General liability insurance runs about $42 monthly for most small businesses, though that number means almost nothing without context. A yoga instructor might pay $12 per month while a pressure washing company could shell out $918—because apparently spraying buildings is way riskier than downward dogs. Location matters too, with high-litigation states jacking up premiums by 34%. The typical $1 million per-occurrence coverage averages $69 monthly. Rates keep climbing, but the increases have slowed lately. The variations get messier from there.
Design Highlights
- Small businesses pay a median of $42/month or average $104/month for general liability insurance coverage.
- Costs range from $15 to $1,073 monthly depending on industry risk, with high-risk businesses paying significantly more.
- Popular $1 million per-occurrence coverage with $2 million aggregate costs approximately $69/month or $824 annually.
- High-litigation states and dense urban locations increase premiums by up to 34% above standard rates.
- Premium increases slowed to 2.3% in early 2025, making rates more manageable for small businesses.
While most small business owners would rather spend their time actually running their businesses, general liability insurance is one of those unavoidable costs that refuses to be ignored. The numbers tell a straightforward story: small businesses pay a median of $42 per month or $500 annually for coverage. That’s the middle ground. The average cost across all small businesses jumps to $104 per month or $1,242 per year, which means plenty of business owners are paying considerably more than that median figure.
Small businesses pay a median of $42 monthly for general liability insurance, though the average reaches $104 as many pay significantly more.
The range is genuinely wild. Monthly premiums stretch from $15 to $1,073 depending on what kind of business you’re running and how much risk you’re bringing to the table. Progressive Commercial reports a median monthly cost of $60 for new customers in 2024, while The Hartford customers fork over approximately $68 per month or $810 annually. About 29% of small businesses manage to keep their premiums under $30 per month, with some low-risk operations snagging policies starting at $11 or $17 monthly through providers like Next and Thimble.
Industry matters. A lot. Pressure washing businesses pay a staggering $918 monthly because slip hazards and property damage risks make insurers nervous. Drone operators pay just $17 monthly since they typically work away from customers. HVAC contractors hit a median of $63 per month. Yoga teachers? A mere $12 monthly. Property managers land at $31 per month.
Construction businesses face some of the steepest costs, reaching up to $5,000 annually or $417 monthly. Accommodation and food services range from $1,000 to $3,000 yearly. Retail businesses fall between $700 and $1,500 annually, while professional and technical services typically see $700 to $1,300 per year. Restaurant and retail owners usually incur costs 2 to 4 times higher than home-based businesses.
Location impacts pricing too. Businesses in high-litigation states pay 34% more than standard rates. High-crime areas and increased foot traffic zones push premiums higher, though state-to-state variations remain relatively modest, ranging from $42 to $52 monthly.
Policy limits drive costs up predictably. The most popular choice—$1 million per-occurrence with $2 million aggregate—attracts 91% of Insureon customers and averages $69 monthly or $824 annually. Higher coverage limits generally result in higher premiums. Many businesses also add commercial umbrella insurance to supplement their primary liability coverage when facing catastrophic claims that exceed standard policy limits.
The recent news is moderately encouraging. Rate increases cooled in 2024, with most policyholders seeing hikes in the 4% to 5% range rather than the double-digit increases of previous years. General liability rates increased just 2.3% in the first quarter of 2025.
Still, increased litigation and rising verdicts keep claim costs elevated.
Frequently Asked Questions
What Does General Liability Insurance Actually Cover?
General liability insurance covers three main things:
- Bodily injury when customers get hurt on business property.
- Property damage the business causes to other people’s stuff.
- Personal/advertising injury like slander or copyright infringement.
It also handles product liability if something sold causes harm. Defense costs are included.
But here’s the catch—it doesn’t cover employee injuries, the business’s own property, auto accidents, cyber risks, or professional screw-ups. Those need separate policies.
Is General Liability Insurance Required by Law?
No, general liability insurance isn’t required by federal law for most businesses.
But here’s the catch: some states, industries, and local jurisdictions do mandate it. Construction and contracting often face legal requirements.
Even when it’s not legally required, businesses might need it anyway—clients, landlords, and contractors routinely demand proof of coverage before signing contracts.
How Do I Purchase General Liability Insurance?
Purchasing general liability insurance is pretty straightforward.
Business owners can buy directly from insurance companies like Progressive, work with independent insurance agents who compare multiple carriers, or use online marketplaces. The process typically involves providing business details—industry type, revenue, employee count, location.
Insurers then quote premiums based on risk factors. Most policies can be purchased online within minutes, though high-risk businesses might need more detailed underwriting.
Shop around. Prices vary wildly between carriers.
Can I Cancel My General Liability Insurance Policy?
Yes, policyholders can cancel general liability insurance anytime. Most insurers want written notice, usually 30 days ahead.
Read the cancellation clause first—some require a signed request. Canceling typically means getting back unearned premiums, prorated.
But here’s the catch: cancellation creates coverage gaps, leaving businesses exposed to liability. Contracts like leases might require continuous coverage.
Skip proper procedures? Expect delays or penalties. Some policies charge early termination fees. Reinstatement might be possible within 30 days if needed.
Does General Liability Insurance Cover Employee Injuries?
No, general liability insurance doesn’t cover employee injuries.
That’s what workers’ compensation is for. General liability protects businesses from third-party claims—customers, vendors, random people who aren’t on the payroll.
Employee injuries are explicitly excluded from these policies, period. Workers’ comp handles medical expenses, lost wages, and disability benefits for injured employees. It’s legally required in most states.
There’s a separate coverage called employer’s liability insurance for specific situations where workers’ comp falls short, but standard general liability? Not touching employee injuries.
