If you’re a business owner, commercial liability insurance is one of the smartest investments you can make. It protects your company from costly lawsuits, property damage claims, and injuries that could otherwise derail your operations. But one of the most common questions we get is: How much does commercial liability insurance actually cost?
Let’s break it down.
What Is Commercial Liability Insurance?
Commercial liability insurance, often referred to as general liability insurance, covers legal costs and damages if your business is held responsible for:
- Third-party bodily injuries (like a customer slipping and falling)
- Property damage caused by your operations
- Advertising or reputational harm (like libel or slander)
It’s a foundational policy for businesses of all sizes and types—and in some cases, it’s legally required.
Average Cost of Commercial Liability Insurance
The cost can vary depending on your industry, location, and coverage needs. However, most small to midsize businesses can expect to pay:
- $300 to $1,200 per year
- Or about $25 to $100 per month
This would usually cover:
- $1 million per occurrence
- $2 million aggregate limit per year
Key Factors That Affect Your Rate
1. Industry Type
Some businesses carry more risk than others. For example:
- A consulting firm might pay just $300-$600/year
- A retail store might pay $500–$1,200/year
- A construction contractor might pay $800–$2,000/year
- A restaurant or bar could pay $1,000–$3,000/year
2. Business Size & Revenue
The more customers you serve and the more employees you have, the higher your potential risk—and your premium.
3. Location
Insurance costs vary by state and even by city. A business in Sacramento, CA might pay different rates than one in Los Angeles or San Francisco.
4. Claims History
A clean claims history can lower your premium, while a history of past lawsuits or claims may increase it.
5. Coverage Limits & Deductibles
Higher limits offer better protection but come with a higher cost. Choosing a higher deductible can lower your monthly premium.
Is Commercial Liability Insurance Worth It?
Absolutely. One single lawsuit or accident can cost tens of thousands—sometimes more. Having commercial liability insurance in place ensures you’re protected from the unexpected, giving you peace of mind to run your business.
Get a Customized Quote Today
At Eugene C. Yates Insurance Agency, we help Sacramento businesses get the right coverage at the right price. Our experts compare top carriers to find policies tailored to your industry and budget.
Contact us today for a free, no-obligation quote on commercial liability insurance.