General liability insurance cost

Small businesses pay an average cost of $42 per month, or about $500 annually, for general liability insurance.

Our figures are sourced from the median cost of policies purchased by Insureon customers from leading insurance companies. 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 coverage, 29% pay less than $30 and 41% pay between $30 and $60 per month.

The cost varies for small businesses depending on their business operations and the coverage they choose.

Your insurance provider calculates your general liability premium based on a number of factors, including:

• Your policy limits and deductible
• Location of your business
• Industry and risk factors
• Number of employees

Chat with a licensed insurance agent if you're unsure which coverage options to choose.

Your business location 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. Here are some examples of the average cost of general liability insurance across different states:

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 general liability insurance coverage.

Depending on the industry that you work in, such as construction or cannabis, you may be required by your state to carry comprehensive general liability insurance. For other businesses that rely on their professional services, 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 policyholders have the highest general liability insurance premiums 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.

With more employees on staff, the more opportunities there are for accidents to happen, such as damage to someone else's property. Thankfully, generally liability provides protection against these types of claims. Should an employee spill a drink on a client's laptop, they could sue your company for the replacement or repair of the computer.

That's why your premium is generally tied to the number of employees you have. During the application process, you'll likely have to provide a breakdown of all full- and part-time employees, as well as the number of subcontractors or consultants you employ, so your insurance provider can accurately assess your risks.

A general liability insurance policy (sometimes called public liability insurance) is a must-have to protect against the potentially devastating costs of a lawsuit over a bodily injury, property damage, copyright infringement, or advertising injury. 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. Without coverage, you'd have to pay all these fees out of pocket, which could include, medical expenses, lawyer costs, settlements, and more.

Commercial general liability insurance covers all of these costs, which could save your business from bankruptcy. This policy also provides coverage for small business owners when they sign contracts with other businesses.

Because the premium is based upon your level of risk, small businesses and contractors usually pay only a small monthly premium for this type of business insurance.

Bundle your insurance policies. Businesses can sometimes find discounts when they purchase multiple business 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 (which covers theft of business property) 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, or only getting short-term coverage, 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 general liability insurance.

Insureon is the #1 independent agency for online delivery of small business insurance coverage. 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. insurance companies.

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 type of coverage.