Average Cost Of Liability Insurance For Small Business

There is a lot of importance of General Liability Insurance as a small business is a big industry today. If there is any simple accident that will harm your damage then definitely you will not want your business to stop at the starting or middle. It may also happen that you have to pay the big amount because of this accident which can even shut down your business.


You may have a small business; you can also dream bigger and lead a better life. You can employ more people through your business. You can grow your business by choosing the cheapest general liability insurance small business. There are various factors for buying the general liability insurance and this is the best time for you to know for the average cost of liability insurance for small business.

liability insurance for small business

General Liability Insurance Cost Factors For Small Business

Though the business is small it can also harm the customers and property of others. The customers may occupy the space in the stifling area and then you will have a lot of liability. When there is more liability it will indicate there is more risk which may lead to a very high rate of insurance.



Even though you have a small business but you can have risk factors that can be high or low. If you deal with the clients virtually or on Skype, then you can have very little risk and liability. In the restaurant, you can get the foods from any nearby kitchen as the self-service where there is the kitchen, gasoline, or any other material which can pose danger or risk to customers, so in such places, the risk is more as compared to the virtual place. Sometimes it is also seen that small business does not comply with the rules and regulations. Such small mistakes can lead to great danger and for this; you may have to pay a big price.


Location is also a risk factor. Your business can be at a place where the public gathering is more. The place where there are a lot of materials, machines, people where risky exposure is more. In such cases, liability insurance is very high as there are no safety procedures and people get injured. Even the place where you have been leading your business has many more claims of injury and damage to other’s property. Definitely, in those places, the rate of the liability insurance will be high.

Number of Employees

Another factor for the high rate of liability insurance is the number of employees. If you have a small business and fewer employees will be employed. Then this means there is very little as compared to the businesses which have more employees. Fewer prices are also offered by the liability insurance for the coverage if your business has few employees and is safe.

Meeting with the clients

Most of the real estate business, the legal business can be run in any apartment. But when the liability level is high then customers can visit your office. The customers can also meet in the coffee shop or in any park where the liability level is less. So it is very important to check that you should make sure that the liability is less for getting the cheap liability insurance rate.


Limit of liability Insurance

The liability limit is referred to as the highest amount that even an insurance company will be available for payment of a claim on the premise of the policy period. If you also feel that your company is at higher risk, it is so essential to have a higher limit. There is a diverse risk limit. Liability insurance for a vehicle has a restriction of 100/250/100 numbers in a thousand that implies how much is liability insurance for car


In the same way, there may be another way to set a limit as well as the most common limit for liability insurance coverage is $1 million/$2 million. It has been revealed that 85% of small businesses prefer this limit. There are also $300k/600k that is the lowest liability insurance limit. The maximum liability insurance limit is $2m/$4 m. Here are two primary categories of insurance for liability-

  • $1 million Occurrence Limit-The strategy is active and the insurer must pay up to $ 1 million for any specific claim.
  • The $2 million aggregate limit-This is called a policy life of 1 year and the insurer will pay up to 2 million for covering claims.


The average option is $1 million/$2 million and eighty-five percent prefers, a small company may opt for the first one, and people or contractors working on other property could go to a higher amount for reducing the number of losses as their industry is expected to be one of the difficult ones.


Actual Average Cost of Liability Insurance For Small Business

When the risk is less, small businesses generally pay lower prices. The high cost of liability insurance mainly depends on the business risk factor. Well, mostly it is seen that the cost which small business has to pay for the liability insurance is $400 to $650 yearly. The monthly price is very less amount and that is around $40.Around 53% of the small businesses pay $400 to $650 according to insureon. The other 22% of businesses pay between $200 and $400 as they have a very low level of risk and liability.


In the limit of $1 million/$2 million, $1284 is the average cost of the liability insurance and $584 is the median. But this amount is not that high as any small business will be able to pay this price. In your liability, if there is an accident, then you may need to pay more than $20,000 for a single accident. It is good to go for the liability insurance for protecting any shutdown in your business.


How the liability Insurance Premium can be lowered?

Many small businesses do not know about insurance but the insurance can be secure and safe so that the business can last for a long time. Any ignorance of the risk factors or law can be a big loss for the business and it can also be the reason for the business shutdown. So, at a cheaper rate, liability insurance can be bought.

Make sure that your business is secure

When you but the liability insurance, you should make sure that your business is safe and secure. The inspection can be done by the insurance companies of your business condition or premises for offering you the discounts. The discount can be offered to you if your business premises are safe and all your business is secure. The closed-circuit camera can be installed for the safety feature and the hazardous condition should be removed at your premises or building. You should be very careful about social media activities and provide training to the employees.

Go umbrella policy

When you have a small business like a superstore, you will be happy that everyone can buy anything from your store. This is correct in the insurance company. When multiple insurance coverages are bought for your business, then you will get a high discount which in turn will lower your premium.

Premium paid upfront

If the premium is paid upfront, then you are most likely to get the discount. The insurance company also provides you with more facilities. The monthly or yearly payment practices can be avoided which still exists. The upfront amount is dependent on your financial capability.



When the liability is more, the risk is also more. The risk factors should be protected first and your business should be made safe. The prudent decision is the liability insurance for the small business for making sure that you run your business in a very good way. Just a very simple mistake can be the reason for the business shutdown.

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