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General Liability Business Insurance
In 1944, Gladys Escola, a waitress at a restaurant in Fresno, California, was stocking up on glass bottles of Coca-Cola. As he filled the shelves, a broken bottle exploded in his hand, creating a five-inch gash that severed his nerves, blood vessels and muscles. He sued Coca-Cola Bottling Co., and the court ruled in his favor, meaning Coca-Cola was liable for damages.
While a California court case from nearly a century ago may seem irrelevant to today’s small business,
Was instrumental in developing US product liability law. One could argue that’s why many companies require product liability insurance today. Let’s take a look at what they are and why your business might need them.
Product liability insurance is insurance that protects your business against lawsuits for bodily injury or property damage related to products you make, distribute or repair. In other words, product liability insurance ensures that you are not on the hook for expensive lawsuits if your product injures someone. Some cases of injury or damage are covered under your general liability insurance policy, but not all.
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AdvisorSmith says product liability insurance is typically about $99 a month, or $1,192 a year. And according to estimates from Insureon, product liability insurance costs quite a bit less, typically around $42 per month, or $504 per year.
Rates may be higher for products considered “higher risk” or lower for products considered less risky. Just under a third of Insureon customers pay less than $30 per month and 41% pay $30 to $60 per month. Food, construction and skin care products may be considered riskier, for example, while photo, video and professional services tend to be at the bottom.
According to Insureon, businesses in installation and construction and contracting pay the most, while photo and video, professional services and media and advertising rank low.
Your coverage plan and limits also factor in costs. Most Insureon customers, for example, choose a limit of $1 million per occurrence and an aggregate limit of $2 million. This means the insurance will cover up to $1 million for any single claim and up to $2 million for all claims during the policy period.
What Does Commercial General Liability (cgl) Insurance Cover?
If you make or sell a product, your business can be held liable for the cost of a product liability claim if your product ends up harming a customer—even if the customer uses the product incorrectly. Product liability insurance protects you from legal and financial fallout. It provides third-party protection, meaning that compensation goes to those affected or injured, not your business. (In this case, the person suffering the harm is the third party, and your business is the first party.)
Not all businesses need product liability insurance—it’s only required for companies that manufacture, distribute, or repair physical products. However, it is important to remember that “product” can be interpreted broadly. If your company sells food products and someone gets sick from eating your food, you need product liability insurance.
As with any other type of insurance, the best way to get product liability insurance for your business is to request quotes from several different insurance providers for comparison. You can ask your business contacts for references or start with a Google search, and then narrow down your needs from there.
Product liability insurance is essential to protecting your business. Although not often, accidents do happen. Having product liability insurance is a great way to reduce stress and have peace of mind so you can focus on what’s important.
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If you sell physical products, you need product liability insurance, even if your business is online. However, if you sell digital products like software or web design, you need errors and omissions or professional liability insurance.
Some general liability insurance policies include a level of product liability insurance, but it is not guaranteed and may not provide adequate coverage for your needs.
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Try it free for 3 days, no credit card required. By entering your email, you agree to receive marketing emails from. The size of your building, the value of your business equipment and other factors determine the cost of property insurance (also called hazard insurance). Small businesses pay about $67 a month for this policy.
Small businesses pay an average premium of $67 per month, or about $800 annually, for commercial property insurance. Nearly two-thirds (62%) of customers spend $100 or less on coverage.
Our figures are derived from the median cost of policies purchased by customers from leading insurance companies. The median offers a better estimate of how much your business is likely to pay because it excludes higher and lower premiums.
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While small business customers pay an average of $67 per month for commercial property insurance, 35% pay less than $50 and 27% pay between $50 and $100 per month.
Our analysis of commercial property insurance costs reveals that for small businesses, your industry has one of the biggest impacts on your premiums. In general, insurance companies charge higher premiums to high-risk industries, while low-risk industries enjoy lower rates.
For example, commercial landlords are exposed to more risks than IT consultants who work from a home office. The graph below illustrates how the type of business affects the amount you will pay for a commercial property insurance policy.
Depending on the industry you work in, such as sports and fitness, you may be required by property owners to carry commercial property insurance coverage to rent space.
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For other businesses, such as in insurance or healthcare, you may need professional liability insurance (also called errors and omissions insurance) before you can get a license.
The policy limits and deductibles you choose will impact the cost of your commercial property insurance. Generally, the higher your limit, the more expensive your premium.
Many policyholders combine their commercial property coverage with general liability insurance in a bundle called a business owners policy (BOP). A BOP is often cheaper than buying each policy separately.
High-risk small and medium-sized businesses are advised to obtain a commercial package policy (CPP), which also combines general liability insurance with commercial property but offers more coverage options than a BOP.
Commercial General Liability Insurance Cost
General liability insurance with $1 million / $2 million limits is the most popular option for small businesses. This includes:
Almost all customers (91%) chose policies with $1 million / $2 million limits. Five percent of our customers choose policies with $2 million / $4 million limits, the next most popular option.
The deductible you choose is another factor that will affect the cost of your commercial property coverage. You can save money on property insurance by choosing a higher or lower deductible limit. The average deductible that customers choose for commercial property insurance is $1,000.
Your industry and policy limits are just a few of the factors mentioned that will impact your commercial property insurance rates.
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Geography can help your suppliers determine the environmental risks your business may face, such as natural disasters such as floods or tornadoes. Land values and local laws can also affect the premium you pay.
Is your business located in a high crime area? Does your business have toxic materials or engage in hazardous activities such as mining? Do you have lax security measures that don’t protect your physical assets and encourage vandalism?
These are all higher risks and can affect your insurance rates. If you are dealing with toxic substances, it may be a good idea to get environmental insurance to provide liability coverage for pollution risks.
Properties with easy access to fire stations and hydrants may be cheaper to insure. Sprinkler systems and fire alarms help reduce insurance costs as well.
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Fire is one of the most common and most expensive commercial insurance claims for small businesses. Here’s how to make sure you’re financially and physically protected from fire risks.
Older buildings can be more susceptible to certain types of property damage, so they may be more expensive to insure. For example, a fire caused by old electrical wiring can translate into expensive repairs.
You may also pay higher premiums if your equipment is difficult to repair due to limited parts, or if it is more likely to break down due to heavy use. Alternatively, it may be cheaper to repair old equipment than to buy the latest technology.
If you have equipment that you take from one job site to another, you may need inland marine insurance or equipment and contractor equipment coverage. This policy protects your tools and
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