What is the average cost of general liability insurance?

The national average cost of general liability insurance for a small business is $742 per year, or about $62 per month. The range is wide: low-risk businesses such as consultants may pay as little as $400 per year, while higher-risk businesses such as contractors can pay $2,000 to $5,000 or more annually.

What does general liability insurance cover?

General liability insurance covers bodily injury (if a customer is injured due to your operations), property damage (if you accidentally damage someone else's property), and advertising injury (if you are accused of copyright infringement or defamation). It does not cover employee injuries, professional mistakes, or your own business property.

Is general liability insurance required by law?

General liability insurance is not federally required for most businesses, but many commercial leases, government contracts, and client contracts require it. Some states require specific industries such as contractors to carry GL insurance to obtain a business licence.

What is a per-occurrence limit and aggregate limit?

The per-occurrence limit is the maximum your insurer will pay for a single claim. The aggregate limit is the maximum they will pay across all claims in a policy year. The most common GL policy for small businesses is $1 million per occurrence with a $2 million aggregate.

How can I lower my GL insurance premium?

The most effective ways to reduce your GL insurance cost are: bundle it with other policies in a Business Owner's Policy (BOP) to save 10-20%; maintain a claims-free history; increase your deductible; implement documented safety procedures; and shop around with at least three insurers each year.

What is the difference between general liability and professional liability?

General liability covers physical risks such as slip-and-fall injuries or property damage. Professional liability (E&O insurance) covers financial harm from your professional advice or services, such as a client claiming your consulting advice caused them to lose money. Many professional businesses need both policies.

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How Much Does General Liability Insurance Cost?

Updated 26 March 2026

The national average for small business GL insurance is $742 per year ($62/month). Use our free estimator below to get a personalised estimate based on your industry, revenue, and business size.

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GL Insurance Cost Estimator

Get an instant estimate based on your industry, revenue, and business size

Industry

Annual Revenue

Your business gross annual revenue

Number of Employees

FTE

Full-time equivalent employees (include yourself)

Prior Claims History

Prior claims significantly affect your premium

Estimated Annual Premium

$600 – $1,400

per year

Monthly Cost

$50 – $117

Many insurers offer monthly billing

Recommended Limit

$1M / $2M

Per-occurrence / aggregate

Note: These are estimated ranges based on industry averages. Your actual premium depends on your specific location, business activities, insurer, coverage limits, and deductible. Get quotes from at least three licensed insurers to find the best rate for your business.

National Average Comparison

National avg (small biz)$742/year

Your estimate midpoint$1,000/year

What Affects GL Insurance Cost?

Industry and Business Type

The single biggest factor. Contractors and restaurants pay 3-5x more than consultants because their work involves physical contact with clients, properties, and the public. Insurers price risk based on historical claims data for each industry code.

Annual Revenue

Higher revenue means more work, more exposure, and larger potential claims. A business with $1M in revenue will typically pay 60-90% more than a comparable business with $100K in revenue. Revenue is one of the primary underwriting inputs.

Number of Employees

More employees mean more opportunities for incidents. Payroll is often used as a secondary exposure base alongside revenue. A 10-person business may pay 40-60% more than a solo operator in the same industry.

Claims History

A single prior claim can increase your renewal premium by 25-50%. Three or more claims may make you difficult to insure with standard carriers at all. Insurers typically look back 3-5 years when underwriting a new policy.

Coverage Limits

Moving from $1M/$2M to $2M/$4M coverage limits typically adds 15-30% to the premium. Most small businesses start at $1M per occurrence, but client contracts and commercial leases may require higher limits.

Location

Insurers price risk by state and sometimes by zip code. States with higher litigation rates and jury verdicts, such as California, New York, and Florida, typically result in higher premiums than lower-litigation states in the Midwest.

How Much Does General Liability Insurance Cost?

GL Insurance Cost Estimator

What Affects GL Insurance Cost?

Industry and Business Type

Annual Revenue

Number of Employees

Claims History

Coverage Limits

Location

Frequently Asked Questions