FAQ’s About General Liability for Business

Below you will find the most popular questions we received from users. 

Q: How much is general liability insurance for a small business?

A: General liability insurance premiums vary depending on the specifics of your business but can be as low as around $350 per year. The average costs range from $750 to $2,000 annually. Even the top end prices are significantly less than the severe costs you’ll face if someone files a lawsuit against you. Exact costs will depend on factors such as your business type (with some industries more prone to risks than others), business size, perceived risk including your claims history, and which state you are located in. Your insurance carrier will gather the necessary information from you before calculating your premium.

Q: What does general liability insurance cover?

A: General liability insurance covers you against ‘third-party lawsuits’ brought against you by anyone who is not an employee. Coverage includes injuries and accidents occurring on your premises, property damage (including damage to equipment or cyber property) and non-physical personal injury such as reputation damage. It will also cover legal and medical costs associated with the claim. Coverage extends to others associated with your business (such as employees, partners or volunteers) while working or representing your business, regardless of location. However, it does not cover intentional damage or claims arising from negligence.

Q: what is commercial general liability insurance?

A: Commercial General Liability (also known as just ‘General Liability Insurance’, ‘Commercial Liability Insurance’ or ‘Business Liability Insurance’) is an essential form of insurance if you are a small business owner, entrepreneur or contractor. It is a broad type of liability insurance for businesses to protect them against common risks that can occur. This insurance will cover you against things such as bodily injuries and property damage to ‘third parties’ (anyone who is not an employee e.g. a business partner or a customer).

Q: how to get general liability insurance?

A: It’s easy to get general liability cover for your business by providing a few simple details about your business, such as location, nature of business and contact details. You can go visit an insurance company or directly get a quote within minutes with a few clicks of a mouse. A consultant will normally then get in touch with you to discuss the details of your quote.Q: what is general liability insurance for contractors?

A: General Liability Insurance for independent contractors is very much the same as for standard businesses. If you are an independent contractor, it is likely you will be working with customers or clients and this carries the same risks concerning bodily injury and property damage regardless of the field you are working in (from IT to construction). This insurance will also cover you against delays in completing work due to issues such as inclement weather. General Liability Insurance is an important consideration for contractors and many businesses now ask for a Certificate of Insurance before they subcontract work out.

Q: what is comprehensive general liability insurance?

A: Comprehensive General Liability Insurance is another term used for General Liability Insurance, albeit one that’s not used quite as frequently nowadays. If you see the term Comprehensive General Liability Insurance, don’t be fooled into thinking this is something distinct from normal General Liability Insurance. It’s also important to remember that no insurance policy is fully ‘comprehensive’ as all policies have limits and exclusions to what they will cover. Your insurance carrier will explain to you what these limits and exclusions are.

Q: is general liability insurance required by law?

A: Liability insurance of some kind is mandatory for most types of business. General Liability Insurance is the most common form opted for by most businesses as it covers against the key risks. You will need this insurance if you have clients or customers at your workspace, if you use third-party locations for business purposes or if you handle a client’s equipment. If you are working on a contract, a Certificate of Insurance may be required. Some businesses choose to combine General Liability Insurance with Commercial Property Insurance in a Business Owners Policy.

Q: what does general liability insurance cover for contractors?

A: General Liability Insurance coverage is similar for contractors to what it is for standard businesses. It will cover you against bodily injury (accidents to others) and property damage that occur at your workplace or are brought about by your work activities. It will also cover against personal and advertising injury claims, financial loss suffered by a client due to work carried out, and any claims against you if you are unable to complete work by an agreed completion date (e.g. due to weather circumstances).

Q: how much general liability insurance do I need?

A: Your coverage needs will depend on a number of factors. Firstly, your type of business. Some industries are more prone to risks, so for example a building contractor will need more coverage than a web designer. Secondly, the size of your business. A busy restaurant in the city centre will need more coverage than a small rural cafe. Thirdly, your location is a factor as some states tend to award more in damages than others. Most small businesses opt for coverage limits of $1-2 million. If your business is in a low risk category, it might be worth considering the Business Owners Policy.

Q: how much is a million dollar general liability insurance?

A: Your exact insurance premiums will depend on those factors of size and type of your business, location of your business as well as your insurance history. But the typical cost of insuring your business with a limit of one million dollars pay-out is around $1,000 to $3,000 annually. You can choose to lower this limit, which you may want to do if your business is very small or low-risk. Or you may wish to increase this limit or purchase excess or umbrella insurance if you feel that a $1 million is not sufficient to cover your risks.