What Does it Mean to Have $1 Million in Liability Insurance?

A $1 million insurance policy generally means that your insurance will take care of any covered costs up to that amount that occur when that policy is in effect (usually a year).

Policies typically use two terms to better define their coverage:

$1 million per-occurrence limit. With a $1 million per-occurrence limit, your insurance policy will cover up to $1 million for a single incident that occurs while the policy is active.

$2 million aggregate limit. This means that over the course of a year-long policy, your insurer will pay a maximum of $2 million to cover multiple incidents.

Note that occurrence and aggregate limits may vary and are not always the amounts above.

What Does a $1 Million General Liability Policy Cover?

General liability can help cover a variety of claims, such as these:

Third-party
property damage

General liability policies can help cover expenses if you accidentally break, damage, or destroy a client’s personal property.

Third-party injuries

If a customer is injured at your office or work site, a general liability insurance policy can help cover their medical expenses.

Advertising injury

A GL policy can help cover claims and legal expenses if you’re sued because of your business’s advertising, marketing, or social activities.

Faulty products

If you sell a faulty product that causes bodily harm or damage to a customer’s property, a general liability can help cover claims and legal costs.

What Determines the Cost of General Liability Insurance?

The size of your physical location

If you have a large space, especially one that is open to the public, there’s more potential for accidents or damage. This can sometimes lead to a slightly higher insurance cost.

Your type of business

Some businesses, such as construction, have a higher risk of accidents than others, like an office-based business. Insurers consider this risk when determining your premium. The higher the risk, usually the higher the cost.

How much your business earns

Typically, the more revenue your business makes, the higher the cost of your insurance might be. This isn’t always the case, though. It depends on your specific industry. Some industries see only a small increase with more sales, while others might see a bigger jump as a result of the increased activity.

Where your business is located

Location matters. Local laws and the general environment of your area can affect your insurance costs. For example, businesses in high foot traffic or high-crime areas might requireneed more coverage.

Any claims you’ve had before

If you have a history of claims, some insurance companies might see your business as higher risk, which could affect your insurance cost. A clean claims history can lead to lower premiums.

How to Get a $1 Million General Liability Insurance Policy for Your Business

We’re small business insurance experts. We can make getting the coverage you need fast, easy, and understandable. We provide customized coverage options and quotes from top-rated small business insurers – all in just 10 minutes. More than 1 million small business owners worldwide trust us with their insurance, and we consistently earn high customer ratings and reviews.

We also have a team of licensed agents available on the phone to help you evaluate coverages and answer questions about your quotes. You can speak with them Monday-Friday, 8 a.m. to 6 p.m. ET.