You already know what I’m going to say. You clicked on a link to this article, posted by an insurance company, so I know you know the answer is yes.
“But, why do all small businesses seem to need insurance? Isn’t there such a thing as too small to need insurance?!” — A thought by you, probably, (but also thousands of other entrepreneurs).
The truth is, TONS of small businesses face lawsuits every year. So yeah, you do need general liability for that small business of yours! It’s the smartest way to keep your dreams safe and your finances secure.
General liability insurance is a type of coverage that protects your business if someone gets hurt, property is damaged, or you find yourself named in a lawsuit. All small businesses (even one-person operations) can use it to keep their time, money, and reputation safe.
“I’m Just One Person, Do I Really Need Insurance?”
A lot of small business owners feel this way at first. And the answer is yes, you need insurance if you plan to sell a product, offer a service, or run a small business in any way, shape, or form.
If you’ve ever thought…
“I don’t have a storefront. I don’t have employees. My clients would never sue me. I’m not big enough to ever have a claim. So, I don’t need insurance.”
…You’re not alone, but here’s the thing: risk doesn’t care about the size of your business.
All it takes is one accident. One injury, one complaint, one angry customer, or one lawsuit. Are you ready to handle the financial impact of something going wrong?
“Whether you are a hobbyist, just trying out a side hustle, new in business, or a seasoned small business owner, insurance is the single best way to protect what you’ve built. It keeps your business, assets, and livelihood from taking the hit if a claim comes your way. One lawsuit, frivolous or not, can wipe out an entire year’s worth of revenue. Liability insurance steps in to help with those costs, so you don’t have to shoulder it alone.”
—JoAnne Hammer, Certified Insurance Counselor (CIC)
What General Liability Does (And Doesn’t) Cover
General liability is one of the most common (and most important) types of small business insurance. It keeps your business covered for:
- Bodily injury: Someone gets hurt around your business
- Property damage: You damage something at a client’s place
- Damage to rented premises: Your set-up damages a rented venue or event space
- Medical expenses: Your policy pays for medical bills if someone’s hurt by your business, regardless of fault
- Personal and advertising injury: Someone says you stole their content
- Legal expenses: Your policy helps pay for lawyers and settlements
| ✅ Covered | ❌ Not Covered |
|---|---|
|
Bodily injuries |
Employee injuries |
|
Property damage |
Damage to business property |
|
Damage to premises rented to you |
Product injuries or damages |
|
Medical expenses |
Accidents caused by serving alcohol |
|
Personal and advertising injury |
Contractual obligations |
|
Legal expenses |
Work cars, trucks, or vans |
It doesn’t matter if you’re a one-person team or a growing crew. If a claim is filed against you, the costs can add up (and fast!). General liability is often the first line of defense against a claim.
What Happens If I Skip General Liability Insurance?
No one starts a business expecting something to go wrong. But when it does, not having insurance can turn a small claim into a big financial setback.
You’re dog sitting as a side hustle. During some enthusiastic play time with a pup, you accidentally trip and knock over your client’s $2,000 TV. Meanwhile, Fido is still trying to show you his ‘zoomies.’ Do you have a backup plan besides Venmo and panic?
You sell handmade lotion at a local pop-up. One of your samples spilled, and a customer slips on the residue and rips her designer jeans. Now she says you owe her for a trip to urgent care and the mall. Are you ready to fork over the cash?
You’re taking wedding photos at the beach. You back up for the perfect shot, and tumble into a family picnicking on the sand. Unless you’re ready to pursue a new career as a “baby sitter,” the lawsuit alone could cost you your business.
You just started to DJ as a hobby. You’re spinning tunes at a local party, but the owner shows up and says your equipment scratched their floors. The repair bill? $3,200 and a big one-star review.
Average Cost of Small Business Claims
43% of small businesses are threatened with a lawsuit every year. Even if you’ve done nothing wrong, the cost to defend your business can add up fast. It makes getting insurance a valuable part of your day-to-day protection plan!
| Claim Type | Average Cost |
|---|---|
|
Slip and fall injury |
$3,000–$10,000 |
|
Property damage |
$2,000–$5,000 |
|
Personal injury lawsuit |
$5,000+ |
Is General Liability Insurance Ever Legally Required?
Sometimes — it’s not legally required by the government for small businesses to have general liability insurance, but there are plenty of other situations where you’ll be required to have it:
- Booking a vendor booth at a festival or farmers market
- Landing a partnership with another business
- Working in public spaces or rented venues
- Meeting contractual obligations with client
- Booking an exhibitor table at an expo or trade show
- Fulfilling state licensing requirements (depending on the profession)
- Obtain a business license from local city or county government (depending on the business)
Pro Tip: Some industries, states, and events have strict rules about having insurance. Always double-check local laws or ask event organizers to keep your business compliant.
How Much Does It Cost, and How Can I Save?
On average, general liability insurance costs around $18 per month with Insurance Canopy. If you only need coverage for a day or a few events here and there, our short-term general liability starts at $49 per event.
We know money matters when you’re just starting out or running your own operations. We started as a small business ourselves! Luckily, general liability is one of the most affordable and flexible coverages available to you.
You can choose a policy that fits your budget and the way you work. Whether you’re doing a few pop-ups a year or looking to run your solopreneur business full-time, our coverage works when and where you do.
What Types of Small Businesses Need General Liability Insurance the Most?
Spoiler: almost every type of small business needs general liability insurance. But if you’ve read this far, you already knew that!
Insurance isn’t just for the big businesses; it’s for the big dreamers, risk takers, and brave entrepreneurs, too. That includes:
- Artists and crafters
- Bakers
- Bartenders
- Beauty professionals
- Cleaners and pressure washers
- Consultants, life coaches, and mentors
- DJs, entertainers, and performers
- Ecommerce and online sellers
- Educators and tutors
- Freelancers and independent contractors
- Fitness coaches and personal trainers
- Food businesses
- Landscapers
- Mobile services
- Pet professionals
- Photographers
- Vendors and exhibitors
- Videographers
If any of these sound like you, you’re at risk for the type of claims general liability insurance covers!
How to Get Custom General Liability Coverage
Getting insured might sound intimidating, but it’s super simple and doesn’t change any “classification” for you. So if you’re worried about being seen as an “official business” in the eyes of the IRS or government, you’re still a hobbyist, start-up, or side hustle for now (insurance doesn’t change that, your business income does).
With Insurance Canopy, you can get covered with a custom policy in minutes:
- Fill out a quick form online
- Tell us about your business
- Choose your coverage details
- Securely pay online
- Get an instant Certificate of Insurance
Most businesses are quoted and covered instantly, but some may receive a custom quote from our team of licensed agents in as little as 24 hours!
That’s it. No long calls, no piles of in-person paperwork, no stress. Just real coverage for real people, all in your hands.
FAQs About General Liability for Small Businesses
What’s the Difference Between General Liability and Product Liability Insurance?
The difference between general liability and product liability insurance is what’s covered:
- General liability covers claims caused by your business operations
- Product liability covers claims caused by products you make or sell
Some businesses need both, but all businesses should have general liability at a minimum. You should get product liability if you produce, distribute, or sell products.
Do I Still Need General Liability Insurance If I Work From Home?
Yes, you still need general liability insurance if you work from home. Home-based businesses can be responsible for customer injuries, property damage, or advertising claims, no matter how small you are.
If you attend events, offer pick-ups from your home, or take your work to other locations, general liability is a must!
Is General Liability the Same as Business Insurance?
No, general liability is not the same as business insurance. General liability is just one type of insurance that businesses may need, whereas small business insurance is a bundle of various insurance coverages.
Your business may need product liability, professional liability, or tools and equipment coverage, depending on what you do. All of these can be combined with general liability into one business insurance policy.
Do Sole Proprietors Need General Liability Insurance?
Yes, sole proprietors need general liability insurance! Your personal assets and finances could be on the line if your business is sued. General liability can cover legal expenses, keeping your personal assets separate and protected.
How Do I Prove I Have General Liability Insurance?
You can prove you have general liability insurance by showing your Certificate of Insurance (COI). When you purchase a policy, you will receive a certificate that you can show to clients, venues, or event organizers.
