How to Estimate the Cost of Commercial General Liability Insurance. Mention insurance, and most business owners will roll their eyes. But it's a necessary evil. Commercial general liability insurance is a must for business owners to help protect them from a variety of potential loss situations. To estimate the cost, explore where you may be most vulnerable to loss.
Sit down with your agent and discuss your business insurance needs. Where are you most vulnerable to loss in your business? Commercial general liability (CGL) policies generally protect against bodily injury, property damage or loss, personal injury and advertising injury. Your agent may see the need for further coverage to protect you from potential losses that are specific to your type of business, such as professional liability coverage for an accountant, for example.
Get as many quotes on commercial general liability insurance as you can. Make sure you're making an apples-to-apples comparison of policies.
Read through the policy completely. Do not assume that all situations are covered. Discuss what-if scenarios with your agent to examine your coverage needs.
Realize that many insurance companies offering commercial policies will expect half-year payments, and won't set you up on a monthly plan. Expect to fork over half the CGL money twice a year.
Keep good payroll records, as you will most likely be subject to a yearly audit of your payroll expenses and amounts that you paid out to any subcontractors. If you paid more to your employees than the insurance company estimated, you may end up paying more on the next bill.
Make sure you get certificates of insurance from all your subcontractors. If your subcontractors fail to show proof of insurance to you, then the amounts you paid to them may be added to your total payroll, thereby increasing your insurance costs. Discuss adequate coverage for subcontractors with your agent.