Starting a business requires meticulous planning on the part of the founder. A part of this planning is finding out what all kinds of insurance you need to cover any damages and protect your business financially. One of the most important types of insurance is liability insurance.
Liability insurance protects you and your business from lawsuits that may come your way, seeking compensation due to property damage or bodily injuries incurred. These injuries may occur as a result of your products or services going wrong.
Liability insurances cover a broad range of damages, but the most important one of these is commercial general liability insurance. This is designed to protect your company from legal liability involving compensation for damages and injuries affecting the third party from your routine business operations.
The cost of commercial general liability insurance and what factors influence this are mentioned below.
Cost of buying this insurance policy
Most general liability insurances cost around $30 a month or less. Typical liability insurance costs less than $50 for small businesses, and bigger ones paid only around $100 monthly for their insurance.
Factors that influence the cost of general liability insurances
Three main factors affect the cost of your general liability insurance. These are:
- Location of business
- Industry it is affiliated to
- Costs of payroll
- Annual revenue
The location of your business plays a primary role in determining its risk factor. Therefore, if you do business in an area that is riskier than average, you will be required to adjust your limits for the insurance.
The industry with which you are affiliated makes an impact as well. For example, a software company or a company that sells physical products has a greater need for a this kind of an insurance policy.
Your annual revenue and payroll can play a leading role in deciding how big of an insurance policy you need and can afford.
Commercial general liability insuranceis a required prerequisite for the smooth functioning of a business. With it, your business will remain financially well-off and stable.