Wondering about how General Liability Business Insurance is Rated?

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

Richey-Barrett Blog

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

Retail sales, i.e. coffee shop, grocery store
Dental and professional offices

Manufacturers (depends on type of operation)

Vacant Land
Apartment Buildings
Landlord multi-use building:
Retail area
Apartment units
Fairs and Festivals

Rating Factor

Per $1,000 of gross sales
Per 1,000 square feet
Per 1,000 square feet
Per $1,000 of gross payroll
either per $1,000 of gross sale
OR per 1,000 square feet
either per $1000 of gross sales
OR $1,000 of gross payroll
Per acre
Per unit

Per 1,000 square feet
Per unit
Per $1,000 of admission sales

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.

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