General liability insurance (also referred to as commercial general liability insurance) is usually the first policy that small tech companies buy. It protects you from the legal costs of common accidents, and costs about $30 per month for basic coverage.
How much you pay for general liability insurance depends on your coverage limits. Most small business owners (88%) opt for a general liability policy with a $1 million per-occurrence limit and a $2 million aggregate limit.
Tech companies with a storefront or frequent client interaction should consider higher policy limits as they’re more susceptible to bodily injury, property damage, and advertising injury lawsuits. Higher limits cost more, but they cover more expensive claims.
The more you work with the public the more you’ll pay for this policy. When determining your premium, your insurance company will look at:
Commercial insurance costs are higher for high-risk businesses – those with a large footprint or heavy foot traffic. In short, more people means more opportunities for people to get injured. And if your employees handle other people’s property, that increases your risk as well.
Businesses in industries with a reputation for filing more claims, such as computer repair or other work involving other people’s property, will also pay more for commercial insurance.
Policies with high deductibles cost less, but you’ll have to pay that amount before you can collect on a claim. Most TechInsurance customers choose a deductible of $500 for general liability insurance.
Insurance companies look at your claims history to determine how risky you are to insure. Tech companies that have made commercial general liability claims will pay more for insurance than those with a clean history.
Get the most out of your policy by considering the following:
Purchase a business owner’s policy (BOP). Small low-risk technology businesses may be eligible for a business owner’s policy. A BOP bundles a general liability insurance policy with commercial property insurance and costs less than purchasing the policies separately.
Pay the annual premium. When you buy a policy, you can choose to pay your premium monthly or annually. The annual amount costs less than paying by the month.
Risk management. Claims make your premium go up – so reduce your risks to avoid claims and keep your premium low.
To reduce the chance of making a claim on general liability coverage:
You’ll also want to be careful about using images, music, and other intellectual property to avoid copyright infringement claims. Though you can’t eliminate every risk, these steps help avoid conflicts that lead to third-party lawsuits.
Many factors determine which general liability insurance policy is the right one for your business. Here’s how to choose a policy by looking at six different aspects of your general liability insurance quotes.
View our small business insurance cost overview or find out how much you can expect to pay for common types of business insurance.