Best General Liability Insurance For Small Business Of 2024 (2024)

A lawsuit over a problem like an accidental injury could financially ruin a small business. General liability insurance covers your small business for claims of accidental injuries and property damage to others, as well as other types of claims against you, such as reputational harm.

We evaluated 20 large insurers to help you find the best general liability insurance for a small business.

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• Best General Liability Insurance for Small Business 2024
• Comparison: Best General Liability Insurance for Small Business
• What Is General Liability Insurance and How Does it Work?
• What Does General Liability Insurance Cover?
• What Does General Liability Insurance Not Cover?
• What Businesses Need General Liability Insurance?
• How Much Does General Liability Insurance Cost?
• How to Get the Best General Liability Insurance
• The Risks of Not Having General Liability Insurance
• General Liability Insurance Policy Limits
• General Liability Insurance Claim Examples
• Terms to Know When Shopping for Business Liability Insurance
• Methodology
• Business Liability Insurance Frequently Asked Questions
• Next Up In Business Insurance

• Allstate
  
• CNA
  
• Farmers
  
• Frankenmuth
  
• The Hanover
  
• Westfield
  
• Markel
  
• Nationwide
  
• Chubb
  
• Travelers

General liability insurance is a type of small business insurance that covers your business for accidental injuries and property damage caused to others. It also covers other problems such as advertising injury, copyright infringement and reputational harm.

These types of claims may result from your company’s products, services or operations. Without general liability insurance, you could end up paying out of your business’s income and, in a worst case scenario, even go bankrupt.

General liability insurance is sometimes called “business liability insurance” or “commercial general liability insurance.”

If someone makes a claim against your business for a problem, such as the ones listed above, your general liability policy will kick in. It will pay claims up to your policy limit. When you buy a policy, there are generally two limit types to be aware of:

• Per-occurrence limit. This is the maximum amount your insurer will pay out for a single claim, such as a per-occurrence limit of $1 million.
• Aggregate limit. This is the maximum amount your insurer will pay for all the claims filed during your policy period. For example, if your aggregate limit is $2 million, your insurer will not pay above that amount during your policy period, no matter how many claims were filed against you.

General liability covers a wide range of problems, including accidental injuries and property damage to others, as well as lawsuits for problems like claims of defamation or libel.

	Bodily Injury If your business is responsible for an accidental injury to someone else, your general liability insurance covers their medical costs and your legal costs if you get sued. For example, if a customer trips over an object in your store.
	Property Damage If your business accidentally causes property damage to someone else, your general liability insurance pays to repair or replace the property, as well as any legal costs if you are sued. For example, if your employee accidentally damages a client’s furniture.
	Advertising Injury This covers your legal costs for claims that your business defamed another business owner, company or person.
	Copyright Infringement This covers your legal costs for claims that you used someone else’s work for business marketing without their permission.
	Reputational Harm This covers your legal costs for claims, such as libel, slander, privacy violations, wrongful eviction and malicious prosecution.

General liability insurance covers a lot for a business, but it won’t cover business-related auto accidents, employee injuries and illnesses, damage to your business property, mistakes in professional services, claims that exceed your policy limit or illegal acts by you or your employees.

For these kinds of problems, you’ll need different types of business insurance, including:

• Employee injuries and illnesses. You need workers compensation insurance to provide coverage for employee injuries.
• Auto accidents. For auto accidents while doing business, a commercial auto insurance policy financially protects you if you own the vehicle. A hired or non-owned auto insurance covers a personal car or a rented car for work.
• Professional mistakes. An errors and omissions insurance (E&O) policy provides coverage if you make mistakes in the course of your work. An E&O policy is sometimes called professional liability insurance.
• Theft and damage to your business property. General liability insurance won’t cover your business equipment or property against theft or damage. You need a commercial property insurance policy to cover these types of problems.

Insurance won’t cover intentional acts, such as a computer you throw out the window. And general liability insurance won’t help if there are deliberate, illegal acts or wrongdoings by you or your employees.

There are a handful of scenarios where general liability insurance policy is necessary for your small business:

• Your clients require you to have business liability coverage.
• Your small business is open to the public.
• You work with vendors or clients.
• You use social media professionally or personally.
• You use third-party locations for business activities.
• You have temporary or seasonal employees.
• You work with independent contractors.
• You advertise and market your business.

General liability insurance is an indispensable coverage type for just about any business. For example, a contractor insurance policy without general liability wouldn’t cover property damage you accidentally cause at a client’s site. More examples of business types that need general liability insurance include:

• Accountants or tax preparers
• Consultants
• Contractors
• Freelancers
• Electricians
• Handymen
• Home inspectors
• Janitorial services
• Landscaping companies
• Lawyers
• Marketing agencies
• Real estate agents
• Small business owners
• Technology professionals

The average cost for general liability insurance is $42 per month, according to Insureon. That’s $504 per year, but your small business’s costs may be cheaper. More than a quarter (29%) of Insureon small business customers pay less than $30 per month. Less than half (41%) pay between $30 and $60 per month, and 30% pay more than $60 per month.

Your general liability insurance costs will depend on factors such as:

• Your business type. High-risk businesses (such as construction) typically pay more than low-risk businesses (such as a graphic designer).
• Years of experience. The number of years you’ve been working as a professional in your field can impact your premium.
• Location. If your company is located in a low-crime neighborhood or in a low-traffic area, your premium might be cheaper than if it were in a high-crime, high-traffic one.
• The insurance claims history for your business. If you have a history with a high number of insurance claims, you can typically expect to pay more for general liability insurance.
• Amount of coverage. Higher annual coverage limits will impact your costs.

Examples of General Liability Costs by Industry

General liability insurance is the foundation of your small business insurance plan. You can find a good policy by following these steps.

Gather Your Information

You’ll need to have basic information and documentation, including:

• Your contact information.
• Details on what your business does.
• The number of years you’ve been in business.
• Number of employees.
• Payroll documentation.
• Estimated business revenue for the upcoming year.
• The number of years you have owned the business.
• Whether you own or rent the building where your business is located.

Consider a Business Owners Policy

A general liability insurance policy is foundational coverage for your small business, but it won’t cover problems like theft, vandalism, fire, severe weather and lost income. If you want coverage for these types of issues, you’re going to need to buy additional coverage.

A good way to do this is by purchasing a business owners policy (BOP), which bundles general liability insurance with commercial property insurance and business interruption insurance. It’s typically cheaper to buy a BOP than to buy all three policies as standalone policies.

Compare General Liability Insurance Quotes

Small business insurance companies don’t price their policies the same. The best way to find a good price on a general liability insurance policy or a BOP is to compare business insurance quotes from multiple companies. You can get free business insurance quotes online or by speaking with an independent insurance agent.

Is General Liability Insurance Required by Law?

Business liability insurance isn’t required by law, but if you fail to buy coverage, you’re leaving your business vulnerable to a wide variety of costs that could potentially bankrupt your business.

Facing judgments, legal settlements and lawyer fees without the aid of general liability insurance can be very expensive and even bankrupt a business. Legal counsel can cost more than $100 an hour. Court costs may exceed $75,000 if the claim goes to court, and you may need to spend several thousand dollars even if a lawsuit is dropped, according to The Hartford.

Not having general liability insurance puts your business at financial risk. And you may lose clients because they won’t do business with you if you don’t have general liability insurance.

To prove that you have insurance coverage, you’ll need a certificate of insurance. This official document lists all the coverage types and limits on an insurance policy.

Related: Builder’s Risk Insurance: Definition, Coverage And Cost

If you purchase general liability insurance, it’s important to be aware of two types of limits.

• Per-occurrence limit: This is the maximum amount that your insurance company will pay out for a single claim. If your per occurrence limit is $1 million, your insurance will cover up to that amount per incident.
• Aggregate limit: This is the maximum amount your insurance company will pay out for all the claims you file during your policy period. If your aggregate limit is $2 million, your insurance company will not pay you more than that amount regardless of the number of claims against you. Most general liability insurance policies have a term of one year, so the aggregate limit would apply for that period.

• Bodily injury claim. A customer browsing your store bumps into a shelf, causing a heavy object to fall and hit their foot, breaking their big toe. Your general liability insurance can cover the customer’s medical costs as well as any legal costs, judgments and settlements that arise out of the incident.
• Copyright infringement claim. You create business marketing material and someone claims you used their artwork without permission. General liability insurance can help cover the costs of a lawsuit, including your legal defense, judgments and settlements.
• Property damage claim. Your workers move a large appliance into a client’s home and in doing so, damage your client’s hardwood flooring and walls. Your general liability insurance can kick in to cover the damages.
• Reputational harm claim. While doing press to promote a big sales event at your business, you say something about another business, which results in a lawsuit for slander. General liability can help pay for your legal defense, judgments and settlements.

• Business liability coverage: Another term for general liability insurance, which covers accidental injuries and property damage to others, copyright infringement, reputational harm and advertising injury.
• Business owners policy: Specific type of policy that packages together multiple coverages, including general liability coverage, business interruption insurance and business property insurance. You may also add other coverage types, such as workers compensation, professional liability, commercial auto and data breach insurance.
• Commercial umbrella insurance: An additional policy that kicks in when a claim exceeds the coverage amount of an underlying policy. For example, if a claim exceeds your general liability limit, your commercial umbrella insurance can cover the difference.
• Employment practices liability insurance: This policy covers settlements for claims that your business wrongfully terminated an employee or violated their rights. Employment practices liability insurance also covers your legal costs for these claims.
• Exclusions: This is a restriction on your policy that limits or fully excludes coverage for specific events, locations, people or property. For example, a general liability insurance policy excludes coverage for employees who are injured on the job (that’s covered by workers comp).
• General liability classification code: A code based on your industry that helps an insurer determine your business’ risk level.
• Medical payments insurance: This covers medical expenses when your company is responsible for injuries to someone else (not including your employees).
• Personal and advertising injury liability: This covers claims such as an employee speaking or publishing inaccurate information that libels or slanders an organization or person. It also covers claims that published material infringes on a copyright, results in a wrongful eviction or violates a person’s right of privacy.
• Property damage insurance: This covers accidental damage to someone else’s property. For example, if your employee damages someone’s home while working at a jobsite.
• Subrogation: Your insurance company might try to recoup money it paid on a claim from the insurance company of the party that was responsible for the injuries or damage.

We rated the largest business insurance companies based on complaint data for commercial liability insurance. Complaint data is based on complaints upheld by state insurance departments across the country and collected by the National Association of Insurance Commissioners.

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