Factors Driving the Cost of General Liability Insurance
The industry you are in is the biggest factor insurance companies consider when determining the price of your General Liability Insurance policy. Some industries are inherently more risky than others. For example, a large store or restaurant located in the busy downtown area of a big city is at much greater risk for third party injury claims than a freelance writer who works from home. In a brick-and-mortar business, many clients are visiting your facilities, and the chance of something like a slip and fall occurring and resulting in a personal injury claim are much greater. Similarly, companies that are manufacturing and selling physical products that could cause damages, like toys for small children or electrical appliances, have a greater exposure than a business selling a professional service such as advertising. Companies that do work involving their customers’ (or another third party’s) property, like grounds maintenance or event production, are also considered high-risk.
Industries that pay some of the highest rates for General Liability Insurance policies include cleaning services, construction, manufacturing, retail and wholesale. Businesses that offer less tangible professional and consulting services, like marketing, design, management consulting, accounting, web development, advertising, and insurance will likely pay significantly less for this type of policy. In fact, some insurers offer discounts for home-based businesses since they are by nature less risky.
Other factors that affect the cost of General Liability Insurance include which state your business is located in, the size of your business (including both revenue and number of employees), and the coverage limits and deductibles of the policy you select. Companies that employ good risk management programs may also be rewarded with discounts by some insurers.