How much general liability insurance should a small business have?
Asked by: Theo Kuvalis | Last update: July 28, 2025Score: 4.1/5 (4 votes)
How much general liability insurance do I need for a small business?
General liability insurance with $1 million / $2 million limits is the most popular option for small businesses. This includes: $1 million per-occurrence limit. While the policy is active, the insurer will pay up to $1 million to cover any single claim.
How much is a $2 million dollar general liability insurance policy for a business?
On average, an insurance policy that offers coverage for up to $2 million can cost about $30 a month in premiums.
How much insurance do I need for an LLC?
The insurance needed for small business depends on the type of small business you run and the risks it faces. Be aware that LLCs may be required to have certain types of business insurance. For example, most states require businesses with employees to have workers' compensation insurance.
What are standard general liability limits?
Typical limits in a contract require a minimum of $1,000,000 per occurrence and $2,000,000 aggregate (1M/2M).
General Liability Insurance Explained in 10 Minutes
What insurance do I need to run my own business?
When you're starting your own business, some types of coverage you should make sure to have are: General liability insurance. Professional liability insurance. Workers' compensation insurance.
What is the best small business insurance?
- Best for variety of plans: Nationwide.
- Best for online experience: Next Insurance.
- Best for home-based businesses: The Hartford.
- Best for independent contractors: Hiscox.
- Best for medium-sized businesses: Chubb.
- Best for customer satisfaction: State Farm.
- Best for worker's compensation: Travelers.
How much is a 5 million dollar liability insurance policy?
Average Cost
While a $1 million policy might cost around $1,000 annually, a $5 million policy can range from $2,000 to $2,500 per year.
How does general liability work for small business?
General liability insurance helps protect you from claims that your business caused bodily injury or property damage. It can also protect you if someone sues you for advertising injury. Commercial property insurance covers your business' physical location and equipment, whether you own or lease it.
What does $1 million liability cover?
A $1 million general liability insurance policy means your insurance company will provide financial protection for your business up to $1 million in covered losses or damages. Beyond that $1 million limit, you'll have to pay for costs out of pocket without the help of your insurer.
Should my small business have business income insurance?
Business income insurance is an essential type of coverage for small business owners to have. If you can't operate because of covered property damage, this insurance can help replace lost income, which you can use to help pay for necessary business expenses. This includes: Payroll.
Why is my business insurance so high?
Your prior claims history.
Insurance companies will also look at your past claim history, if you have one. For example, if you've been sued a number of times for mistakes you've made in providing services, an insurer may consider this a trend that will continue and charge higher premium for the higher risk presented.
What is small business insurance called?
Small business insurance, sometimes called commercial insurance, helps protect a business's assets, property, and income. A business owner's policy (BOP) is the most common insurance product for small businesses, according to the Insurance Information Institute (III).
Can you legally run a business without insurance?
While there is no federal law mandating business insurance, many states and local jurisdictions have specific regulations in place. Additionally, certain types of insurance, such as workers' compensation, may be mandatory at the state level.
What is the most basic form of business insurance?
Most businesses need general liability insurance, and your state's laws may require workers' compensation insurance and commercial auto insurance. But you may need other types of coverage depending on what your business does, where it operates, what kinds of assets you have and other factors.
Can I self insure my business?
Some large businesses may choose to self-insure to save money and control costs for their commercial property, auto and general liability coverages. When a business chooses this route, they don't buy a plan from an insurance company.
How much liability coverage does the average small business need?
General liability insurance: Most small businesses choose $1 million per occurrence and $2 million aggregate limits.
Do you need insurance to start a small business?
As a general rule, you should insure against things you wouldn't be able to pay for on your own. This coverage protects against financial loss as the result of bodily injury, property damage, medical expenses, libel, slander, defending lawsuits, and settlement bonds or judgments.
What percentage of business income should go to insurance?
In general, small businesses can expect to pay anywhere from 1% to 5% of their annual revenue for business insurance. However, this is just a general guideline, and the actual percentage can vary greatly depending on the factors mentioned above.
What is GA liability minimum?
The minimum limits of liability insurance required under Georgia law are: Bodily Injury Liability – $25,000 per person and $50,000 per incident. Property Damage Liability – $25,000 per incident.
What is the standard general liability insurance?
Typically, general liability policies provide: Premises liability coverage, which offers protection against the costs of injuries on your business property. Products liability coverage, which offers protection against the costs of damage to property and injury to people caused by your products or services.
What is a standard CGL policy?
A Commercial General Liability (CGL) policy protects your business from financial loss should you be liable for property damage or personal and advertising injury caused by your services, business operations or your employees. It covers non-professional negligent acts.