How Much Is Liability Insurance For a Small Business
How much is a $2 million dollar insurance policy for a business?
The average cost of a $1 million / $2 million BOP policy for a small business is $1,217 per year, and the median is $638.
How Much Is Liability Insurance For a Small Business?
Small business owners often struggle with understanding the various costs associated with running their business, and one of those costs is liability insurance. Liability insurance for a small business typically covers any legal or medical costs that arise due to negligence or injury. Determining how much liability insurance to purchase and what type of coverage is appropriate is essential to ensure a business is adequately and reasonably covered.
The cost of liability insurance depends on a few factors, mainly the size of the business, the business’s assets and liabilities, and the type of industry the business operates in. Businesses that handle a lot of customer contact, such as salons or restaurants, tend to have higher premiums because of potential customer legal claims. The riskier the business or the more assets and liabilities a businesses has, the higher the insurance.
When assessing how much liability insurance is needed for a small business, it is important to consider the possibilities of litigation. It is not only legal claims, but also any medical charges that are associated with accidents or injuries that may occur on the business’s premises, in delivery vehicles or on equipment used in the business. Additionally, if a business manufactures products, retailers may insist on product liability insurance to cover any damages or loss caused by the products.
Generally, a business liability insurance policy includes two coverage levels: general liability and commercial liability. General liability insurance helps protect a business from claims made by third parties, such as customer injury, damages of property, and any costs related to legal defense and settlements. Commercial liability insurance covers professional services provided by the business, such as if a customer accuses a company of negligence of service.
It is recommended that business owners evaluate their risk profile and speak with an insurance professional to determine the appropriate liability insurance for their business. Depending on the business’s size and type, the estimated cost of liability insurance for a small business ranges from a few hundred to a few thousand dollars per year.
Overall, liability insurance plays an important role in providing financial protection for small businesses in the unfortunate event that a legal action arises. Small business owners should evaluate their risk profile, speak with an insurance professional, and understand the necessary liabilities they are looking to cover when determining their needed levels of liability insurance.
