Business liability insurance provides the necessary coverage limited liability companies (LLCs) and organizations need to protect themselves against major claims, including bodily injury, property damage, personal injury, and product liability. As a CEO or executive member of your organization, you should plan for the eventuality of an unforeseen event that would disrupt business operations and negatively impact your bottom line. Read on to learn how much business liability insurance costs.
What is Business Liability Insurance?
Business liability insurance, also known as commercial liability insurance or general liability insurance, is a type of insurance coverage that protects businesses from financial losses resulting from legal claims or lawsuits filed against them by third parties. It provides coverage for various risks and liabilities that a business may face, including:
- Bodily injury
- Property damage
- Personal injury
- Advertising injury
Examples of when a company might use their business liability insurance include:
- A customer or visitor gets hurt in an accident on your premises, such as a slip. Business liability insurance can cover the medical expenses of the injured person and the legal defense costs if a lawsuit is filed.
- Your business accidentally damages a property while performing services. Business liability insurance can cover the costs of repairing or replacing the damaged property.
- If a business is accused of making false or misleading statements in its advertising or marketing materials, it may face legal claims for misleading practice or false advertising. Business liability insurance can help cover the costs associated with defending against such claims.
Types of Liability Insurance
Besides general liability insurance, you may need other forms of protection, such as:
Directors and Officers (D&O) Liability: Protects directors and officers of a company from personal financial losses and legal liabilities arising from actions or decisions made in their capacity as corporate leaders. Companies that use D&O questionnaires can proactively manage their risk and ensure adequate insurance coverage to protect their directors and officers.
Professional Liability: Protects service professionals against financial losses resulting from claims of negligence, errors, or omissions in the performance of their professional duties. Professionals in various fields, such as doctors, lawyers, architects, engineers, consultants, and accountants, typically acquire this type of insurance.
Cybersecurity Liability: In 2023, the average cost of IT-related security breaches will top $5 million per occurrence, and board members must employ appropriate cybersecurity risk mitigation techniques. Cybersecurity liability insurance protects businesses from the financial impact of cyber risks and provides support in managing and recovering from cyber-related incidents.
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How Much Does Business Liability Insurance Cost?
Business liability insurance costs are relatively low compared to the sheer financial risks that an organization faces due to unforeseen occurrences. On average, general liability insurance costs around $30 a month. The cost of a policy varies based on a number of factors, including:
- Building size
- Location
- Annual revenue
- Number of employees and payroll costs
- Claims history
- Policy details
OnBoard Maximizes Board Effectiveness
Unexpected events, ranging from customer injuries to data breaches and human error, are an eventuality for all organizations. It’s the board of directors’ duty of care to implement solutions, such as business liability insurance, that will minimize these risks and ensure business growth and continuity.
However, it’s important to note that business liability insurance is just one aspect of safeguarding your company’s long-term viability. In addition to insurance, utilizing reliable software enhances an organization’s governance practices and risk management. OnBoard software offers top-line benefits in this regard, including:
- Secure messenger
- Enterprise-grade security
- Compliance with General Data Protection Regulation (GDPR) and HIPAA
OnBoard software helps board members streamline board management processes and mitigate risks. Combining the protection of business liability insurance with the governance capabilities of OnBoard software strengthens your organization’s resilience.
Download our free board meeting agenda template for an example of how OnBoard streamlines board business.
Ensure effective, efficient meetings with our comprehensive Board Meeting Agenda Template.
About The Author
- Adam Wire is a Content Marketing Manager at OnBoard who joined the company in 2021. A Ball State University graduate, Adam worked in various content marketing roles at Angi, USA Football, and Adult & Child Health following a 12-year career in newspapers. His favorite part of the job is problem-solving and helping teammates achieve their goals. He lives in Indianapolis with his wife and two dogs. He’s an avid sports fan and foodie who also enjoys lawn and yard work and running.
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