General Liability Insurance: What It Is, Best Options for Small Businesses

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 of all sizes, from sole proprietors to corporations, typically need commercial general liability insurance coverage. All major commercial insurance companies sell business liability insurance, 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.

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 than expected given its market share, according to NerdWallet's analysis. 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.

Thimble

Best for: Liability 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.

Nationwide

Best for: Industry-specific business insurance.

Nationwide earned top marks for customer satisfaction in J.D. Power’s 2023 Small Commercial Insurance Study.^[0]

The Hartford

Best for: Working with a business insurance agent.

Business insurance agents get to know your company and can shop around for the coverage you need. If you’d rather work with a professional than buy insurance on your own, start by getting a quote from The Hartford. You can get a quote for general liability insurance and other types of coverage online, then connect with a business insurance agent near you. Read NerdWallet’s review of The Hartford business insurance.

Hiscox

Best for: Businesses that need professional liability insurance, too.

Hiscox offers general liability insurance, like all business insurance companies. But if you give advice to clients for a fee, you should have professional liability insurance, too. Hiscox’s policies cover work done anywhere in the world. You can get a quote for and buy both types of liability insurance online. Read NerdWallet’s review of Hiscox business insurance.

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.

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.

» MORE: Does your business need insurance?

When to consider a business owner’s policy

General liability insurance is often packaged with business property insurance and business income insurance in a business owner’s policy. You may need those other types of coverage if:

• 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 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 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.

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.

» MORE: General liability insurance vs. professional liability insurance

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.

» MORE: General liability insurance vs. workers’ compensation insurance