General Liability Insurance

General liability insurance protects your business from financial losses due to claims of bodily injury, property damage, or advertising harm.

It’s one of the most essential and commonly purchased types of business insurance, providing a safety net for everyday risks that could otherwise lead to costly lawsuits.

What Does General Liability Insurance Cover?

General liability insurance protects your business from some of the most common risks you face when dealing with the public.

It’s designed to cover third-party claims, those made by people who aren’t part of your business, such as customers, vendors, or visitors. Here are the main types of claims it covers:

Bodily Injury

This coverage applies when someone is physically injured at your place of business or as a result of your operations. These are some of the most frequent claims filed by small business owners.

For example, if a customer walks into your retail store, slips on a recently mopped floor, and breaks their wrist, they may file a claim for medical expenses and lost wages. Your general liability policy would help cover those costs, potentially saving you from paying thousands out of pocket.

Reputational Harm

Reputational harm includes defamation claims, such as libel (written) or slander (spoken), as well as allegations of privacy violations or wrongful eviction. If your business publicly criticizes a competitor on social media or posts a negative blog review that causes them to lose customers, they might sue for damages.

In that case, your general liability insurance would help cover the legal defense and possible settlement.

Property Damage

If your business operations accidentally damage someone else’s property, this part of your policy helps cover the cost to repair or replace it. For instance, imagine a landscaping crew hired by your company breaks a client’s window with a weed trimmer.

The client expects you to pay for the damage. With general liability insurance, you’re covered for the repair costs.

Advertising Injuries

This coverage protects you if someone accuses your business of libel, slander, or copyright infringement in your marketing materials. Suppose your company uses an image found online in an ad, not realizing it’s copyrighted. If the image owner sues you for unauthorized use, general liability insurance can help pay for legal expenses and damages.

Medical Payments

Medical payments coverage is a smaller, no-fault portion of your policy designed to quickly resolve minor injuries without legal battles. It pays for medical expenses when someone is hurt on your premises, regardless of who was at fault.

For example, if a delivery driver trips on a loose floor tile in your office lobby and needs a trip to urgent care, your policy can help cover the cost—even if they don’t plan to sue.

Each of these coverages addresses a different kind of risk, but together they help protect your business from unexpected costs that could otherwise cause major financial strain.

What Does General Liability Insurance Not Cover?

While general liability insurance offers broad protection, it doesn’t cover everything. Several types of risks are specifically excluded and require separate policies or are simply uninsurable.

Here’s a quick reference chart to help you see what’s typically covered—and what’s not:

Common exclusions to be aware of include:

• Employee injuries handled by workers’ compensation insurance.
• Professional errors, like giving bad advice or making a costly mistake in service, which are covered by professional liability insurance.
• Auto accidents that happen while driving for work requiring commercial auto insurance.
• Damage to your own property, such as office equipment or buildings you own, which needs a commercial property policy.
• Intentional acts, including fraud or harm done on purpose, are never covered by general liability insurance.

In short, general liability covers accidents and unintentional harm to others, but not issues that involve your team, your property, or your professional advice.

Who Needs General Liability Insurance?

If your business interacts with customers, clients, or the general public in any way, whether in person, online, or at someone else’s location, general liability insurance is a smart move. Even if you operate a small or low-risk business, one accident or lawsuit could cost thousands.

This type of insurance provides peace of mind and financial protection for a wide range of professions and industries.

Here are some common examples of who should carry general liability insurance:

Retail Stores

From clothing boutiques to hardware shops, stores see daily foot traffic, increasing the chance of a slip-and-fall accident or property damage. A customer tripping over a display or breaking a toe on a shelf corner can quickly turn into a costly claim.

Restaurants

With hot food, spills, and crowded dining areas, restaurants are high-risk environments. General liability helps cover customer injuries, like burns or slips, and even claims of food poisoning.

Contractors

Electricians, plumbers, landscapers, and other contractors regularly work at clients’ homes or businesses. If a tool damages a client’s property or someone gets hurt on the job site, general liability is essential.

Consultants

Even if you work in a quiet office or remotely, clients may visit your location—or you may visit theirs. If a client trips in your office or claims you damaged their reputation during a project, you could face legal action.

Personal Trainers

Working one-on-one with clients creates the potential for injury. If someone strains a muscle during a workout and blames your training method, general liability insurance can help cover their medical costs and legal fees.

Event Planners

From weddings to conferences, event planners coordinate activities that involve venues, vendors, and large crowds. If someone gets hurt at an event you organized, you could be held liable.

Photographers

A photographer might accidentally damage property during a shoot, like knocking over an expensive vase in a client’s home. General liability helps protect against such mishaps.

Cleaning Services

Whether residential or commercial, cleaning businesses can accidentally damage furniture, floors, or electronics. Spilled cleaning products or slippery floors are also common liability risks.

In short, if your business works with people, steps onto client property, or advertises publicly, general liability insurance isn’t just a good idea, it’s a basic layer of protection you probably shouldn’t be without.

How Much Does General Liability Insurance Cost?

On average, general liability insurance costs $65 to $95 per month, or about $800 to $1,200 per year for small businesses. However, your exact cost can vary widely depending on your industry, location, business size, and risk profile.

Some industries pay more than others because of the nature of their work. For example:

• Contractors and construction businesses often pay higher premiums, typically $1,200 to $2,500 per year, because of the increased risk of physical injuries and property damage.
• Retail stores and restaurants usually fall in the mid-range, with premiums around $700 to $1,200 annually due to customer foot traffic and potential for accidents.
• Consultants, freelancers, and online service providers tend to pay less, often $300 to $600 per year, since their risk of bodily injury or property damage is lower.

Several key factors affect your premium:

• Industry and risk level: Higher-risk industries pay more.
• Business size and revenue: More employees or customers mean more exposure.
• Location: Rates vary by state and even city.
• Claims history: A history of past lawsuits or claims can drive up costs.
• Coverage limits and deductibles: Higher limits mean higher premiums.

Example: A solo marketing consultant working from home with no client visits might pay around $350 per year for basic general liability coverage. In contrast, a small landscaping business with three employees, company vehicles, and frequent client property visits could pay $1,500 to $2,000 per year, depending on their location and claims history.

Generally, the more physical interaction your business has with customers or the public, the more important, and potentially more costly, your coverage may be.

Is General Liability Insurance Required By Law?

General liability insurance is not legally required by state law in any U.S. state for all businesses, but many businesses must carry it to meet lease terms, contract agreements, licensing rules, or to qualify for business programs. Here’s a breakdown:

Claims Examples: Real-World Scenarios

To understand how general liability insurance works in practice, here are a few real-world examples of claims that triggered coverage:

The Plumber And The Burst Pipe

A plumber was repairing a valve in a client’s upstairs bathroom when a fitting came loose, flooding the home and causing over $20,000 in water damage. The homeowner filed a claim for repairs and cleanup. The plumber’s general liability insurance covered the damages, sparing him from paying out of pocket.

The Coffee Shop Slip-And-Fall

A customer walking into a neighborhood coffee shop slipped on a freshly mopped floor near the counter. She fractured her elbow and required surgery. She sued the shop for medical expenses and lost wages. The business’s general liability policy covered the claim, including legal fees and a settlement.

The Consultant And The Defamation Claim

A social media consultant posted a negative review about a former client’s business practices, believing it to be honest feedback. The client filed a defamation lawsuit, claiming the post damaged their reputation. General liability insurance helped pay for the consultant’s legal defense and a negotiated settlement.

These types of incidents are more common than most business owners realize—and they show just how valuable general liability insurance can be when things go wrong.

Tips To Save On General Liability Insurance

General liability insurance is a must for most businesses—but that doesn’t mean you have to overpay. Here are some practical ways to lower your premium without sacrificing coverage:

Bundle With Other Policies

Many insurers offer a business owner’s policy (BOP) that combines general liability with property insurance. Bundling these coverages usually costs less than buying them separately.

Improve Safety Procedures

Implementing strong safety practices, like regular employee training, warning signs for wet floors, or routine equipment checks, can reduce your risk of claims. Fewer claims often lead to lower premiums over time.

Increase Your Deductible

Choosing a higher deductible means you’ll pay more out of pocket if a claim occurs, but your monthly or annual premiums will usually be lower. Just make sure you can afford the deductible if something happens.

Shop Around Annually

Insurance rates and offerings can change. Compare quotes through Insuranceopedia from different providers each year to make sure you’re still getting the best value for your coverage needs.

Maintain A Clean Claims Record

Avoiding claims helps keep your rates down. Document incidents, fix hazards promptly, and resolve small issues before they turn into formal claims.

By following these tips, you can get the protection your business needs at a price that fits your budget.

What Other Business Insurance Policies Do You Need?

While general liability insurance covers many of the most common third-party risks, it’s not a catch-all. Depending on your industry, how you operate, and whether you have employees or valuable property, you may need other types of business insurance to stay fully protected.

Here’s a breakdown of the most common policies business owners should consider:

Workers’ Compensation Insurance

If you have employees, most states require you to carry workers’ comp insurance. It covers medical expenses, rehabilitation, and lost wages if an employee gets injured or sick on the job. Without it, you could face fines, or worse, be on the hook for costly lawsuits.

Professional Liability Insurance

Also known as errors and omissions (E&O) insurance, this policy covers claims of negligence, bad advice, or mistakes made while delivering professional services. It’s a must for consultants, accountants, architects, and anyone whose expertise forms the core of their business.

Business Owner’s Policy (BOP)

A BOP bundles general liability insurance with commercial property insurance and often includes business interruption coverage. It’s designed for small to midsize businesses and usually comes at a lower cost than buying each policy separately.

Cyber Insurance

If your business stores customer data, processes online payments, or relies on digital systems, cyber insurance is worth considering. It covers data breaches, cyberattacks, and the legal and recovery costs that come with them.

Business Equipment Protection

Sometimes included in a property policy or available as an add-on, this coverage protects tools, electronics, and machinery you use to operate. Whether it’s laptops for a graphic design studio or power tools for a contractor, equipment protection keeps your essential gear covered from theft or damage.

Commercial Property Insurance

This covers your building (if you own it) and the physical contents of your business—like inventory, furniture, and fixtures. It protects against losses due to fire, vandalism, storms, or theft. Even if you rent, this insurance can cover your business property inside the space.

Commercial Umbrella Insurance

Umbrella insurance provides an extra layer of protection by extending the limits of your existing liability policies. If a claim exceeds your general liability coverage, your umbrella policy can step in to cover the rest, helping you avoid paying out of pocket.

Each of these policies plays a specific role in keeping your business protected. The right mix depends on what you do, how you do it, and what you can’t afford to lose.