) can expect to pay somewhere between $400 and $650 per year for general liability insurance. That means, on average, you might pay around $40 a month for this policy.

Sure, there are many things you can do with $40 a month. Get your nails done, go to a few movies, fulfill your sushi craving, whatever. But if you don’t have general liability coverage, and something does happen, you might not be doing any of those things for quite a while.

It sounds crazy, but the average cost of a customer slip and fall accident is $20,000 dollars. You may not want to pay $40 a month for an insurance policy, but you probably never want to pay $20,000 in medical bills to some stranger who was clumsy enough to trip on the rug at your shop (and didn’t even buy anything)!

In the chart below, see how the price of a general liability insurance policy differs by profession. Keep in mind, these costs are based on $1M / $2M liability limits. (More on that below).

Liability limits are the maximum amount an insurance company will pay for a claim per policy period. The higher your risk, the higher you can set your liability limits. However, if you’re considered to be a low-risk business, you can opt for lower limits. Over 80% of businesses choose $1M / $2M liability limits, but other limits available are:

• $300K / $600K
• $500K / $1M
• $1M / $1M
• $1M / $2M
• $2M / $4M

As the limits increase, so will the price of the policy. Understanding coverage limits can be confusing, so feel free to reach out to one of our insurance experts with any questions.