Most states don't require general liability insurance, but contractors and daycare providers need it for licensing.
Find cheap rates for general liability insurance below.
Updated: September 10, 2025
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General liability insurance requirements vary by state, but you'll need it if you're a contractor or daycare provider in certain states.
Your small business needs additional coverage beyond general liability insurance, such as professional liability, commercial property or cyber insurance.
You can get general liability insurance by gathering quotes online, choosing a provider and activating your coverage.
Most states don't legally require businesses to carry general liability insurance, but some professions need it for licensing.
Contractors need general liability insurance to get licensed in Washington State, New York City, Washington D.C. and Georgia. Daycare providers must also carry coverage in Washington and Texas, with Texas requiring at least $300,000 per child in your care. These requirements change regularly, so double-check with your state licensing board before applying for coverage.
Select your industry and state to get a customized quote.
Even without legal requirements, you'll need general liability insurance in many business situations:
Most landlords won't lease to you without general liability coverage. They want financial protection if a customer gets injured on the property or your business causes damage. Coverage requirements vary, but often start at $1 million per occurrence.
Many businesses won't hire contractors, consultants or service providers without proof of insurance. It protects them from liability if your work causes property damage or if someone gets hurt.
Restaurants face slip-and-fall risks when customers spill drinks or trip over chairs. Retail shops risk customers getting hurt by falling merchandise. Even coffee shops need coverage if someone burns themselves on hot coffee.
Cleaning services might accidentally damage expensive artwork. Landscapers could break sprinkler systems. Home repair contractors risk damaging flooring or walls. If you work on other people's property, costly damage claims can quickly add up.
Without coverage, one lawsuit could cost you tens of thousands in legal fees alone, plus damages that could shut down your business.
These guides help you choose the best coverage for your small business:
Many small business owners assume general liability insurance covers everything, but it leaves many gaps. General liability covers customer injuries and property damage, but it won't protect you from professional mistakes, cyber attacks or damage to your own equipment. Most small businesses need additional policies to address these risks.
General liability insurance is important, but most business owners need additional financial protection. Different industries face unique challenges that general liability alone can't handle. Understanding your industry's risks helps you choose the right types of coverage for your business.
Construction/Contractors | Commercial auto, workers' compensation, tools and equipment | Construction sites present high injury risks, and many states require GL coverage for contractor licensing. Vehicle coverage protects against job site transportation accidents, while tools coverage protects expensive equipment. |
Restaurants/Food Service | Commercial property, workers' compensation, business interruption | High customer traffic increases slip-and-fall risks, while kitchen equipment needs property protection. Business interruption covers lost income if health violations or equipment failures force closure. |
Commercial property, product liability, business interruption | Falling merchandise can injure customers, and wet floors create slip-and-fall risks. Inventory protection and coverage for defective products, plus income protection during forced closures, are essential. | |
Professional Services | Professional liability, cyber liability, commercial property | Office visits expose premises liability, while professional errors can result in costly malpractice claims. Data protection is increasingly important, and office equipment needs property coverage. |
Home Services | Commercial auto, tools and equipment | Working in customers' homes increases property damage risks. Vehicle coverage and protection for tools and equipment are necessary for mobile service businesses. |
Health Care Providers | Professional liability, cyber liability, commercial property | Patient interactions create premises liability, while medical errors require malpractice coverage. Patient data protection is legally required, and medical equipment needs property protection. |
Technology/IT Services | Professional liability, cyber liability, tools and equipment | Client site visits create liability exposure, while coding errors or system failures can cause significant financial losses. Data breach protection is critical, and computer equipment needs coverage. |
Commercial property, product liability, business interruption | Product defects can cause third-party injuries, while factory visitors face potential hazards. Equipment and inventory need property protection, plus income coverage during production shutdowns. | |
Professional liability, commercial auto | Property showings create liability exposure at various locations. Professional errors in transactions can result in significant financial claims, and vehicle coverage protects during property visits. | |
Commercial property, professional liability, tools and equipment | Chemical treatments and equipment create injury risks, while high customer traffic increases slip-and-fall exposure. Professional errors in treatments need coverage, and salon equipment requires protection. | |
The right combination of business insurance depends on your operations and the unique risks your industry faces.
Most business owners know they need GL coverage but aren't sure where to start. The application process is straightforward, and many insurers provide same-day quotes with quick approval for standard businesses.
Start by checking if your industry requires coverage and assessing your business risks. Consider your annual revenue, number of employees and whether customers visit your location. Most small businesses choose $1 million per occurrence with $2 million aggregate limits.
Insurance companies will ask for your business details, including your industry classification, annual revenue, number of employees, business address and years in operation. Have your business license and any required certifications handy.
Get quotes from at least three insurance providers through direct contact, independent agents or online comparison tools. Don't just compare prices. Look at what each policy covers and excludes. Check the insurance company's financial strength rating and customer service reputation.
Once you've chosen a provider, you can buy coverage online or over the phone. Most insurers can email you immediate proof of insurance, which you'll need for contracts, leases and licensing requirements.
Pay your premiums on time and update your insurer about business changes throughout the year. Before renewal, review whether you've added employees, increased revenue, expanded services, or moved locations. These changes may require higher coverage limits for your growing business.
General liability insurance requirements vary by state, but most businesses need coverage for practical reasons. Contractors and daycare providers face legal mandates in certain areas, while other businesses need it for leases and client contracts. Getting coverage is simple: compare quotes online, choose a provider and activate your policy to protect your business.
General liability insurance requirements can seem confusing, so we've answered the most frequently asked questions about coverage needs and costs:
Contractors must carry GL insurance for licensing in Washington State, New York City, Washington D.C. and Georgia. Contact your state licensing board to verify what you need; minimum limits may vary by area and contractor type.
Costs vary by industry, state and risk factors. Your annual revenue, number of employees and business type affect pricing. Getting quotes from multiple insurers helps you find competitive rates for your specific situation.
General liability covers customer injuries and property damage at your business location or from your operations. Professional liability covers financial losses from your professional mistakes, errors or failure to deliver promised services. Most businesses need both types of coverage.
No, general liability insurance doesn't cover damage to your equipment, inventory or business property. Instead, commercial property coverage protects these business assets from fire, theft, vandalism and weather damage.
Yes, most insurers offer general liability as part of a business owner's policy (BOP) that bundles multiple coverages. It often costs less than buying separate policies and simplifies insurance management with one policy and payment.
You'll pay out-of-pocket legal defense costs, medical expenses and potential settlement amounts. A single lawsuit could cost tens of thousands in legal fees alone, plus damages that could threaten your business's financial survival.
Simple claims like minor customer injuries might resolve in weeks, while complex property damage or lawsuit claims can take months. Your insurer will investigate the incident, determine coverage, negotiate settlements or provide legal defense as needed.
Yes, if clients visit your home office or you provide services at client locations. Your homeowners insurance typically excludes business activities. Even home-based businesses face liability risks from client injuries or property damage.
About Mark Fitzpatrick
Mark Fitzpatrick, a Licensed Property and Casualty Insurance Producer, is MoneyGeek's resident Personal Finance Expert. With over five years of experience analyzing the insurance market, he conducts original research and creates tailored content for all types of buyers. His insights have been featured in publications like CNBC, NBC News and Mashable.
Fitzpatrick holds a master’s degree in economics and international relations from Johns Hopkins University and a bachelor’s degree from Boston College. He's also a five-time Jeopardy champion!
Passionate about economics and insurance, he aims to promote transparency in financial topics and empower others to make confident money decisions.
