Best General Liability Insurance for LLCs in 2023

MoneyGeek analyzed hundreds of general liability quotes, comparing affordability, customer satisfaction, financial stability and the claims process to bring you the best general liability insurance carriers for an LLC.

MoneyGeek used an LLC with following profile to gather general liability quotes:

• Five years in business in the software development industry
• 20 employees
• $5 million in annual revenue
• $1,250,000 in annual payroll costs

Although the LLC business structure offers a great solution to protect the business owner’s personal assets, it can’t protect against injury or property damage claims. General liability insurance for LLCs can be an affordable way to protect the business’ finances.

Nationwide is the overall best general liability insurance company for LLCs. It has the lowest customer complaint score and a long history of strong financial stability, showing its capacity to pay claims. Nationwide is also one of the more affordable providers, with an average general liability insurance cost for LLCs of $560 per year.

The runner-up for best general liability insurance for LLCs is The Hartford. This carrier has excellent financial strength, few customer complaints and is quick to provide quotes online. Its average general liability insurance cost for LLCs is higher than Nationwide’s, at $820 per year compared to Nationwide’s $560.

If price is the most important factor for insuring your LLC, consider Next for general liability insurance. Next has the cheapest average general liability insurance cost for LLCs, averaging $311 annually. It also offers fast online quotes but has higher-than-average customer complaints and less financial stability than its competitors.

If you prefer a fast and easy online quote for your LLC’s general liability insurance, consider Thimble as your top choice. Not only does this carrier have excellent financial strength, but it also provides the quickest online quotes, taking most users just 29 seconds to complete the application and get a quote.

The average general liability insurance cost for LLCs is $806 per year or $67 per month for a policy with a $2 million aggregate limit, $1 million occurrence limit and $0 deductible.

Several factors impact insurance costs, including:

• Industry risks: The more risk in the industry, the higher the chance of policyholders filing claims and companies in a higher-risk industry will pay higher rates for insurance.
• Location: Companies in risk-prone locations can pay more for insurance than lower-risk locations. Insurance companies look at factors like weather events and crime to determine rates.
• Number of employees: The more employees you have, the higher your payroll costs, which can increase how much you pay for general liability insurance.
• Previous claims: If your business has prior claims, you could end up paying more for coverage than a claim-free LLC would.
• Coverage: Higher coverage limits provide more protection, but more coverage usually means higher insurance premiums.

General liability insurance protects you against claims filed against your LLC, whether real or unfounded. Claims are typically accusations of the company causing harm to a person or their property. Even if the claim is found to be false, the LLC can incur costly legal fees. General liability insurance for LLCs helps protect the LLC’s assets against third-party or customer claims.

General liability insurance may cover:

• Bodily injury: A customer slips inside a business, breaking their arm as they fall. General liability insurance may pay for their medical costs, regardless of fault.
• Property damage: This coverage will pay if you’re held legally responsible for damage to another person’s property while in your place of business or if your employee causes damage to a customer’s home or business while on the clock.
• Reputational damage: If you’re accused of libel or slander against another business, general liability will cover the cost of your legal defense.
• Copyright infringement: If you’re accused of taking someone else’s marketing idea or using their work without permission, this policy will cover your legal fees.
• Advertising injury: If your LLC defames someone else, a business owner or company, the general liability coverage can cover your defense.

Although general liability insurance for LLCs has a relatively wide scope, it doesn’t cover every type of claim. General liability insurance typically won’t cover:

• Damaged business equipment: If there is damage to the LLC’s business location or equipment, there is no coverage against claims for fire, theft, wind and other losses.
• Business vehicle accidents: General liability doesn’t cover accidents or events that involve the business’ work vehicles.
• Employee injury or illness: If your employee gets hurt or sick while on the job, general liability doesn’t provide employee benefits.
• Professional services mistakes: If a mistake you make causes your client to suffer monetary damages, there is no coverage under a general liability insurance policy.

Business owners seeking coverage in these areas should consider purchasing additional insurance to protect the LLC and its employees.

While general liability insurance provides basic business coverage, LLCs may need other insurance policies to protect the business adequately.

Additional business insurance for LLCs can include:

• Business income insurance: If the business cannot operate, business income insurance can provide coverage for its lost income until it’s back up and running.
• Commercial auto insurance: This policy provides coverage for accidents, damage or injuries you or your employees incur while operating a work vehicle.
• Commercial property insurance: This policy covers the business’ building, equipment and tools, whether you own or rent them.
• Professional liability insurance: Also called errors and omissions insurance, this liability insurance protects the business if a claim is filed for errors or mistakes in provided services.
• Workers’ compensation insurance: Provides employee benefits for work-related injuries or illnesses. Most states have specific coverage requirements to meet.

Owning a business can be profitable, but one claim against the company could be detrimental. Understanding how general liability insurance could protect your business can help you decide if it's the right choice for your LLC.