Who needs general liability insurance?

Generally not, but some states may require general liability for certain industries like construction and cannabis. Depending on your type of business, you may need this coverage to get a professional license in your state.

While commercial general liability insurance isn’t typically mandated by law, it still may be required by your landlord, mortgage company, business partners, or clients.

Typical reasons business owners secure a general liability policy are:

Professional licensure. Real estate agents, dentists, and accountants need a license to practice in the U.S. The requirements for a license could include general liability coverage.

Contracts. A company that hires a general contractor, engineer, or landscaper to complete part of a larger project may require you to obtain this policy.

Office leases. An architect, electrician, or another professional who rents an office or workspace may need to obtain general liability insurance coverage to fulfill the lease requirements.

Every small business, especially those that sell products or provide services to customers, can benefit from this essential type of business insurance. There are several industries that could use a general liability insurance policy, including:

Because general liability insurance provides such important coverage, most small business owners buy the policy right after they start their business.

This insurance policy can keep your company financially stable if you’re sued by a customer or competitor. It's especially important if you rent or own an office or commercial space.

Even if that doesn't apply to you, small businesses that work directly with clients and customers benefit from general liability insurance because one accident could otherwise financially devastate a small company.

Unless you're purchasing general liability coverage to fulfill contract or lease terms, you should aim for an amount of coverage that's both affordable and matches your business needs.

A high-traffic retail store will likely need more coverage than a small tax preparer's office or a home-based business.

You want to make sure your policy can pay for a lawsuit if you're sued. Take into consideration the size of your business, the number of people your employ, and your business operations to determine your exposures and risk of financial loss.

Most small businesses opt for the standard $1 million per-occurrence / $2 million aggregate policy limits.

This means the policy will pay up to $1 million to cover a single incident, with a $2 million aggregate limit, or maximum amount, for the lifetime of the policy, typically one year.

You can also extend how much your general liability policy covers with commercial umbrella insurance to cover more expensive lawsuits – which is good for businesses with high risks.

General liability insurance covers common business risks, though it does not protect against all of them. To be fully insured, small business owners should also consider:

Business owner's policy (BOP): A BOP bundles general liability coverage and commercial property insurance for less than it would cost to purchase each policy separately. It protects against the most common lawsuits and business property damage.

Workers’ compensation insurance: Workers’ comp covers medical costs for work-related employee injuries and illnesses. Most states require this coverage for businesses with one or more employees.

Professional liability insurance: This policy covers professional mistakes and oversights, such as missing a project deadline. It’s also known as errors and omissions insurance or E&O.

Commercial auto insurance: Auto insurance is required in most states for businesses that own vehicles. It covers legal defense costs, medical bills, and property damage if one of your business vehicles is involved in an accident.

Cyber insurance: Also called cyber liability insurance or cybersecurity insurance, this policy protects small businesses from the high costs of a data breach or malicious software attack. It covers expenses such as customer notification, credit monitoring, legal fees, and fines.

Get free quotes from industry-leading insurance carriers by filling out our easy online application with basic information about your business, such as revenue and number of employees. While many factors affect the cost of general liability insurance, with several outside your control, there are ways to find affordable general liability insurance.

You can consult with a licensed insurance agent at any point in the process. Once you pay for your policy, you can download a certificate of insurance (COI) to show clients and others that your business is protected.