Comprehensive general liability insurance for small business

General liability insurance is a kind of business insurance that helps protect a business financially if it harms or is accused of harming a person or their property.

Businesses typically need commercial general liability insurance coverage. All major business insurance companies sell it, either on its own or as part of a business owner’s policy.

Here are some of the best options for small-business owners to get general liability insurance, as well as how it works and additional details on coverage.

Best general liability insurance providers

All business insurance providers typically sell general liability insurance. The best providers let you get a quote and purchase a policy online so you can get the coverage you need fast. NerdWallet recommends getting quotes from several different providers so you can find the best coverage at the best price.

Chubb

Best for: Buying a business owner’s policy.

Chubb’s BOP is available online to businesses with less than $1 million in revenue. In addition to business interruption insurance, Chubb’s policy includes extra expense coverage, which could help buoy your business as you recover from an accident or disaster. Chubb also had fewer complaints about general liability insurance filed with state regulators, relative to its size, than any other insurance provider we've reviewed. Read NerdWallet’s review of Chubb small-business insurance.

Next Insurance

Best for: Buying general liability insurance online.

If you need general liability insurance quickly, you can get a quote and buy a policy online in minutes from Next. The company says its general liability insurance policies start at $11 per month, and product liability coverage is included. Read NerdWallet’s review of Next business insurance.

State Farm

Best for: Working with a local business insurance agent.

State Farm agents sell general liability insurance and BOPs as well as lots of other business insurance products. State Farm agents can only sell State Farm insurance policies, but they may be able to bundle several types of coverage to help you save money. Read NerdWallet’s review of State Farm business insurance.

Thimble

Best for: Buying coverage for a specific event or temporary period.

Thimble offers general liability insurance by the month or for individual events, making it a good option for businesses who want coverage mainly to comply with contractual requirements. The company says it sells policies starting at $17 per month. Read NerdWallet’s review of Thimble business insurance.

What's the best fit for your business?

Answer a few questions and we'll match you with an insurance partner who can help you secure quotes.

How general liability insurance works

Commercial general liability insurance policies can pay out in cases of:

• Third-party bodily injuries that occur on your property or as a result of an interaction with your business or employees. (This does not include injuries sustained by employees.)

• Third-party property damage, or damage to someone else’s property caused by your business or its employees.

• Personal and advertising injury. If your business says something publicly that prompts someone else to sue you for copyright infringement, libel or slander, general liability coverage can pay for your legal expenses and damages.

Specifically, general liability insurance covers your legal costs if someone accuses your business of causing these kinds of harm. It can also cover medical payments for injuries that happen on your property, regardless of whose fault the injury was or whether a legal claim is filed.

General liability insurance policies also typically include some product liability insurance coverage, which provides protection against claims that a product your business manufactured, delivered or sold caused harm to a person or property.

What businesses need general liability insurance

NerdWallet recommends that all businesses carry general liability insurance. It provides a baseline level of protection that can keep your business afloat if you’re sued.

General liability insurance is not required usually by law. But your landlord, client or contractor may insist on it before they’ll work with you. That’s because if you’re responsible for an accident or injury but don’t have insurance coverage of your own, your landlord or client’s insurance policy may have to cover the costs — driving up their future premiums.

In order for general liability insurance to cover you, you’ll need to have a policy in place at the time an accident happens. Some policies provide retroactive coverage even after you stop paying premiums, though.

When to consider a business owner’s policy

• You rent space or own a building.

• You’ve invested in inventory or costly equipment.

• A disaster or accident would force your business to close, cutting off revenue.

If you need business property and business income insurance, a BOP is a good choice that may help you save money.

General liability insurance costs

General liability insurance has a median premium of $42 per month, according to insurance marketplace Insureon.

But general liability insurance costs can vary widely depending on what your company does, where you’re located, how many employees you have and whether you have prior claims. For instance, Next says a yoga teacher pays a median monthly premium of $15, whereas general liability insurance for contractors comes with a monthly bill of $88.

General liability insurance policy limits

General liability insurance policies typically include two numbers: the per-occurrence limit and the aggregate limit. The higher your limits, the more expensive your premiums will typically be.

The per-occurrence limit is the maximum amount the insurance company will pay out for a single claim. A typical general liability policy includes a per-occurrence limit of $1 million, which includes both legal and settlement costs.

The aggregate limit is the total amount the insurer will pay out in a single year. A typical general liability policy includes an aggregate limit of $2 million. The aggregate limit refreshes every year if you have an occurrence-based policy.

Other business insurance coverage you might need

Businesses often need several types of business insurance. Typically, general liability insurance does not protect business owners in cases of:

Harm that results from inadequate performance. Instead you’ll need professional liability insurance, also called errors and omissions insurance. This coverage can protect a business that performs a service — think accountants, lawyers, doctors and architects — if they’re sued by a client who thinks they were negligent or made a mistake that resulted in harm.

Injuries your employees suffer on the job. The part of a general liability policy that covers bodily injury liability only applies to third parties, not to employees. Instead, workers’ compensation insurance pays for medical costs, physical therapy and lost wages while an employee recovers from a workplace injury.

Frequently asked questions

What is general liability insurance?

General liability insurance is coverage that protects your business if you or your employees are accused of injuring a third party, damaging their property or harming their reputation.

What does general liability insurance cover?

General liability insurance covers legal and settlement costs if a third party sues you for bodily injury, property damage, copyright infringement, libel or slander. It can also cover medical expenses for third parties injured on your property or in the course of operating your business.

How much does general liability insurance cost?

General liability insurance has a median cost of $42 per month, according to insurance marketplace Insureon. But coverage may be cheaper for low-risk businesses: Next’s policies start at $11 per month, and Thimble sells policies starting at $17 per month, according to those companies.

Does your business need general liability insurance?

In general, all businesses should have general liability insurance. It’s not typically required by law, but the business that hired you as a contractor, your clients or your landlord may insist that you carry it.

What type of insurance is best for a small business?

What is general liability for small business?

Is comprehensive and liability insurance the same thing?

How much is a million dollar general liability insurance?