Home » FAQ » How much is product liability insurance for a small business?

How much is product liability insurance for a small business?


How Much Does Product Liability Insurance Cost for a Small Business?

Product liability insurance is essential for small businesses that sell products to customers. No matter the type of product, the risk of lawsuits due to injuries or damages caused by your products always exists. Understanding the cost of this insurance and the factors that influence it is vital as part of your comprehensive risk management plan. THAgency provides a detailed guide to help you make an informed decision for your business.

Factors Influencing the Cost of Product Liability Insurance

  1. Type of Product

    • Low-Risk Products: Items like clothing or household goods generally have lower premiums.
    • High-Risk Products: Electronics, toys, food and beverages, medical devices, and children’s products have higher premiums due to increased risk of injury or damage.
  2. Annual Revenue

    • Higher revenue often leads to higher premiums because greater sales can mean more potential claims.
  3. Coverage Limits

    • The amount of coverage you choose (e.g., $1 million per occurrence and $2 million aggregate) significantly affects the cost.
  4. Claims History

    • A company with a history of claims will likely face higher premiums.
  5. Business Size

    • Larger businesses or those with multiple locations may have higher premiums compared to smaller businesses operating from a single location.

Average Costs of Product Liability Insurance

While costs can vary widely, here are some general estimates for different scenarios:

  • Small Business with Low-Risk Products:

    • Premiums can range from $300 to $1,000 per year for $1 million in coverage.
  • Small Business with Moderate-Risk Products:

    • Premiums can range from $1,000 to $2,500 per year for $1 million in coverage.
  • Small Business with High-Risk Products:

    • Premiums can range from $2,500 to $5,000 (or more) per year for $1 million in coverage.

Tips for Reducing Costs

  1. Improve Product Safety

    • Implement rigorous quality control measures to reduce the risk of claims.
  2. Bundle Policies

    • Purchase product liability insurance as part of a Business Owner’s Policy (BOP) that combines general liability and property insurance at a reduced rate.
  3. Increase Deductibles

    • Opting for a higher deductible can lower your premium, but you’ll pay more out-of-pocket if a claim arises.
  4. Maintain a Clean Claims History

    • Avoiding claims can help keep premiums lower over time.


Product liability insurance is crucial for protecting your small business from potential lawsuits related to the products you sell. While costs can vary depending on several factors, understanding these factors and actively managing risks can help you find affordable coverage. Always consult with insurance professionals to tailor a policy that suits your specific needs and provides adequate protection for your business.

For more information about product liability insurance and other types of business insurance, contact THAgency today and secure a safe future for your business. Our experts are here to help you find the best coverage tailored to your needs, ensuring peace of mind and comprehensive protection. 


We will find the best business insurance tailored to your needs. Read more… 

Related Posts

Get a Right Insurance For You


We will compare quotes from trusted carriers for you and provide you with the best offer.

Protecting your future with us

Whatever your needs, give us a call, have you been told you can’t insure your risk, been turned down, or simply unhappy with your current insurance? Since 1995 we’ve been providing coverage to our customers, and helping people across United States.