The short answer
The short version
- Most small businesses pay $500–$2,500/year for $1M/$2M general liability.
- Class code, revenue or payroll, and five-year loss history drive the price.
- A business owner's policy usually beats buying GL and property separately.
- The same risk can vary 30% between carriers — market it every renewal.
Typical general liability premiums
General liability (GL) is priced primarily on your industry class, annual revenue or payroll, and claims history. For a $1M per-occurrence / $2M aggregate limit, most small businesses land in the ranges below. These are broker-observed ranges for standalone GL, not a quote.
| Business type | Typical annual GL premium | Main rating basis |
|---|---|---|
| Consultant / professional office | $450 – $900 | Revenue |
| Retail store | $600 – $1,500 | Revenue / square footage |
| Restaurant | $1,200 – $3,500 | Revenue |
| Janitorial / cleaning | $900 – $2,400 | Payroll |
| Landscaping | $1,000 – $2,800 | Payroll |
| General contractor | $2,000 – $8,000+ | Receipts + subcontractor cost |
| Home care agency | $1,200 – $3,000 | Revenue |
What actually drives your premium
Underwriters build a GL rate from a handful of inputs. Understanding them tells you where you have leverage.
Class code is first: a roofer and a bookkeeper with identical revenue are not close on price. Revenue or payroll is the exposure base — premium scales with it. Loss history over the last five years matters more than most owners expect, and even small frequency (three $2,000 claims) hurts more than a single larger loss. Years in business, subcontractor use, contract requirements, and whether you also buy other lines from the same carrier all move the final number.
GL alone vs. a business owner's policy
If you have any business property — equipment, inventory, tenant improvements — a business owner's policy (BOP) bundles GL with property and usually costs less than buying the two separately. Most eligible small businesses should be quoted both ways.
How to lower the cost without gutting coverage
Report revenue and payroll accurately rather than conservatively — audits catch under-reporting and the bill arrives later with interest. Bundle GL with property, auto, and umbrella where one carrier will write it. Ask about a higher deductible only if you actually have the cash for it. Document safety, hiring, and subcontractor certificate collection procedures; underwriters price credibility. And market the account to multiple carriers at renewal — the same risk routinely draws a 30% spread between carriers.
Frequently asked questions
Is general liability required by law?
Not by state law in most cases, but it is effectively required by contract. Landlords, clients, general contractors, and licensing boards commonly require proof of $1M/$2M GL before you can start work.
How much general liability coverage do I need?
$1M per occurrence and $2M aggregate is the market standard and satisfies most contracts. Larger contracts often require an umbrella on top to reach $2M–$5M total.
Does general liability cover my employees' injuries?
No. Employee injuries are covered by workers' compensation. GL covers third-party bodily injury and property damage.