Liability Coverage Needed Calculator

Frequently Asked Questions

How much general liability coverage does my business need?

Typical small business GL limits are $1M per occurrence / $2M aggregate. Higher-risk businesses (construction, events, manufacturing) and those with major contracts often require $2M/$4M. Many landlords and clients contractually require $1M minimum.

What does general liability NOT cover?

Employee injuries (need workers comp), professional mistakes (need E&O/professional liability), auto accidents (need commercial auto), data breaches (need cyber), and damage to your own property. GL is third-party bodily injury and property damage only.

How much does small business liability insurance cost?

Insureon's data shows small businesses pay a median of $42/month ($504/year) for general liability. Low-risk businesses (consulting, marketing) start at $25/month; contractors and restaurants pay $80-$150/month.

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This calculator provides estimates based on general assumptions. Actual insurance costs and coverage vary by insurer, location, and individual risk factors. Not a quote or binding offer. Contact insurance providers directly for accurate quotes and coverage options.

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How This Calculator Works

This calculator sizes a commercial general-liability policy. It starts at 2× annual revenue as the baseline exposure, then scales by client base - 1.0× for a small book (1–100 clients), 1.5× medium, 2.5× large - and adds a 1.25× loading if you use contractors or subcontractors (their work creates your liability). It then floors the result at a $1,000,000 minimum and snaps up to the next standard policy tier ($1M / $2M / $5M / $10M). Premium is estimated at about $500 per $1M of limit, dropping to $400 once you exceed 20 employees.

Why Revenue, Client Count, and Contractors Drive the Number

General liability covers third-party bodily injury, property damage, and advertising injury. More revenue means more customer interactions and bigger contracts; a large client base multiplies the number of parties who can sue. Contractors raise exposure because you can be held vicariously liable for their negligence on your jobs - the 1.25× loading reflects that. Business assets matter too: a judgment can reach everything the company owns, not just its cash.

What This Policy Does - and Does Not - Cover

Covered: a customer slip-and-fall, damage you cause to a client's property, libel/slander in advertising.

NOT covered: professional errors (need E&O / professional liability), employee injuries (need workers' comp), data breaches (need cyber), and your own property.

Many leases and client contracts require a $1M–$2M GL limit and naming them as additional insured - coverage is often a condition of doing business, not optional.

Common Mistakes

Buying the contract minimum and stopping. A single serious injury claim routinely exceeds $1M in defense plus damages.

Skipping an umbrella. A commercial umbrella adds $1M–$5M cheaply on top of GL - far better dollar-for-dollar than raising the primary limit.

Not collecting subcontractor COIs. Uninsured subs fall back onto your policy and inflate audits and claims.

Letting coverage lag growth. Limits set at $500K revenue are dangerously thin at $5M.

Setting the Right Limit

Treat the calculated figure as a starting point, then layer a commercial umbrella to reach the total - it is the cheapest way to buy high limits. Re-evaluate at every renewal and whenever revenue, headcount, or contract requirements jump. Keep the policy occurrence-based rather than claims-made where possible so a claim filed years later is still covered, and verify the per-occurrence and aggregate limits separately - the aggregate caps a bad year.

Liability Coverage Needed Calculator

Frequently Asked Questions

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