A General Liability Insurance Guide for Small Business

If you’re a contractor, you may have a tool you take to just about every jobsite. If you’re a baker, maybe you have a cupcake recipe that nevers fails to please. If you’re a DJ, you undoubtedly have a go-to song that gets everybody up and moving.

Whatever type of business you have, you likely have tools, techniques, and skills you rely on day after day. When it comes to financially protecting your livelihood, you can think of general liability insurance in much the same way.

So, let’s get to know more about general liability coverage and see how valuable it can be for your business.

What is General Liability Insurance for Small Business?

Simply put, general liability insurance is a way to cover costs from third-party accidents, property damage, and bodily injury. In most cases, when accidents happen as part of your business, you can be held financially responsible.

Let’s face it, accidents happen even to the best of us. And when it comes to business-related accidents, the costs can be hefty. Studies have shown that the average small business customer injury or damage claim is $30,000.

If you have general liability (GL) insurance, it can cover those costs, up to your policy’s limits. If you don’t, you could very well be on the hook for thousands of dollars.

Are you legally required to have general liability insurance for a small business?

General liability coverage is usually not required by law, but cities and states may have specific legal requirements. Those can include showing proof of GL coverage in order to obtain a contractor’s license or other professional certification you may need for your business. We have more helpful information about getting a contractors license here.

In addition, not having GL coverage can often be a nonstarter for many customers or companies you may want to work with.

What Does General Liability Insurance Cover for Small Business?

Here’s a quick breakdown of what general liability insurance for small business can cover:

• Bodily injury
• Third-party property damage
• Personal and advertising injury
• Claims arising from product defects
• Medical expenses
• And more

But that’s just a list. To get a better sense of how general liability insurance can help cover your small business, consider these examples:

Floored by claims.

Let’s say you have a business cleaning homes. You’ve just given a customer’s kitchen floor a lustrous new finish. Your customer comes in to grab a glass of water and before you can warn her to be careful, she slips, falls, and hurts her back.

What follows is a trip to the hospital, eight weeks of physical therapy, and the bills for all of it.

Without general liability coverage, there’s a good chance you and your business would be responsible for paying those bills out-of-pocket. And that could put your operation flat on its back, and possibly even you and your family.

Taco trouble.

Let’s meet Brandon, the owner of Brandon’s Burritos. In an online post, he mentions that Tammy's Taco Truck probably serves expired food to cut down on costs.

The news spreads, and Tammy’s Taco Truck begins to lose business. Tammy suspects that Brandon’s social post resulted in customers bypassing her Taco Truck.

Tammy knows her food is fresh and sues Brandon for the libelous comments he made about her food. For Brandon, that could mean paying a libel claim, along with the legal fees to defend himself in court.

With general liability insurance, those costs could be covered up to Brandon’s policy's limit.

How Much is Liability Insurance for a Small Business?

While the idea of an accident claim or lawsuit may be overwhelming to think about, the cost of general liability coverage doesn’t have to be.

We know this because insuring small businesses is our business. We know that no two businesses are the same, so we’ve customized coverage for each of our customers.

Just spend a few minutes online or call one of our licensed agents. We’ll take it from there and get to work finding quotes from the nation’s leading insurers. All you need to do is pick the one that’s best for your business.

In fact, we can find general liability policies for as low as $19.58/mo.*

General Liability and Workers Comp Insurance for Small Business

Along with general liability insurance, business owners often wonder about other types of coverage, such as workers compensation insurance. While general liability insurance protects your business, workers comp is designed to financially protect your employees (and in some cases, you) if they get injured or become ill while on the job.

You can find out more about workers comp insurance here. Or talk with one of our helpful insurance pros at 844-654-7272, Monday-Friday, 8am - 8 pm (ET).

Whenever You Need a Guide, We’re Here.

Just about every big business started as a small one (including us). We understand you want to protect your business, but you also want it to grow and thrive. That’s why we offer guides like this one and many others in our small business resource center, Simply U.

We want to be here to help you build your business, as well as protect it.

*Monthly payment calculations (i) do not include initial premium down payment and (ii) may vary by state, insurance provider, and nature of your business. Averages based on January - March 2023 data of 10% of our total policies sold.