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General Liability Insurance for LLC: Cost and Providers

As an LLC, it might seem like you’re covered for liability issues. However, it can still help to get General Liability Insurance for an LLC for the added coverage. Below we’ll go into why an LLC would need general liability insurance, what it is and where you can find it.

Why Get General Liability Insurance for an LLC?

An LLC can benefit you and your company. It protects your personal assets. For instance, if someone sues you, a court of law can only go after your business assets, not your personal ones.  

Because an LLC protects personal assets, many people assume they do not need general liability insurance. However, that is not the case. An LLC alone cannot protect your business from lawsuits. Read on to see what general liability insurance for an LLC is and how it can still protect you, even if you operate under an LLC.

Furthermore, an LLC might need other types of insurance depending on what the product and services the LLC sells. For example: if the LCC sells professional advice, it is very likely you must have professional liability insurance, or also called malpractice insurance or errors and omissions (E&O) insurance. Or if the LLC sells a particular physical product such as pet food, it might need to have product liability insurance.

>>MORE: Top 5 Providers of LLC Insurance & Costs

What is General Liability Insurance for an LLC?

General liability insurance protects you if someone claims that your business caused bodily injury or property damage. It’s commonly called “slip and fall insurance” because it’s what covers you in case someone slips in your building and sues your business for bodily injury, for example.  

However, just because your personal assets tend to be secure through an LLC doesn’t mean you’re safe from lawsuits. For instance, if someone does sue your business for harm, assets of the business are still at risk, like accounts receivable, cash, equipment, materials and other assets that can be liquidated to pay damages in a court settlement. In short, without general liability insurance, your business is at risk.

Further, general liability insurance often covers court costs, property damage claims, medical expenses and the like. It can also help with additional coverage like claims against slander and libel, which forming an LLC alone would do nothing to protect you against.   

Sometimes, even your personal assets could be at risk during a lawsuit, even if you run an LLC. If you personally guarantee a business loan or don’t keep business and personal assets separate enough, you could be on the hook.  

>>MORE: Cheapest General Liability Insurance for Small Businesses

Where to Find General Liability Insurance for an LLC?

You can find general liability insurance for an LLC in a number of ways. One of the easiest methods is to compare rates through an online broker sites like CoverWallet or Insureon. Often, these sites offer side-by-side price comparisons for a wide variety of business types.  

You can also look into the major, popular carrier for business insurance. Hiscox, The Hartford, or Nationwide are some popular examples for business insurers.

Many times, the large national insurers will offer some form of business insurance, like Progressive, Geico or Nationwide. However, often these products will be underwritten by third party insurers. For instance, Geico’s general liability insurance page leads to the Hiscox quote process.  

More and more insuretech startups are simplifying the process for people to buy small business insurance online. Among them are Next insurance, Thimble, Vouch, Huckleberry, and Pie Insurance.

In general, the fact that you’re an LLC doesn’t change how you go about finding general liability insurance. You’re treated as a common type of business.  

By looking for general liability insurance, you can ensure that your business assets have some protection in case of a lawsuit claiming injury or damage from your business. And surprisingly, general liability insurance can even help cover your personal assets in certain circumstances.  

>>MORE: The 6 Best Providers of General Liability Insurance for Small Businesses

How Much Does General Liability Insurance for LLC Cost?

According to the insurance broker Insureon, general liability insurance for small businesses costs anywhere from under $300 per year to over $900 per year. The percentage breakdown runs:

  • Under $300 per year: 17% of small businesses 
  • $300-$600 per year: 48% of small businesses 
  • $600-$900 per year: 15% of small businesses 
  • Over $900 per year: 20% of small businesses 

The median costs run at $42 per month, or $500 per year.

As you can see, costs can vary drastically. Read on to learn what affects the costs of general liability insurance for an LLC.

What Affects the Cost of General Liability Insurance for LLC?

The number one factor that affects how much a small business can expect to pay in insurance premiums is the industry they work in. If the industry has more of a risk of getting sued, the premiums are higher. For instance, according to Insureon, the highest rates tend to be for construction and contracting. It’s very physical work and one wrong measurement could mean a roof caving in. Meanwhile, photo and video have the lowest premiums because less could go wrong and it often doesn’t involve someone else’s property.   

Other factors that could affect premiums include if you have made any claims in the past, how you set your deductible and which coverage limits you choose. Even your business’ location could affect your premiums, such as if you are in a densely populated area, increasing your foot traffic and risk of a lawsuit. The length of time you’ve been in business and how much your revenue is growing could also affect premiums.    

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