Learn basic factors insurance companies use to price General Liability business insurance.

Read how General Liability business insurance is rated.

When you buy coffee at the neighborhood coffee shop, visit the dentist for a professional check-up, go grocery shopping, remodel your kitchen, or eat out at your favorite restaurant in Cleveland, you are supporting the local economy. The local economy needs you, and you need it. Did you know that without business insurance, many of the goods and services you take for granted on a regular basis would not be available?

There is risk in activity. No business survives without activity. Inherent with activity is liability. Business owners and businesses need liability insurance for protection. Depending on the type and size of the business, a Business Owner’s Policy (BOP), a commercial package policy, or a separate General Liability policy will be suggested by your independent insurance agent.

How does an insurance company determine the pricing structure for a business’ General Liability exposure? General Liability business insurance is typically based upon the class in which the business is categorized. The rate assigned to each class takes into account actuarial reports of loss costs and loss trends analyzed by each respective insurance company. The following examples are common business insurance classes and the rating factors used:

Class of Business Insurance                                Rating Factor

Retail sales, i.e. coffee shop, grocery store              per $1,000.00 of gross sales

Churches                                                                        per 1,000. Square feet

Dental and professional offices                                 per 1,000. square feet

Contractors                                                                    per $1,000.00 of gross payroll

Restaurants                                                                   either per $1,000.00 of gross sales

                                                                                                          OR per 1,000. square feet

Manufacturers  (depends on type of operation)    either per $1,000.00 of gross sales

                                                                                                     OR per $1,000.00 of gross payroll

Vacant Land                                                                  per acre

Apartment Buildings                                                   per unit

Landlord multi-use building:

           Retail area                                                          per 1,000. square feet

           Apartment units                                                per unit

Fairs and festivals                                                        per $1,000.00 of admission charges

In addition to the above standard rating factors, insurance companies consider the business’ and business owner(s)’ experience, loss history, and the limit of liability when quoting General Liability business insurance coverage.

Richey-Barrett Insurance is your Trusted Choice Independent Insurance Agent for all of your business insurance and commercial insurance needs.