General liability insurance protects small businesses from claims, like customer injuries or property damage, that could result in lawsuits or expensive claims.
Owning a small business comes with enough unknowns, but one thing you shouldn’t have to white-knuckle for is the fear of the “uh-oh” moments (or feeling unprepared to grow your business).
That’s where general liability insurance comes in. It’s not just a nice-to-have, it’s a need-to-have, especially if you interact with clients, rent a space, or attend events. But what does it actually cover? And how do you know if it’s right for your small business?
What Is General Liability Insurance for a Small Business?
General liability insurance for small businesses helps cover costs if your business is held responsible for things like customer injuries, property damage, or reputational harm. It’s one of the most common (and most important) types of small business insurance out there!
TL;DR:
- Covers injuries and damages caused by your business
- Commonly required by events, retailers, property managers, and B2B partners
- Pays for medical bills, repairs, or lawsuits
What Does General Liability Cover for Small Businesses?
When accidents happen, general liability insurance is there to back you up. Think of it as your safety net for all those unpredictable ‘what ifs!’
Here’s a quick breakdown to clarify what it covers and what it doesn’t.
| ✅ What It Covers | ❌ What It Doesn’t Cover |
|---|---|
|
Bodily injury |
Product-related claims |
|
Property damage |
Damages caused by your services |
|
Advertising injury |
Employee injuries |
|
Legal defense costs |
Vehicle accidents |
|
Unexpected weather |
Damage to gear and equipment |
|
Rental damages |
Intentional wrongdoing |
While general liability can’t cover everything, it does cover many of the common issues we see small business owners run into. This includes:
- Bodily injury: A customer slips on a wet floor in your studio and is injured
- Property damage: You knock over a vase when dropping off a birthday cake at a customer’s home
- Advertising injury: A competitor claims your slogan sounds too similar to theirs, and they sue for copyright
- Legal defense costs: Someone tripped over your camera gear in the park and sued for the medical expenses and lost wages it cost them
- Unexpected weather: A gust of wind sends your pop-up tent into a nearby parked car and scratches it
- Rental damages: A venue claims your DJ setup damaged their floors and wants you to pay for the repairs
3 Ways General Liability Boosts Your Small Business
#1: General liability gives you coverage for claims
Accidents, lawsuits, and property damage could lead to major financial loss (or even closure)
#2: General liability gives you room to grow
Say ‘yes’ to new clients, projects, or events with confidence
#3: General liability gives you professional credibility
Have your proof of insurance at the ready whenever someone asks to see it
Do I Really Need General Liability Coverage?
Yes, really! Without insurance, your dreams of owning a small business could turn into:
- Thousands in out-of-pocket costs
- Lost time, business, or reputation
- The stress of navigating legal chaos alone
General liability is the most common type of insurance you’ll be expected to carry when you partner with or interact with other businesses. This includes finding a manufacturer to produce your art prints for wholesale or finding a farmers market to park your food truck at.
It’s also the base of many types of small business insurance policies. General liability is often bundled with other coverages, like product liability or professional liability, to provide your business with the niche protection it needs.
Which Types of Businesses Need General Liability the Most?
Every business can benefit from general liability insurance because nearly every business interacts with people, property, or the public. That being said, here are the most common business types we protect with general liability coverage (but it’s certainly not limited to these):
General Liability Risk Reality Check
Are you covered where it counts?
Check Your Business
- Customers or clients visit your location
- You work in privately owned or public spaces
- You sell products or provide services
- Clients or partners ask for proof of insurance
- You attend markets, expos, or vendor events
Check Your Risks
- Someone could get hurt around your workspace
- You could damage someone’s property while working
- You advertise your business online or in print
Check Your Reputation
- You want to appear professional and prepared
- You’re aiming to grow or take on bigger projects
- A lawsuit could seriously hurt your finances
If you can say “yes” to any of the points above, you’re already facing real-world risks! It’s time to start exploring general liability insurance options for your small biz.
Common Myths About General Liability Insurance
Let’s bust some common insurance myths and clear the air on why you need general liability coverage.
“I’m just a start-up / This is only a side gig / It’s not a full-time hustle.”
Even start-up businesses face risks, whether you work from a studio apartment or sell your products in a retailer’s storefront. Having general liability insurance means you’re prepared for anything, and you’ve got the professional credibility to start growing when you’re ready.
“I operate remotely and don’t see clients in person, so I’m safe.”
While it’s true that a remote business you run from home is a lot safer than a manufacturing business, you still carry risks. If you ever meet clients off-site, deliver goods, offer pick-ups, or decide to attend an event, you’ll want a policy.
Accidents don’t care about an address; they can happen anywhere, any time! No matter where you call “headquarters,” GL insurance covers you from the unexpected.
“I have an LLC already, so this feels like overkill.”
What’s really overkill is paying out of pocket for a $54,000 lawsuit when you could’ve been protected for $20 a month. LLCs protect your personal assets from becoming business-related collateral, but they can’t financially help you pay for damages, lawsuits, or medical bills.
How Much Does Small Business General Liability Insurance Cost?
The average cost of general liability insurance for a small business starts around $20 per month with Insurance Canopy. For roughly the same price as your weekly latte habit or a fast food lunch, you could insure your small business!
Not every business has the same price tag on its policy, though. Different businesses carry different risks, so your premium is unique to you. Factors that determine your total insurance costs include:
- Annual revenue: The more you make, the more likely you are to have higher risks
- Business operations: What your business does can play a role in how much insurance you need
- Claims history: Having a history of claims can increase your premiums
- Coverage limits: Raising your limits or adding additional coverage comes with an added price
- Industry: Some jobs are higher-risk than others, like how personal training tends to be riskier than selling t-shirts online
- Location: Working entirely from home vs attending events or selling products in stores can impact your overall costs
Think of the cost of insurance as an investment in your peace of mind. Around 43% of all small businesses are threatened with a lawsuit every year. Legal battles can pause normal operations, cause financial strain, or force it to close its doors forever. The cost of insurance is far less than the cost of a claim!
Did You Know?
75% of small businesses in America are underinsured — are you one of them? Don’t get caught in a claim without coverage. Invest in small business general liability insurance today!
How to Get General Liability Insurance for Your Small Business
Getting covered is easier than you think! Most businesses can get a custom quote and purchase a policy in just a few clicks.
Here’s how to get your free quote started today:
- Find your industry
- Tell us about you and your business
- Get an instant quote, or receive a custom quote from an agent within 24 hours
Feeling confident and ready for coverage? Get a custom quote today by selecting your industry below.
FAQs About Small Business General Liability Insurance
What Is General Liability Insurance?
General liability insurance is business insurance that helps cover third-party injuries, property damage, and legal claims.
What Does General Liability Cover for a Small Business?
For a small business, general liability typically covers:
- Bodily injury
- Property damage
- Advertising errors
It’s designed to cover the cost of claims caused by your business operating in, with, or around the public (whether it’s one person or one thousand!).
Is General Liability Insurance Required By Law?
No, general liability insurance is not required by law, but it’s strongly recommended for risk protection. You may be required to carry it by landlords, clients, or event venues. Most business partnerships, like with retailers or suppliers, won’t work with uninsured businesses.
How Much General Liability Insurance Does a Small Business Need?
The amount of general liability insurance a small business needs depends on:
- Your business activities
- Your industry
- Your annual revenue
- Your location
- Your coverage needs
- Your claims history
Generally, most small businesses start with a minimum of $1 million in liability coverage and add to it from there.
How Do I Get General Liability Insurance?
You can get general liability insurance entirely online with Insurance Canopy by filling out an application. You can also compare quotes from more than one provider to see who offers the type of plan you’re looking for!
