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Updated: January 27, 2026

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What Is General Liability Insurance?

General liability insurance is a business policy designed to protect against legal and financial responsibility for harm to others that happens during normal operations. Rather than covering one specific event, it is built from several core protection parts that work together:

  • Bodily Injury and Property Damage Liability (Coverage A): It applies when your business is legally responsible for physical injury to a person or damage to someone else’s property.
  • Products-Completed Operations (Part of Coverage A): Applies to claims that arise after work is finished or after a product is sold, such as property damage caused by faulty installation or injury linked to a product you manufactured or distributed.
  • Personal and Advertising Injury Liability (Coverage B): Covers non-physical harm such as libel, slander, advertising-related copyright issues and some privacy or wrongful eviction claims.
  • Medical Payments (Coverage C): Provides limited, no-fault medical expense payments for minor injuries to non-employees.
  • Defense and Limits Structure: The policy includes a duty to defend covered lawsuits and is governed by per-occurrence and aggregate limits.

Below, you can explore specific parts of general liability coverage in more detail.

How General Liability Insurance Differs From Other Business Insurance

Although general liability insurance covers many common third-party risks, the term “general” can be misleading. Coverage boundaries matter, and similar-sounding policies often apply to completely different situations.

So below, we've provided short form explanations to help you distinguish general liability policies from other coverage options for your business.

Financial harm from professional mistakes, advice or services
General liability covers physical injury and property damage, not financial losses from service errors
Client financial loss due to negligence, missed deadlines or faulty work
E&O focuses on professional performance failures; general liability focuses on bodily injury and property damage
Third-party injury or property damage in public settings (term often used internationally)
Public liability is often another name for general liability or a subset of it, depending on region
Employee injuries, medical bills and lost wages
General liability applies to non-employees, not your workforce
Combines property insurance and liability coverage in one package
A BOP includes general liability plus property protection; general liability alone doesn’t cover owned assets
General Liability vs. Builders Risk
Property damage to structures under construction
Builders risk covers the project itself; liability insurance covers harm to third parties
General Liability vs. Commercial Umbrella
Additional liability limits above underlying policies
Umbrella insurance extends limits; it doesn’t replace base liability coverage
General Liability vs. Personal Liability
Liability protection for individuals, typically under homeowners or umbrella policies
Personal liability covers non-business activities; general liability applies to business operations
General Liability vs. Premises Liability
Injuries that occur on a property due to unsafe conditions
Premises liability is typically included within general liability rather than a separate policy
General Liability vs. Product Liability
Injury or damage caused by products after sale
Product liability is often included under general liability but may require higher limits for product-heavy businesses
General Liability vs. Garage Liability
Auto-related liability for businesses like dealerships or repair shops
Garage liability includes vehicle exposure that standard liability policies exclude

Who Needs General Liability Insurance?

Most businesses that interact with people, property or the public have liability exposure as part of normal operations need general liability insurance. It’s also often required, not just recommended. Landlords, clients, lenders and partners frequently require proof of general liability coverage before contracts are signed or work begins.

Your business likely needs general liability insurance if you:

  • Meet customers, clients or vendors in person
  • Work at client locations or job sites
  • Rent or lease commercial space
  • Perform installation, repair or physical work
  • Manufacture, sell or distribute products
  • Have visitors at your workplace
  • Advertise publicly or online

To find our if general liability insurance applies to your business, we've left resources below to get you started:

How Much Does General Liability Insurance Cost?

The cost of general liability insurance on average is around $123 per month on average for most small businesses. Though this is only a typical premium, and actual prices for your company vary based on risk and coverage choices.

Cost is primarily influenced by the following items.

How to Choose the Right General Liability Coverage Limits

Once you know this coverage applies to your business and have a sense of typical costs, the next step is choosing general liability insurance limits that match your exposure. Limits determine the maximum amount your insurer will pay for covered claims, so it is important that they can pay out in a worst-case scenario.

Below we've detailed a simple step-by-step process for determining how much general liability insurance you need.

  1. 1

    Start with any requirements you must meet

    Pull the minimum general liability insurance limits you need from:

    • Client contracts and vendor agreements
    • Commercial leases
    • Project bid requirements

    If a requirement exists, treat it as your floor, not your final answer.

  2. 2

    Decide whether your risk is low, moderate or high

    A quick way to classify general liability claim exposure:

    • Low exposure: Primarily remote/office work, limited in-person interactions, no job sites, no products
    • Moderate exposure: Regular in-person client contact, occasional off-site work, visitors on premises
    • Higher exposure: Job sites, physical work, frequent public interaction, products, or work that could cause expensive damage

    Your exposure level should influence whether you only meet the minimum requirement or go above it.

  3. 3

    Pressure-test your “worst plausible claim”

    Ask: If something goes wrong, what’s the most expensive realistic outcome?

    Think of your worst-case general liability situation in terms of:

    • A serious injury claim
    • Major damage to a client’s property
    • A product-related injury after sale
    • A completed-work issue discovered months later

    If that event feels like it could exceed the minimum limits, that’s a signal to increase them.

  4. 4

    Choose a base limit that matches your exposure

    Now translate Steps 1–3 into a general liability insurance limit decision:

    • If you have low exposure and no strict requirements, a lower limit may be sufficient.
    • If you have moderate exposure, choose limits that go beyond the minimum requirement when the worst plausible claim could be costly.
    • If you have higher exposure, consider higher base limits and whether extra coverage above the base policy makes sense.
  5. 5

    Decide if you need extra protection above the base policy

    If any of these are true, it’s time to consider umbrella coverage as a part of your general liability policy:

    • Your contracts require higher limits than a base policy provides
    • You have large clients, high foot traffic, job sites or products
    • A single claim could materially harm your business finances

    Umbrella insurance is a way to increase liability limits without rebuilding your entire coverage plan.

General Liability Insurance: Next Steps

At this stage, we recommend that you compare general liability insurance providers and see how pricing varies for the same coverage. However, if you have a different goal in mind, we've provided guidance for common situations you may be in.

Start here (most businesses): Compare providers before getting quotes

Different insurers price the same business very differently. Reviewing providers first helps you understand who specializes in your industry, offers stronger policy terms or is known for lower rates before you begin the quoting process.

We've left resources below to help you start comparing:

Once you know which providers and coverage structure fit your situation, getting general liability insurance quotes helps you compare real pricing and finalize your policy.

If you’re unsure about your coverage level

If a contract or landlord requires proof of insurance

If cost is your main concern

If your business has multiple risk types

If your exposure feels higher than average

Get General Liability Insurance Quotes

If you are ready to compare general liability insurance quotes, MoneyGeek can match you to a top provider that suits your operations and risk. Use the tool below to get matched.

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About Angelique Palenzuela-Cruz

Angelique Palenzuela-Cruz headshot

Angelique Palenzuela-Cruz is a Content Writer at MoneyGeek specializing in business insurance, with a primary focus on three core coverage types: general liability, workers’ compensation and professional liability insurance. She creates in-depth content that helps small business owners understand policy terms, coverage options and state-by-state considerations so they can make informed insurance decisions.

With five years of experience in personal finance journalism, Angelique has covered a wide range of insurance and lending topics, including mortgages, HELOCs, home equity loans, and personal insurance products such as auto, homeowners, health and pet insurance. Her research-driven approach is informed by her Bachelor of Arts in Psychology, which shapes how she presents complex financial information in clear, accessible language for everyday readers making coverage decisions.

At MoneyGeek, she is committed to ensuring her content meets rigorous accuracy and quality standards, with every article developed under editorial review to help business owners better understand their coverage options.

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