How much does general liability cost?

If you’re working for yourself as an independent contractor, entrepreneur, or small business owner, commercial general liability insurance is the perfect place to start if you’re looking to protect your business.

General liability insurance protects your business against various mishaps that can happen when you run a business, such as bodily injury, property damage, personal and advertising injury, and medical costs. The great thing about general liability insurance is that it has many coverage benefits without being unreasonably expensive.

Below are some sample insurance estimates, but keep in mind that these are only estimates. The best way to find out exactly how much small business insurance will cost is to fill out a simple form about your business, and we’ll compare over 30 insurance companies to find you the best prices.

General liability insurance cost factors

General liability rates depend on several factors that insurance companies look at to determine your risk. That’s the gist of how insurance coverage works: More risk means higher prices.

The location of your business

Insurance prices vary by state, but can also vary by zip code within your state. If you own a business based out of New York City, you’re surely going to get more foot traffic into your premises than a small shop in upstate New York.

The more you interact with the public, the higher your premises liability exposure. This means that you face a higher risk of others getting hurt at your location. And if you have a customer browsing through your shop and they trip over a rug and sprain their wrist, you could be asked to pay the medical bill.

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.

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. General liability 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.

Representing clients

Let’s say you’re a marketing consultant. You work virtually, and don’t face high risks for bodily injury or property damage. But that doesn’t mean you’re free from liability. General liability insurance also covers non-physical claims, like personal and advertising injury. This is just a clunky term which really refers to copyright infringement, libel, slander, and false advertising.

Doing work that could potentially cause harm to someone’s brand or reputation is definitely a risk, which is why a general liability policy is a great thing to have. The price of general liability can depend on the exposure you have in regard to outwardly representing clients.

Someone in media is more likely to publicly represent a client than a health-care professional, and that’s why a media person typically pays around $500 for general liability insurance, whereas a health-care worker pays around $445.

The price of general liability insurance

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

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 ask one of our insurance experts about liability limits.

Short-term policy misconceptions

Event policies are something you might purchase if you are hosting an event, like a conference or fundraiser. Event-based policies might seem cheaper up front, but they can really add up. If you think you might be working on more than one or two events a year, consider purchasing an annual policy — it could end up saving you money in the long run.

Looking for a cheaper option?

A BOP, short for a business owner’s policy, combines general liability insurance with business property insurance into a package deal. You get more coverage, and at a lower price than purchasing each of the policies on their own. Depending on your line of work, these bundled policies can start as low as $250 a year, which averages around $21 a month. (That way, you’ll still be able to get your sushi fix.)

We can save you money.

We work with over 30 insurance providers to get you the best coverage at the right price. Simply fill out a free 10-minute quote, and we’ll compare rates from top national companies for you.