How Much Should I Expect to Pay for General Liability Insurance For My Business?
July 21, 2020
General liability insurance is a type of mandatory insurance policy for businesses that provides coverage for general claims related to bodily injuries and property damage resulting from your business operations, your products and services, but not for the injuries sustained by your employees, for the auto damage sustained by your commercial fleet, for punitive damages or intentional damage. According to statistical data, the median cost of general liability insurance policies is around $42 per month, but how much your business will have to pay for your general liability insurance is determined by many factors. Here are some of the most important ones.
Typical Industry Risks
The risks typically involved by your business activity is among the most important factors that will determine the costs of your policy – the businesses in high-risk industries are usually required to pay more for their policies. For example, the activities of a construction business involve more risks than the activities of an IT consultant, therefore the insurance premiums will be higher for the construction business. The businesses that use chemicals and carry out their activities on someone else’s property, such as cleaning companies or landscaping businesses are also considered to be higher risks than computer businesses or other businesses that do all their work from their offices.
The higher the limit that the general liability insurance Colorado policy covers for, the higher the costs. The most common policy limits are around 1-2 million, that is the limit that most small businesses consider sufficient.
Tips for Reducing Insurance Costs
There are several methods that you can use to reduce the costs related to your general liability insurance:
- Purchasing multiple policies in a bundle – many insurance carriers provide substantial discounts to businesses that purchase multiple policies from them. Businesses are required by the law to have several different types of insurance, such as workers compensation insurance, auto insurance and others – if you decide to buy all of them from the same insurer, you can benefit from substantial cost savings;
- Make an upfront payment – most businesses pay for their insurance policies monthly, even though that is not the most economical solution. Making one upfront payment to cover your insurance costs for 6 months or for a year will allow you to benefit from substantial discounts;
- Risk management – enhanced risk management procedures will not only make your operations safer, they will also be good for your budget. Many insurance companies are willing to offer discounts to businesses that can prove that they are taking steps to reduce the risks related to their operations through active measures. Enrolling your employees into safety and risk management training programs, investing into the enhanced safety of your premises, the usage of work safety checklists and regular safety audits can all give you discounts. If you have such measures in place already or if you are planning to implement some, contact your insurance carrier to find out whether they offer such discounts or, if you are looking for a new insurer, check out their policies for handling such enhanced safety procedures.