If you're a business owner, you've probably heard that a $1 million liability insurance policy is a good baseline for protection. But how much does that level of coverage cost, and is it enough for your business?
The answer is complicated. Here’s what you need to know to make an informed decision and make sure your business has the protection it needs to succeed.
A $1 million business insurance policy typically refers to general liability insurance, which protects your company if someone is injured on your property or if your business activities cause property damage or harm to a third party.
This coverage can help pay for medical bills, legal fees and settlements, and repairs or replacement of damaged property.
For many small businesses, this is the starting point for commercial coverage, and in some industries, it’s the minimum required to for contracts or to lease commercial space.
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The cost of a $1 million general liability policy can vary depending on the industry, where your business is located, and its risk level. Here’s a general breakdown of what to expect:
Low-risk businesses (ex: consultants, office-based professionals) - $300 to $800 per year
Moderate-risk businesses (ex: retail stores, restaurants) - $800 to $2,500 per year
High-risk industries (ex: construction, gyms) - $2,500 and up per year
These are average annual premiums for $1 million in coverage, often with a $2 million limit. (the maximum the policy will pay in total during the policy term).
In many cases, yes. A $1 million liability policy provides solid baseline protection for common business risks. But depending on the size and nature of your business, you may want to consider umbrella coverage or additional policies like professional liability insurance, product liability insurance, or cyber liability insurance
Umbrella insurance is often affordable and can extend your liability limits by another $1 million or more, giving you added protection if a claim exceeds your base policy.
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A $1 million business insurance policy is a common and practical choice for many companies, offering important financial protection for a low cost. But one size doesn’t fit all. The right coverage, and the right amount, depends on the unique risks your business faces.
If you're unsure how much coverage you need or what kind of policy fits your business, Roehr Insurance can help. Our team can provide a personalized quote and help you understand your options so you can stay protected without overpaying.
