If you run a small business in Plano, McKinney, Allen, or anywhere across the northern Dallas suburbs, you’ve probably been told you need a Commercial General Liability (CGL) policy. Most business owners know it’s essential, but far fewer understand how the cost of their policy is actually calculated.
At Sterling Insurance, we spend a lot of time helping North Texas business owners make sense of their premiums. The good news? Once you know the main factors that drive pricing, you’ll have a better idea of how your policy is built and what you can do to manage the cost.
What Is a Commercial General Liability Policy?
A CGL policy is designed to protect your business if someone claims injury, property damage, or even reputational harm tied to your operations. It’s usually required in leases, contracts, and vendor agreements and it’s the backbone of most commercial insurance packages.
Key Factors That Affect Your CGL Premium
1. Business Classification Code
Every company is assigned a classification code that signals how risky the work is.
- A roofing contractor in Allen won’t be rated the same way as a Plano web design consultant.
- Riskier industries equal higher premiums.
2. Gross Annual Revenue
Insurers look closely at your total sales. More revenue typically means more customers, more jobs, and therefore more chances for claims.
Tip: Always report revenue honestly. Understating it can lead to audit problems later. Most GL policies are audited annually but they can take up to five years to audit a policy and if your payroll or sales are not accurate, that can result in a pricey unexpected bill.
3. Payroll (for Certain Industries)
If your work involves labor (construction, landscaping, cleaning) your annual payroll is used to measure exposure. Even subcontractors’ pay may be counted.
4. Business Location
Where you operate matters. Rates vary by ZIP code and urban density. For example, a McKinney contractor may pay different premiums than one handling projects in busy downtown Dallas.
5. Claims History
A clean record helps lower costs, while past liability claims (such as slip-and-falls or property damage) raise red flags. Multiple claims may even push you into a specialty market.
6. Policy Limits and Deductibles
Choosing higher coverage limits increases your premium, while higher deductibles can lower it. Example: moving from a $2 million aggregate limit to $3 million will increase your cost.
7. Endorsements and Add-Ons
Extra coverage adds protection but also raises premiums. Common endorsements include:
- Hired and Non-Owned Auto Liability
- Cyber Liability
- Employee Benefits Liability
8. Number of Employees
More staff usually means more public contact, which increases liability exposure. Even a small office in Prosper will see higher rates once employees are added.
9. Years in Business
Longevity matters. Established businesses with safety procedures and no recent claims generally pay less than a brand-new startup in Celina and the Dallas area.
10. Insurance Carrier
Not all carriers use the same formula. Each has its own appetite for risk and preferred industries. At The Sterling Insurance Group, we compare multiple insurers to find the best match for your business.
Estimated Cost Ranges in North Texas
While premiums vary, here’s a general idea for Dallas-area businesses:
- Low-risk (consultants, IT, designers): $400–$750 per year
- Moderate-risk (restaurants, retail shops, landscapers): $800–$2,500 per year
- High-risk (contractors, manufacturers, roofers): $2,500–$10,000+ per year
How to Lower Your CGL Premium
You can’t control everything, but you can influence your costs:
- Work with an independent agent. We compare multiple carriers instead of just one.
- Bundle your policies. Pair liability with commercial property, auto, or workers’ comp for discounts.
- Improve safety practices. Contracts, training, and requiring Certificates of Insurance from subs all help reduce exposure.
- Choose smart payment options. Pay in full or set up EFT to save a few percent.
- Keep a clean claims record. Avoid filing small claims that you could handle out-of-pocket.
Questions to Ask Your Agent
Before you buy or renew, ask:
- Is my classification code accurate?
- Are subcontractors included in my rating?
- Do I need endorsements for my industry?
- What exclusions apply?
- Can I adjust my limits or deductibles for savings?
We’ll walk you through these details so you’re not left guessing.
Final Thoughts: Protecting Your Business in Dallas and the Surrounding Suburbs
You didn’t start your company to spend time worrying about insurance paperwork. That’s where we come in.
At The Sterling Insurance Group, we help business owners across Plano, McKinney, Allen, Celina, Prosper, and Richardson and Dallas understand their liability coverage, avoid unnecessary costs, and protect what they’ve worked hard to build.
Ready for a Free Commercial Insurance Quote?
Call The Sterling Insurance Group in Dallas, TX today.
Phone: (972) 964-4825
Website: hptts://www.sterlinginsnow.com
Let’s simplify your coverage, clarify your pricing, and make sure your business stays protected without overspending.