How Much Does Liability Insurance Cost?
Liability insurance is designed to protect a company insured from the risks and liabilities that are imposed by lawsuits and other claims. If you own a small business, there are always small things that you worry about depending on what service you provide. There are many instances when a customer’s property can be damaged while a company is performing a service at their home, on their car, etc. When this happen, a customer can file a complaint or worse, they may file charges against you. This could mean disaster to the company as the legal cost can be staggering. However, there are insurances that can provide assistance to businesses that are in this situation.
How much does liability insurance cost?
- The liability insurance cost depends on several factors. The amount of coverage the insurance provides is the number one reason why the price of this type of insurance differs. There are plenty of insurance companies that provide this type of insurance and they have different rates for the monthly or annual premiums.
- On average, premiums can cost anywhere from $150 to as much as $800 per year. These premiums will generally come in one million dollar increments. The type of business you own can greatly influence the price tag.
- For instance, if you had a job that involved massages, you can expect to pay $150 to $350 per year. A job that has more liability such as being a landlord could cost upwards of $2,000 per year.
- Jobs such as a child care center could cost upwards of $2,000 for the year. Again, it can widely depend on the geographical location and operation.
Factors that influence the price:
- The type of business that you own. Larger businesses are going to be considered riskier in the eyes of the insurance company.
- The size of your business. The bigger the building, the more employees you have and payroll size can influence the price.
What is going to be included?
- Depending on the coverage provided by the insurance company, the included services may differ. Basically, liability insurance is designed to protect the company from various lawsuits or damage to property. The insurance will help in covering medical expenses and other costs involved when a customer’s property is damaged or a customer is injured at the place of business.
- If you failed to perform the promised duties or services due to the customers, they can also file a complaint against you. Liability insurance can also cover you in this type of scenario.
What are the extra costs?
- One of the additional costs involved when getting liability insurance is the premium that you need to pay every month or annually. This will depend on the insurance company that will provide liability insurance coverage to you.
- While the insurance company will pay the majority of the bill, you may be responsible for a small percentage or deductible.
- Additional riders may have to be purchased depending on the type of your business. For instance, a plumber or contractor may have to include a tool rider to protect them in case of a tool malfunction that causes damage.
Tips to know:
- It is suggested that if you have businesses of any type you should get liability insurance since you will never know what can happen. Liability insurance will help you lessen the money that you will pay out in cases where customer complains.
- The type of services that you provide would affect the cost of liability insurance since there are riskier industries that would require higher coverage.
- Keep in mind that insurance agents may take a glance at your credit history and past. If any negative marks show up, this can affect your overall quote.
How can I save money?
- The type of business that you have can affect the price of liability insurance; make sure that you ask your insurance agent what it will cost you to get this insurance and what exactly will be the covered by the company. Check with different insurance companies regarding what they offer and then weigh your options.
- You can check quotes from different insurance companies so you will be able to compare the price of different companies for this type of insurance. Check what the coverage is and do not necessarily go for the cheapest since it may not provide sufficient coverage. If you do not have an insurance company, consider using services such as BOLT to find a low-cost liability policy.
- The higher your deductible is with your policy, the less you will have to pay. If you can raise your deductible, consider doing so to save a few hundred dollars a month.
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