Can I get general liability insurance without a business license?

Depending on where you're located and the type of work you do, you may need to obtain a business license before you can take on any clients.

Even if licensing is not mandated by your state, it's important to check county and city jurisdictions, as a general business license is often required by your local government. Also, to obtain certain professional licenses, you might be required to carry different types of insurance or bonds.

Most construction professions are required to be licensed, such as general contractors, electricians, plumbers, architects, and engineers. However, each state has different requirements depending on the services you provide and experience you have.

Certain professional service providers such as real estate agents and lawyers, require a state-issued professional license. In these cases, the state or licensing board may require you to carry professional liability insurance before the license is issued. This policy is also referred to as errors and omissions (E&O) or malpractice insurance depending on the industry.

In some areas, you might not need a business license if you're doing business as yourself, in your own name. And while most state laws don't require independent contractors or gig workers to have a business license, it's best to check with your local government to make sure.

To get a business license, there are several steps to take before submitting your application to your local or state government. Start by checking the websites of your city or county's clerk's office and your state's department of revenue for licensing requirements information. Other key steps include:

• Choosing your business name and structure
• Obtaining an Employer Identification Number (EIN)
• Researching which licenses you need and their requirements
• Carrying any mandated insurance policies or bonds
• Paying the fees associated with your business licenses

Take a look at our more in-depth article on how to get a business license.

If you are a sole proprietor or independent contractor, most often you can purchase general liability insurance without a business license. Because you are the only person in your company, there is no legal requirement to have a license to obtain a liability insurance certificate.

If your sole proprietorship or limited liability company (LLC) operates without a storefront or employees, your state or city might not require a business license to purchase a general liability policy. However, if you do have employees or maintain a physical business location, a business license is a must.

For example, freelance photographers usually don't need a business license to operate, but are always able to purchase general liability insurance. Photographers probably should because equipment (lights, cords, cases, etc.) at an event can be a tripping hazard, leaving them liable for any resulting injuries. Some clients might even require liability insurance.

Additionally, businesses like cannabis dispensaries may need to carry a general liability insurance policy to get licensed. You'll need to research the insurance requirements in your state to find out how much general liability coverage your business will need.

Likewise, even some self-employed individuals like general contractors may need a general liability policy to get licensed, depending on the state they work in.

Even though state laws don't typically require you to carry general liability insurance, not having this protection could put your business at serious risk for financial loss.

Judgments, settlements, legal defense fees, and court costs can be extremely expensive – no matter how frivolous the lawsuit or claim.

If someone files a claim against your business, you may end up spending several thousand dollars out of pocket even if the lawsuit is dropped.

You may also find that some businesses or local governments will only enter a contract if you maintain a minimum amount of business liability insurance. They want to make sure your business can handle a liability claim, as well as complete the agreed upon work.

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 the following types of business insurance:

Business owner's policy: A BOP bundles general liability coverage and commercial property insurance at a discount. It protects against the most common lawsuits and property damage.

Workers’ compensation insurance: Workers’ comp covers medical bills for work-related 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.

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

Cyber insurance: Also called cyber liability insurance and 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.

Complete Insureon’s easy online application today to get free quotes for general liability insurance coverage from top-rated U.S. insurance companies. You can also speak with an insurance agent about the types of coverage your business needs, and ways you can save on your general liability policy.

Once you find the right coverage for your insurance needs, you can usually begin coverage and get your certificate of insurance in less than 24 hours.