General Liability Insurance for Small Businesses: The Basics (2025)
My friend Mike owns a small landscaping company. Three employees, a few trucks, typical small operation. Last summer one of his guys was trimming a tree and a branch fell on the client’s car. Windshield, hood, the whole front end. Probably $4,000 in damage.
Mike had general liability insurance. Claim got handled. He paid his deductible and the insurance covered the rest. Client wasn’t happy but wasn’t suing him either.
His buddy who runs a similar business? Didn’t have liability coverage because “it’s just landscaping, what could happen?” Same situation happened to him two months later. He paid $3,500 out of pocket and now he has insurance too.
General liability is the most basic business insurance. If you run any kind of business that interacts with the public or works on client property, you probably need it.
What general liability covers
Three main things:
Bodily injury. Someone gets hurt because of your business. Customer slips on wet floor in your store. Client trips over your equipment. Your product injures someone. Medical bills and lawsuits—general liability covers it.
Property damage. You damage someone else’s stuff. Mike’s branch-on-car situation. Electrician accidentally starts a fire. Delivery driver backs into a client’s fence. Your business causes damage to things that aren’t yours.
Personal and advertising injury. You get sued for defamation, slander, copyright infringement in your advertising. Accidentally use someone’s photo without permission. Competitor claims you stole their tagline. Weird stuff but it happens.
What it doesn’t cover
General liability has limits. Doesn’t cover:
Employee injuries—that’s workers’ compensation.
Professional mistakes—that’s professional liability insurance/E&O.
Auto accidents—that’s commercial auto.
Your own business property—that’s commercial property insurance insurance.
Intentional wrongdoing—nothing covers that.
Cyber incidents—that’s cyber liability.
General liability is one piece of the puzzle, not the whole picture.
How much coverage
Most policies are sold with limits like $1 million per occurrence and $2 million aggregate. Per occurrence means the most they’ll pay for a single incident. Aggregate means the most they’ll pay total during the policy period.
Is $1M/$2M enough? For most small businesses, yeah. If you’re bigger or higher risk you might need more. Some contracts require specific minimum amounts—many clients won’t work with you unless you have at least $1 million in liability coverage.
What it costs
Varies wildly based on your business type, size, location, claims history. But for reference:
Low-risk office-based business: maybe $400-800/year
Retail store: maybe $500-1,500/year
Contractor/landscaper: maybe $1,000-3,000/year
Restaurant: maybe $2,000-5,000/year
These are rough ranges. Get actual quotes for your specific situation.
Who needs it
Pretty much any business that:
Has a physical location customers visit
Works on client properties
Sells physical products
Could potentially cause injury or property damage to non-employees
Freelancers and consultants who work remotely from home with no physical products? Maybe can skip it. Maybe. Even then, meeting a client for coffee and they trip over your laptop bag… stranger things have happened.
Landlords often require it if you’re leasing commercial space. Clients often require it before signing contracts. Even if you think you don’t need it, someone you work with might require it.
Where to get it
Most business insurance companies offer general liability. Can buy standalone or as part of a Business Owner’s Policy (business owners policy) that bundles general liability with commercial property insurance—often cheaper than buying separately.
Online options exist for simple businesses—companies like Next, Hiscox, and others let you get quotes and buy online in minutes. More complex businesses might want to work with a broker who can shop around.
Mike’s situation now
He pays about $1,800/year for general liability. Has used it twice in three years. Branch incident and another situation where an employee damaged a client’s irrigation system. Without coverage those two incidents would have cost him $6,000+.
The math works. Not every business will have claims. But the ones that do are really glad they have coverage.
Comprehensive is doing that thing where she stares at me while I work which is either endearing or unsettling depending on my mood—but anyway. If you run a business that interacts with the world, general liability is basic protection. Not optional. Get it.
