How Much Does General Liability Insurance Cost?

Every business takes on risk. And every smart business owner knows it’s not a matter of if something goes wrong, but when. Whether you’re a consultant working from a home office or a contractor managing crews on job sites, general liability insurance is what stands between your business and the financial fallout of an accident or lawsuit.

But what does it cost to get that protection? There’s no menu with fixed prices. Insurance doesn’t come with a barcode — it’s priced more like a custom suit than a pack of gum.

Your cost depends on the unique contours of your business. Your premium depends on who you are, what you do, where you do it, and how much risk you bring to the table. In the sections that follow, we’ll explore the real general liability insurance cost — from industry averages to what drives rates up or down — and help you understand what kind of coverage makes sense for your business.

What Is General Liability Insurance? (And What It’s Not)

Imagine a customer trips on a loose floorboard and breaks their arm. Or your team accidentally knocks over a ladder and damages a client’s storefront. Maybe you post an ad that unintentionally misuses a competitor’s slogan.

These aren’t extreme examples — they’re everyday risks. And general liability insurance is built to handle them.

At its core, general liability insurance covers claims of:

• Bodily injury
• Property damage
• Personal and advertising injury

It protects your business if someone trips on your floor, your work damages a client’s property, or you’re sued over something you said in an ad. It’s foundational coverage for nearly every business.

But it doesn’t cover everything.

It won’t pay for:

• Damage to your own property
• Employee injuries
• Auto accidents involving your work vehicle
• Professional mistakes or negligence

Those risks are covered under other policies — property insurance, workers’ comp, commercial auto, or professional liability.

How Much Does General Liability Insurance Cost?

Let’s talk numbers. If you’ve ever Googled ‘general liability insurance cost’ and ended up more confused than informed, you’re not alone. Pricing isn’t displayed like the price tag on a new iPhone — clear, fixed, and the same whether you’re in Seattle or San Antonio. It’s closer to getting a quote for custom software: it depends on your specs, your scale, and how complex your business is.

But we can start with the averages. Based on national data from top insurers, here’s what small business owners typically pay:

• $30–$70/month
• $400–$1,000/year

These numbers aren’t wrong — but they rarely apply to established, growing businesses.

They’re based on quotes for freelancers, part-time consultants, and one-person shops with little to no foot traffic. If that’s not you, these figures won’t reflect your reality.

Most of the businesses we insure — medical practices, tech startups, retail storefronts, restaurants — pay more, and for good reason. Their exposure is real. Their risks are higher. And their policies are designed to actually respond when something goes wrong.

Here’s what more typical costs look like:

What Affects the Cost of Your General Liability Policy?

No two businesses are exactly alike — and insurance companies know it. That’s why general liability premiums aren’t fixed or formulaic. They’re built around the shape, size, and risk of your specific operation.

Here are the major factors that influence your rate:

• Industry Risk
  Some jobs carry more inherent danger. A yoga studio and a restaurant don’t live in the same risk category — and they won’t see the same premiums. The more risk your industry represents, the higher the cost.
• Business Size & Revenue
  The busier your business, the more exposure you create. If you have high sales, more foot traffic, or a growing staff, insurers see more potential for claims — and adjust pricing accordingly.
• Location
  Geography matters. Urban settings, high-traffic locations, and states known for frequent lawsuits (like California or New York) tend to push premiums higher.
• Claims History
  A spotless record works in your favor. If you’ve had prior claims or lawsuits, insurers may see your business as a bigger risk. That history is factored into the cost.
• Coverage Limits & Add-Ons
  Most small businesses go with a standard $1 million per occurrence / $2 million aggregate policy. But if your contracts require more, or you want extra protection like product liability or liquor coverage, your premium will reflect that added exposure.

How Location Affects Price

Your zip code can play a big role in premium. States with high legal costs or frequent claims will push rates up.

• Higher-cost states: California, Florida, New York
• Lower-cost states: Texas, Indiana, Utah

Urban vs. rural also matters. A boutique in downtown San Francisco won’t pay the same as one in rural Idaho.

How Much Coverage Do You Need?

Most small businesses start with the standard $1 million per occurrence and $2 million aggregate limits — commonly written as $1M/$2M. It’s a practical choice that satisfies landlord requirements, client contracts, and everyday liability concerns.

But how much general liability insurance do you need? That depends on what’s at stake.

If your business:

• Signs high-value contracts
• Hosts public events or works in high-traffic areas
• Operates in industries with elevated risk (like food service or medical)
• Works with government or enterprise-level clients

…then you may need to consider higher limits. The cost increase is typically modest compared to the added protection.

Here’s a quick breakdown:

• $1M/$2M – Standard for small businesses, often contract-compliant
• $2M/$4M – Common for businesses with larger contracts or moderate risk
• $5M+ – Typically supported by an umbrella policy for businesses with significant exposure

Coverage isn’t just a checkbox. It’s how you make sure one bad accident doesn’t wipe out everything you’ve built.

Optional Coverages That Can Increase Your Premium

Your general liability policy is designed to cover specific risks — slips, trips, broken windows, damaged inventory. But no policy does everything. That’s not a flaw — it’s by design.

Certain industries face risks that stretch beyond what general liability is built to handle. A bakery serving wine at private events. A startup collecting customer data. A retail shop dealing with product recalls. In cases like these, general liability alone might not be enough.

That’s where additional coverage comes in — tailored add-ons that expand your coverage to match your actual exposure.

They strengthen your policy, but they also raise your premium:

• Product liability – if you manufacture or sell goods
• Liquor liability – if you serve or sell alcohol
• Cyber liability – for businesses that handle customer data
• Employment practices liability – for potential HR-related lawsuits

Real-World Pricing Scenarios

If you’re still wondering where your general liability insurance cost might fall, here are a few realistic examples based on the kinds of businesses we work with every day.

A Restaurant with Seating and Staff

A neighborhood bistro with a dining area, full kitchen, and 10 employees may pay $1,500–$2,000/year for general liability, depending on location and claims history.

A Professional Office with Client Visitors

An accounting firm with a few staff and moderate client traffic might pay $900–$1,200/year for basic protection.

A Tech Startup Handling User Data

A software company with remote staff, limited physical exposure, and added cyber liability coverage could pay $1,200–$1,600/year.

Ways to Lower Your General Liability Insurance Cost

Cutting your premium doesn’t mean cutting corners. If you’re looking to control the cost of your general liability insurance without weakening your coverage, here’s where to start:

• Bundle policies. Combine general liability and property into a Business Owners Policy (BOP) for savings.
• Keep a clean record. No claims? No problem. Insurers reward low-risk businesses.
• Focus on safety. Implement procedures that reduce accidents and document your risk management.
• Work with an independent agent. We shop multiple carriers to find you the right coverage at the best price.

The Real Cost of Going Without

You might be tempted to skip general liability coverage — especially if you haven’t needed it yet. It’s easy to underestimate the risk when nothing has ever gone wrong.

But here’s the reality:

• A single slip-and-fall claim can cost $20,000+
• A property damage lawsuit could easily hit six figures
• Legal defense costs alone average $3,000–$5,000, even if you win

The cost of coverage? Often less than your monthly cell phone bill.

General liability insurance isn’t just a line item. It’s a business essential. Understanding your general liability insurance cost helps you budget — but understanding the risk makes sure you’re protected.