Top 4 Factors You Need to Know That Affects Commercial General Liability Insurance Cost

Do you run a staffing agency or an IT company? How many people are entering and leaving your premises daily? Have you made proper arrangements for their safety? Even if you have, do you have sufficient funds to deal with any unlucky events? You might not know what could happen the next day, but your customers can sue you if they fall, drown, or succumb to any injury within your premises? You might afford the litigation cost one or two times, but not every time, right? That’s where commercial insurance comes in. The commercial general liability insurance cost starts from $30 per month for basic coverage.

Top 4 Factors You Need to Know That Affects Commercial General Liability Insurance CostHowever, as far as annual expenses are concerned, the commercial general liability insurance cost ranges somewhere between $340 to $600 or more. In case your business is not that big and operating at a small level, you may be eligible for a business owner’s policy or BOP. BOP is basically a combination of general liability insurance and commercial property insurance offered at a discounted rate.

Now before we go deeper into commercial general liability insurance cost, let’s understand what commercial general liability insurance is, ok?

What is commercial general liability insurance? 

Commercial general liability insurance is a type of insurance policy that protects business owners in case of any unfortunate incidents with customers on their premises. Not only that, if your employees are working at a client’s site (especially in the construction industry) and they have left the water tap open by mistake resulting in substantial damage to the customer’s home, then also commercial general liability insurance can save you from the expenses. That means the insurance provider will pay your client a substantial amount of money as compensation for the loss, got it?

Take note that this insurance policy not just covers the compensation expenses but also legal expenses that business owners are legally liable to pay if their customers are exposed to bodily injuries or property damage.

What exposures does commercial general liability insurance cover?

  1. Products liability
  2. Premises’ liability
  3. Operations liability
  4. Completed operations liability

What type of coverages does commercial general liability insurance offer?

  1. Medical payments
  2. Bodily injury and property damage
  3. Personal and advertising injury liability

What determines the cost of commercial general liability insurance?

1 – Policy Limits 

The amount of money you pay to buy commercial general liability insurance depends largely on the coverage limits that the insurance offers. For your information, most of the small entrepreneurs take a general liability policy having a $1 million per occurrence limit as well as a $2 million aggregate limit.

88% of business owners fall in the above category, however, the rest of the entrepreneurs look for higher policy limits. For instance, businessmen who run big tech companies with many brick-and-mortar offices or higher client interaction opt for expensive liability insurance. Such liability insurance comes with higher policy limits and covers more property damages, bodily injuries, and advertising injuries lawsuits.

2 – Claims’ History

Before getting your company or business insured, an insurance service provider looks at your claims history carefully in order to know how risky you could be to insure. This is why companies that have claimed the liability multiple times in the past need to pay higher premiums for insurance than those with no or lesser claims.

3 – Business Size 

Do you know that the size of your business also affects the cost of commercial general liability insurance? Yes, if you are running a giant business attracting heavy foot traffic or having multiple branches worldwide, your company will be counted under high-risk businesses. And the businesses that account for high risk attract higher commercial insurance costs, understood?

If not, you can interpret it in this way, suppose that a business draws a large number of customers to its premises for selling its products or services. Now when more people gather under one or more roofs, the chances become high for them to get injured. Naturally, this induces a sense of fear in business owner’s minds, and they consider buying expensive commercial general liability insurance.

4 – Deductible 

Insurance policies that have higher deductibles actually cost less. But you need to pay that amount before getting the claim settled. In case you don’t know, most of the clients who want to buy commercial liability insurance choose a deductible of $500 for general insurance.

Our two cents 

I hope now you know what you can do to protect yourself from financial losses when your customers fall, drown, or succumb to any injury within your premises, right? In case you need personalized help for buying commercial general liability insurance, just reach out to the best insurance brokers through a call or email. They will guide you through the whole insurance purchasing process and also help you get maximum coverage for the insurance you plan to buy.

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