General liability insurance: what it covers, who needs it and what it costs
General liability insurance pays when someone outside your business says you hurt them, damaged their property, or harmed them with something you published, such as a defamatory review reply or an ad that copies a competitor's slogan. It pays the claim and the lawyers. Many owners first buy it because a landlord or client asks for proof. Insureon's small-business customers pay a median of $45 a month for it, though a roofer can pay several times that (Insureon, page updated 30 March 2026). It is one of the core coverages on our business insurance guide, and it is the liability half of a business owner's policy (BOP).
What it does not do matters as much. GL will not pay for an employee's injury, a crash in your van, a client's loss from bad advice, or a fire in your own shop. Those need other policies, listed in the table further down.
What does general liability insurance cover?
A standard GL policy has three insuring agreements, called Coverage A, B and C in ISO's commercial general liability form, CG 00 01. That form is the one most US policies use, according to Argo Group's guide to the CG 00 01 form. Your insurer's version may add or remove pieces by endorsement, so read your own policy.
| Part of the policy | What it pays for | Plain example |
|---|---|---|
| Coverage A: bodily injury and property damage | Injury to people outside your business and damage to their property, caused by your premises, your operations or the products and work you finish | A customer trips over a cable in your shop; your painter knocks over a client's TV |
| Coverage B: personal and advertising injury | Seven named offences: false arrest, malicious prosecution, wrongful eviction or entry, libel or slander, invading privacy by publishing, using someone's advertising idea in your ad, and infringing copyright, trade dress or a slogan in your ad | A competitor sues because your flyer reuses their tagline |
| Coverage C: medical payments | Small medical bills for people hurt on or next to your premises or by your ongoing work, paid regardless of fault | A visitor cuts their hand on your display rack and you pay the urgent-care bill so it doesn't turn into a lawsuit |
Under Coverages A and B the insurer has the right and the duty to defend you. In the standard form, defence costs are paid on top of your limits, so a long lawsuit does not eat the money set aside for a settlement.
Coverage A splits your risk into two groups. Premises and operations covers what happens at your location or while you work. Products and completed operations covers injury or damage caused after you sold the product or finished the job, such as a shelf you installed that collapses months later. The Texas Department of Insurance describes both groups the same way. If you build, install, repair or sell physical goods, check that your policy's products and completed operations aggregate is as high as your contracts ask.
What general liability does not cover
GL is narrow on purpose. The CG 00 01 form lists its Coverage A exclusions by letter, from (a) to (q), and most of them point to a risk another policy is built to cover. The main ones:
| Excluded risk (CG 00 01 exclusion) | What happens | The policy that covers it |
|---|---|---|
| Injury to your own employees (d, e) | An employee hurts their back lifting stock | Workers' compensation |
| Autos you own, hire or borrow (g) | Your van rear-ends a car on a job | Commercial auto; hired and non-owned auto for staff using personal cars |
| Liquor liability (c) | A bar patron you served injures someone | Liquor liability. The exclusion applies to any business that makes, sells, serves or furnishes alcohol, whatever share of sales the alcohol is |
| Professional mistakes (a financial loss is not bodily injury or property damage) | A client says your advice or design cost them money | Professional liability (E&O) |
| Damage to property you own or rent (j) | A fire destroys your equipment | Commercial property, or a BOP |
| Damage to your own work or product (k, l) | The deck you built has to be rebuilt | Not insurable under GL; GL covers the injury or damage your faulty work causes to others |
| Pollution (f) | Chemicals leak from your site | Pollution or contractors' pollution liability |
| Contractual liability you take on (b) | You agree in a contract to pay for a client's losses | Partly covered: GL covers liability assumed in an "insured contract" as defined in the form; ask your insurer about the rest |
| Electronic data (p) | A hacker steals customer records | Cyber insurance |
| Expected or intended injury (a) | You deliberately damage a neighbour's fence in a dispute | Not insurable |
Recall of your products (n) is excluded too, though some insurers sell it back by endorsement. Claims-made versions, used more for professional liability, change when the policy responds. More on that below.
Who needs general liability insurance?
Almost any business that meets the public, works at someone else's property or sells a physical product. Four situations make it close to unavoidable:
- Customers come to you. Shops, salons, restaurants and studios carry slip-and-fall risk every day they are open.
- You work at the client's site. Contractors, cleaners and tree crews can damage property or injure a homeowner, and clients often ask for a certificate before you start.
- You make, install or sell products. Completed-operations and products claims can arrive long after the sale.
- Someone requires it in writing. A lease, a client contract, an event venue or a licensing board names a GL limit you must carry.
A home-based consultant with no visitors and no physical product has the weakest case for GL alone, though many client contracts still ask for it, and professional liability matters more for that business.
Industry guides with the coverages each trade needs:
- General contractor insurance, handyman insurance and plumber insurance
- Pressure washing insurance and tree service insurance
- Janitorial insurance and carpet cleaning insurance
- Restaurant insurance and catering insurance
- Retail store insurance and hair salon insurance
- Consultant insurance and independent contractor insurance
Is general liability insurance required by law?
Usually not by a general law. No source we checked shows a blanket state rule that every business must carry GL. The requirement normally comes from a lease, a client contract or a licensing rule, and some of those rules are written into statute (see business insurance requirements by state for yours):
| Where | Who | What the rule requires | Source (checked 10 Oct 2026) |
|---|---|---|---|
| Washington | Contractors registering with the state | $50,000 for property damage, $100,000 for injury to one person and $200,000 for injury to more than one person, or an assigned account | RCW 18.27.050 |
| California | Contractors licensed as an LLC | Liability insurance of at least $1 million aggregate for up to five people on the license, plus $100,000 for each extra person, up to $5 million | CSLB, licenses for LLCs |
Leases and client contracts commonly ask for more than these minimums, typically $1 million per occurrence and $2 million aggregate, and many want to be named as an additional insured on your policy. You prove coverage with a certificate of insurance (COI). Our guide to whether general liability insurance is required goes through common contract and license requirements.
How much general liability coverage do you need?
$1 million per occurrence and $2 million aggregate is the usual choice. Insureon calls it the standard for small businesses, and 79% of its BOP customers pick those limits. A typical declarations page looks like this:
| Limit | Common amount | What it caps |
|---|---|---|
| Each occurrence | $1,000,000 | The most the policy pays for one incident under Coverages A and C |
| General aggregate | $2,000,000 | The most it pays in the policy year, except products and completed operations |
| Products and completed operations aggregate | $2,000,000 | The yearly cap for claims from finished work and sold products |
| Personal and advertising injury | $1,000,000 | The cap per person or organization under Coverage B |
| Damage to premises rented to you | Often $50,000 to $100,000 | Fire and similar damage to the space you rent; check your declarations, insurers set it differently |
| Medical expense | $5,000 per person | Coverage C's no-fault medical bills |
Go higher when a contract names a bigger number, when one bad injury could exceed $1 million (roofing, tree work, crowded venues), or when you have assets worth protecting. You can add limits with a commercial umbrella policy on top of GL instead of raising the GL limit itself; ask for both prices.
How much does general liability insurance cost?
Insureon's small-business customers pay a median of $45 a month for general liability, and the industry you are in can multiply that. An online broker and two insurers publish figures from their own customers, and they measure different things:
| Source | Monthly figure | What it measures |
|---|---|---|
| Insureon | $45 | Median premium paid by Insureon's small-business customers (page updated 30 March 2026) |
| Progressive Commercial | $55 | Median premium, new Progressive Commercial customers, 2025 |
| Progressive Commercial | $79 | Average premium, the same customers |
| The Hartford | $68 (about $810 a year) | Average premium, Hartford small-business customers; method not published |
Insureon calls its figure an average in headlines, but its method note says it is the median of policies its customers bought. The gap between Progressive's $55 median and $79 average shows why the label matters: a minority of expensive policies pulls every average up. For a typical small business, the median is the more useful number.
Insureon's spread is wide: annual premiums run from about $250 to over $3,000, 22% of its customers pay under $30 a month and 41% pay $30 to $60.
Industry matters most. Median monthly GL premiums for Insureon's customers by industry, from Insureon's class cost pages (checked 10 October 2026):
| Business | GL median per month | GL median per year | Full cost guide |
|---|---|---|---|
| Consultant | $32 | $384 | Consultant insurance cost |
| Hair salon | $35 | $420 | Salon insurance cost |
| Landscaper | $51 | $610 | Landscaper insurance cost |
| Janitorial / cleaning business | $60 | $725 | Janitorial insurance cost |
| Electrician | $61 | $732 | Electrician insurance cost |
| Handyman | $81 | $978 | Handyman insurance cost |
| Coffee shop / café | $82 | $979 | Coffee shop insurance cost |
| Plumber | $147 | $1,768 | Plumber insurance cost |
| Tree service | $156 | $1,875 | Tree service insurance cost |
| General contractor | $162 | $1,950 | General contractor insurance cost |
| Restaurant | $192 | $2,300 | Restaurant insurance cost |
| Roofer | $317 | $3,808 | Roofer insurance cost |
Insureon's customers are mostly very small businesses, so a larger firm with more revenue or payroll should expect more. For more detail, including what moves the price within an industry, see how much general liability insurance costs, or get a range for your business with the cost estimator.
How insurers price general liability
Five things move a GL premium more than anything else:
- Your class of business. Each business is assigned a classification code that reflects how often that type of business has claims and how large they are. A roofer and a consultant with the same revenue pay very different rates. Look up the code an insurer would likely use with our class code lookup.
- The rating basis. Depending on the class, the rate is applied to your sales, payroll, square footage or number of units.
- Limits and deductible. Higher limits cost more; a deductible lowers the premium.
- Claims history. Past claims raise the price and can limit which insurers will quote.
- Location. Litigation costs and claim frequency differ by state and city.
Most GL policies are auditable. The premium you pay at the start is a deposit based on your estimated payroll or sales; after the policy year the insurer audits the real figures and bills or refunds the difference, as the Texas Department of Insurance explains. Estimate honestly. A low estimate means a bill at audit, and describing your work as something lower-risk than it is can lead to a reclassification or a claim dispute.
Occurrence vs claims-made general liability
Most small-business GL uses ISO's occurrence form, CG 00 01. An occurrence policy covers injury or damage that happens during the policy period, whenever the claim is filed, even years later. A claims-made policy (ISO's CG 00 02) covers claims first made while the policy is in force, so you need continuous coverage, prior-acts coverage when you switch insurers, and a tail (extended reporting period) when you close or stop buying it. TDI notes claims-made policies can be cheaper in the first years. If you are offered claims-made GL, ask why and ask what the tail costs before you buy.
General liability vs a BOP vs professional liability
| Your situation | Usually the better fit | Why |
|---|---|---|
| You have a shop, office or equipment worth insuring and your business is small | Business owner's policy (BOP) | A BOP bundles GL with property and business income cover, and the Texas Department of Insurance says bundles are usually cheaper than buying the parts separately |
| You work from home or on client sites and own little equipment | GL on its own | Nothing much to insure on the property side |
| You are too large or too hazardous for a BOP | GL inside a commercial package policy | Same coverages with room for higher limits and specialist parts |
| You give advice, designs or professional services | GL plus professional liability | GL covers physical injury and damage, E&O covers financial loss from your work |
Small contractors can often get a BOP too, within ISO's payroll and building-height limits; the BOP guide lists ISO's eligibility rules. For a side-by-side of liability types, see general liability vs professional liability.
Will an insurer write general liability for your industry?
For most industries, yes. In QuoteSweep's appetite dataset, we only count a carrier's stance when we read it on the carrier's own product page for that industry. On those pages, checked 4 to 9 March 2026:
| Industry | Carriers with a product page we checked | List general liability | Rated "limited" appetite |
|---|---|---|---|
| Restaurants | 19 | 17 | Travelers |
| Retail stores | 16 | 16 | None |
| Professional services | 17 | 17 | None |
| Technology companies | 18 | 17 | None |
| Real estate | 12 | 12 | None |
| Manufacturing | 19 | 18 | EMPLOYERS (a workers' comp specialist) |
| General contractors | 22 | 21 | EMPLOYERS (a workers' comp specialist) |
| Trucking | 7 | 6 | Travelers, CNA, The Hartford |
The gaps in the "list GL" column are mostly workers' comp specialists (EMPLOYERS, Pie) that don't sell GL at all, so they are not refusals. Trucking stands out: three of the seven carriers we could check on their own pages rate it limited. If your business sits in a class like that, expect fewer quotes and more underwriting questions. Our research on observed appetite explains how we collect and check this data.
How to get a general liability quote
Have these ready: what your business does in one or two sentences, annual revenue and payroll, number of employees, years in business, claims in the last three to five years, the limits your lease or contracts require, and whether anyone needs to be an additional insured. Our checklist of what you need for a business insurance quote covers the full list.
Then compare business insurance quotes. A licensed broker can return GL quotes from carriers that write your type of business, and if you have premises or equipment, ask for a BOP price at the same time.
Frequently Asked Questions
What is general liability insurance in simple terms? It pays when someone outside your business says you injured them, damaged their property, or harmed them through something you published or advertised, and it pays the lawyers who defend you. It does not cover your employees, your vehicles, professional mistakes or your own property.
Is general liability insurance required by law? Usually not by a general law. Leases, client contracts and some licensing rules require it. For example, Washington's contractor registration law, RCW 18.27.050, sets minimum liability amounts, and California requires LLC contractors to carry at least $1 million aggregate.
How much does general liability insurance cost per month? Insureon's small-business customers pay a median of $45 a month for general liability, and Progressive Commercial's new customers paid a median of $55 a month in 2025. Your own price depends mostly on your industry: Insureon's medians range from $32 a month for consultants to $317 a month for roofers.
What is the difference between general liability and professional liability? General liability covers bodily injury, property damage and advertising injury that your business causes. Professional liability (E&O) covers financial loss a client suffers because of a mistake or omission in your professional work, such as wrong advice or a missed deadline. Many service businesses carry both.
Does general liability cover my employees if they get hurt? No. Injuries to your own employees are excluded from GL. Workers' compensation covers them, and state rules decide when you must buy it.
Does general liability cover my business vehicle? No. GL excludes autos you own, hire or borrow. You need commercial auto for business vehicles, and hired and non-owned auto coverage for employees who drive their own cars for work.
Is $1 million in general liability enough? For most small businesses it meets what leases and contracts ask for, usually $1 million per occurrence and $2 million aggregate. Higher-risk trades and businesses with large contracts often add an umbrella policy for extra limits.
What is a certificate of insurance for general liability? A certificate of insurance (COI) is a one-page summary of your policy, limits and dates that you give to a landlord or client as proof of coverage. If they asked to be an additional insured, the certificate should show it, and your policy needs the matching endorsement.
