How Much Is General Liability Insurance? Small Business Costs Explained

Short answer: many small, low-risk businesses pay roughly $40 to $50 a month for general liability insurance, or about $500 to $600 a year, for a standard $1 million policy. Online marketplace Insureon reports an average of about $45 a month across its small business customers. Higher-risk businesses such as contractors, restaurants and healthcare agencies pay considerably more, and annual premiums range from about $250 to well over $3,000 depending on what you do.

Below is what drives the price, why your quote may look different from the averages, and how to keep the cost reasonable.

Key takeaways

• A common starting point is $1 million per occurrence and $2 million aggregate.
• Your industry is the biggest price factor, followed by size, location, limits and claims history.
• Licensing and contract requirements can force higher limits, which raise cost.
• Bundling general liability with property in a business owner's policy (BOP) often saves money.
• Comparing several carriers matters, because appetite and pricing vary widely by industry.

What general liability insurance costs

Averages are a useful sanity check, but they're weighted toward very small, low-risk businesses. Insureon reports that its customers pay an average of about $45 a month, roughly $538 a year, with policies ranging from around $250 to over $3,000 a year. Its typical customer has only a handful of employees, so a larger or riskier operation should expect more.

As a rough guide:

• Office-based professional services (consultants, accountants, agencies) tend to sit at the low end because clients rarely visit and property damage risk is small.
• Retail and personal services fall in the middle, since customers are on site.
• Contractors, restaurants and healthcare providers sit at the high end because injuries and property damage are more likely and more expensive.

What drives your general liability premium

1. Industry and operations. Insurers price by the risk of your work. A caregiver working in a client's home is a different exposure than a bookkeeper working at a desk.
2. Size. Revenue, payroll or square footage is usually the rating base, so premium grows with the business.
3. Location. Claim costs and lawsuit frequency vary by state and county.
4. Limits. Higher per-occurrence and aggregate limits cost more.
5. Deductible. A higher deductible lowers the premium, if you can absorb it.
6. Claims history. Past claims signal future risk and raise the price.
7. Contract endorsements. Additional insured, waiver of subrogation and primary wording can add a small charge.

Why home care and healthcare agencies pay more

Agencies that send staff into clients' homes face higher liability exposure, and both states set licensing minimums. California home care organizations and Illinois home health, home nursing and home services agencies must carry liability coverage of at least $1 million per occurrence and $3 million aggregate. That higher aggregate, plus the nature of the work, puts these agencies well above the small business averages. Most buy general and professional liability together in a policy built for their industry. See our home health and home care agency insurance page for details.

General liability versus a business owner's policy

A business owner's policy (BOP) packages general liability with commercial property coverage, often for less than buying them separately. Insureon reports its BOP customers pay an average of about $83 a month. If you own equipment, inventory or lease space, a BOP is worth comparing. Not every industry qualifies; many healthcare and contracting businesses need standalone policies.

California and Illinois notes

• Neither state requires general liability for most businesses, but leases, client contracts and some licenses do.
• Licensed home care organizations in California and home services agencies in Illinois need at least $1 million per occurrence and $3 million aggregate.
• General liability doesn't cover employee injuries. Those require workers' comp, which both states mandate from your first employee.

See our California general liability and Illinois general liability pages for state details, and our comparison of professional liability vs. general liability if you provide advice or professional services.

How to lower your general liability cost

• Describe your operations accurately so you're rated in the right class, not a riskier one.
• Bundle general liability with property in a BOP, or with professional liability where it's offered.
• Choose a sensible deductible.
• Carry the limits you need, matched to your contracts and licenses, rather than guessing high.
• Reduce claims with clear safety practices, written client agreements and good records.
• Compare carriers through an independent agent, since appetite varies widely by industry.

Get a general liability quote

Our online estimator prices liability coverage for many industries, including $1 million / $3 million limits for healthcare agencies, and a licensed agent finalizes the policy and certificates.

Get your instant liability estimate or call us at 847-767-4504.

Frequently asked questions

How much is general liability insurance per month?

Many small, low-risk businesses pay around $40 to $50 a month. Insureon reports an average of about $45 a month. Higher-risk industries pay more, sometimes several hundred dollars a month.

Is $1 million in general liability enough?

For many small businesses, $1 million per occurrence with a $2 million aggregate meets lease and contract requirements. Licensed home care agencies in California and Illinois need at least a $3 million aggregate, and some contracts ask for more.

Does general liability cover my employees if they get hurt?

No. Employee injuries are covered by workers' compensation. General liability covers injuries to customers and other third parties, and damage to their property.

Why is my quote higher than the average?

Averages are weighted toward very small, low-risk businesses. Your industry, size, location, limits and claims history all affect price. Healthcare and contracting businesses typically pay well above average.

This article is general information. Premiums depend on underwriting and your business details. Cost figures cited are from Insureon's published small business data. Bliss Marc International Corporation is a licensed insurance agency, California License #0H92044 and Illinois License #100299879.