Business Liability Insurance Stats By The Numbers

National average burglary per businesses 1 in 10 business burglarized each year

Number of businesses in US 32.5 million

National average business liability cost $500 year

Popular Questions About Massachusetts Business Liability Insurance

Business liability insurance protects your business in a variety of scenarios in which your company is negligent or causes harm to individuals or other businesses. Commercial general liability insurance (CGL) is the most important component of your business liability coverage. It is the first line of defense from lawsuits and liability claims against your business. 

Any business owner, no matter how many precautions he or she takes, is at risk for liability claims. Liability claims can arise from injuries or property damage that occur on your business property, or those that are caused by you or your employees in the course of doing business. CGL policies pay for attorney fees and any judgments that you might have to pay if you are sued, and also provide coverage for claims of libel, slander, copyright infringement, and false advertising. 

That’s a lot of coverage! But CGL insurance still does not cover every type of liability exposure that you might have. Let’s just say that it covers the basics, but since every business is unique, you may need deeper liability protection depending upon the type of business you do and the risks you face. You may need additional commercial liability policies, or you may need to add endorsements to other insurance policies in order to cover all the bases. 

Business liability insurance protects you, your business, and your employees from bodily injury and property damage claims. Customer slips and falls are some of the most common commercial liability claims. Customers may fall and be injured on your premises due to poor lighting, wet floors, loose or uneven flooring, or other hazards. 

  • SMALL BUSINESSES IN MASSACHUSETTS (2016) - 639,334  
  • MASSACHUSETTS COMMERCIAL INSURANCE CLAIMS (2016) - $3,214.186,000

While most commercial insurance claims involve property losses due to events like theft, fire, and weather, the most common claims are not necessarily the most expensive for business owners.  

40% of small businesses are likely to experience a property or general liability claim in the next 10 years. Here are some examples of the most costly claims: 

  • REPUTATIONAL HARM: $50,000 Average Cost Per Claim 
  • VEHICLE ACCIDENT: $45,000 Average Cost Per Claim 
  • PRODUCT LIABILITY: $35,000 Average Cost Per Claim 
  • CUSTOMER SLIP & FALL: $20,000 Average Cost Per Claim 
  • STRUCK BY OBJECT: $10,000 Average Cost Per claim 

CGL policies cover three types of liability exposures 

  • PREMISES AND OPERATIONS: Claims against your business for bodily injury and property damage related to the ownership and maintenance of the business premises, or as the result of business operations conducted both at and away from the business premises 
  • PRODUCTS AND COMPLETED OPERATIONS EXPOSURE: Claims for bodily injury and property damage that result from faulty products or completed operations (work performed by your business) 
  • INDIRECT/CONTINGENT EXPOSURE: Claims resulting from the negligent actions of independent contractors and subcontractors that you hire 

Specifically, a CGL policy may pay for the following types of claims, up to the limits of your policy

DAMAGE TO SOMEONE ELSE’S PROPERTY 

We call this “property damage liability insurance.” 

Example: A plumber working on a home remodel forgets to turn off the water and floods the homeowner’s finished basement.  

SOMEONE ELSE’S MEDICAL BILLS 

We also call this “bodily injury liability insurance.” 

Example: A delivery person slips and falls on a restaurant’s recently mopped floor and breaks an arm. 

HARM TO A COMPETITOR’S REPUTATION 

We call this “personal injury liability insurance.” 

Example: Your employee makes slanderous or false statements about a competitor, causing loss of business and reputational harm.  

HARM CAUSED BY A PRODUCT 

We call this “product liability coverage.” 

Example: A child’s outdoor play set collapses and injures a child.  

While your CGL policy offers broad coverage for many of the liability risks faced by your business, it doesn’t cover everything. In fact, there are some very specific risks that are excluded from most CGL policies.  

If you have certain risk exposures that are not covered under your CGL policy, you may need one of the following types of special coverage.  

40% of small businesses are likely to experience a property or general liability claim in the next 10 years. Here are some examples of the most costly claims:

  • REPUTATIONAL HARM $50,000 Average Cost Per Claim
  • VEHICLE ACCIDENT $45,000 Average Cost Per Claim
  • PRODUCT LIABILITY $35,000 Average Cost Per Claim
  • CUSTOMER SLIP & FALL $20,000 Average Cost Per Claim
  • STRUCK BY OBJECT $10,000 Average Cost Per claim

What does Massachusetts commercial liability insurance cover? 

CGL policies cover three types of liability exposures:

PREMISES AND OPERATIONS: Claims against your business for bodily injury and property damage related to the ownership and maintenance of the business premises, or as the result of business operations conducted both at and away from the business premises

PRODUCTS AND COMPLETED OPERATIONS EXPOSURE: Claims for bodily injury and property damage that result from faulty products or completed operations (work performed by your business)

INDIRECT/CONTIGENT EXPOSURE: Claims resulting from the negligent actions of independent contractors and subcontractors that you hire

Specifically, a CGL policy may pay for the following types of claims, up to the limits of your policy.

DAMAGE TO SOMEONE ELSE’S PROPERTY

Example: A plumber working on a home remodel forgets to turn off the water and floods the homeowner’s finished basement. 

SOMEONE ELSE’S MEDICAL BILLS

Example: A delivery person slips and falls on a restaurant’s recently mopped floor and breaks an arm.

HARM TO A COMPETITOR’S REPUTATION

Example: Your employee makes slanderous or false statements about a competitor, causing loss of business and reputational harm. 

HARM CAUSED BY A PRODUCT

Example: A child’s outdoor play set collapses and injures a child. 

The cost of a CGL policy can range from $500 per year to thousands of dollars per year. Premiums vary significantly from business to business and industry to industry. What you pay will be based on factors like the size of your business, its location, and your industry. Costs also vary based on the coverage limits and deductibles that you select.  

The most important factor in the cost of your CGL policy is the type of risks that are inherent in your business. A restaurant owner in a busy entertainment district will pay far more for a CGL policy than a freelance marketing consultant. The restaurant owner faces risks from customer slips and falls and several other exposures, while the marketing consultant never has customers on its premises and does not produce a product that can cause physical harm.  

Some industries that can expect to pay a lot for liability coverage are: 

  • Janitorial and cleaning services 
  • Construction 
  • Manufacturing 
  • Retail trade 
  • Wholesale trade 

Your business is incredibly vulnerable without adequate liability protection. Without CGL insurance you could face complete financial devastation and the inability to continue to operate if you are sued.  

An independent agent in Massachusetts can help. Independent agents have access to multiple insurance companies, so they can help you find the policy that best covers your unique risks.  

  • There are 1,291 independent agents in Massachusetts who are ready to help.  
  • In 2017, our agents helped 3,541 Massachusetts residents.

An independent insurance agent compares policies from multiple companies to find the best coverage for your needs.  

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