Cost of General Liability Insurance

Q: How much does general liability insurance cost per month?

Most small businesses pay between $40 and $125 per month ($500–$1,500 annually) for a standard $1M/$2M CGL policy. Contractors and higher-hazard trades typically pay $200–$600 per month or more. Monthly payment plans are widely available, though they usually add a 3–5% installment fee.

Q: What's the difference between occurrence and claims-made general liability?

An occurrence form covers claims arising from incidents that happened during the policy period, regardless of when the claim is filed. A claims-made form covers claims filed while the policy is active. Most CGL policies for contractors are occurrence-form; professional liability (E&O) policies are typically claims-made. Occurrence form is generally preferred because it doesn't require tail coverage when you switch carriers.

Most small businesses pay between $500 and $1,500 per year for a $1M/$2M general liability policy. Actual premiums vary widely based on revenue, industry, payroll, location, and claims history. High-risk trades like roofing or excavation can pay $5,000–$15,000 or more annually on the same limits.

Who this is for: Business owners, contractors, and operators shopping for commercial general liability (CGL) coverage and wanting to understand what drives the price before requesting a quote.

TL;DR — Key Takeaways

Median annual premium for a CGL policy with $1M per-occurrence / $2M aggregate limits is roughly $700–$1,200 for low-risk service businesses.
Industry is the single biggest cost driver — a florist pays far less than a roofing contractor on identical limits.
Premiums are typically calculated on revenue, payroll, or square footage, depending on the ISO classification code.
Purchasing a Business Owner's Policy (BOP) instead of standalone CGL often cuts the combined GL + property premium by 15–25%.
Higher deductibles and a clean loss history are the two most effective ways to lower your premium without reducing coverage.

What Does General Liability Insurance Actually Cost?

The table below shows realistic annual premium ranges by business type for a $1,000,000 per-occurrence / $2,000,000 aggregate CGL policy. These are indicative ranges based on industry data; your specific quote depends on revenue, payroll, state, and loss history.

Business Type	Annual Revenue (Example)	Estimated Annual Premium
Freelance consultant / IT	$150,000	$400 – $700
Retail shop (no liquor)	$500,000	$600 – $1,200
Restaurant / food service	$750,000	$1,500 – $3,500
Janitorial / cleaning	$300,000	$800 – $1,800
General contractor (light commercial)	$1,000,000	$3,000 – $8,000
Roofing contractor	$500,000	$5,000 – $15,000
Landscaping / tree service	$400,000	$2,500 – $6,000
Plumbing contractor	$600,000	$2,000 – $5,500
Electrician	$500,000	$1,800 – $4,500
HVAC contractor	$700,000	$2,200 – $5,000

Note: These ranges reflect typical market conditions as of mid-2026. Premiums in high-cost states (CA, FL, NY) can run 20–40% above the national midpoint. Always obtain at least three competitive quotes.

What the Policy Actually Covers

A standard CGL policy (ISO form CG 00 01) covers three broad insuring agreements:

Bodily Injury and Property Damage (BI/PD) — third-party injuries or property damage arising from your operations, products, or completed work.
Personal and Advertising Injury — libel, slander, copyright infringement in advertising, wrongful eviction.
Medical Payments — no-fault medical expense for minor third-party injuries on your premises (typically $5,000–$10,000 sub-limit).

It does not cover: your own employees' injuries (workers' compensation), professional errors (E&O), auto accidents (commercial auto), or intentional acts.

What Factors Drive the Cost of General Liability Insurance?

Underwriters evaluate a dozen or more variables. The most impactful:

Industry / Classification Code — the ISO class code assigned to your business determines the base loss cost per unit of exposure. Hazardous trades (demolition, roofing) carry higher base rates.
Revenue or Payroll (the "exposure base") — most CGL policies are rated on gross sales or total payroll. As your revenue grows, your premium grows proportionally (subject to audit at policy end).
Prior Loss History — three to five years of loss runs are reviewed. Frequent small claims hurt; a single large paid loss can increase premiums 20–50% for multiple renewal cycles.
Limits of Liability — stepping from $1M/$2M to $2M/$4M typically adds 20–35% to the base premium. Umbrella/excess layers are usually more cost-efficient for higher limits.
State / Jurisdiction — each state has its own rate filings, tort environment, and regulatory environment. Florida and California consistently rank among the most expensive states for GL.
Deductible or Self-Insured Retention (SIR) — choosing a $2,500 or $5,000 per-claim deductible can reduce premium 5–15%, depending on the carrier.
Additional Insureds and Contract Requirements — blanket additional insured endorsements (ISO CG 20 10 / CG 20 37) add modest premium but are frequently required by general contractors and property owners.
Years in Business / Experience — newly formed businesses often pay a "start-up surcharge" until three or more years of verifiable operating history exist.
Subcontractor Use — carriers scrutinize how much work you subcontract. Uninsured or under-insured subs can significantly increase your GL cost (or trigger an exclusion).

How to Get the Lowest Rate Without Sacrificing Coverage — 6-Step Process

Gather your exposure data first. Pull three years of revenue or payroll, plus three years of loss runs (even if "no losses"). Accurate data avoids mid-term audits and premium surprises.
Classify your business correctly. An incorrect ISO classification — either too broad or too narrow — leads to mispriced coverage. An independent broker should review your class codes before submission.
Submit to multiple admitted carriers. Admitted carriers file rates with state departments of insurance; pricing across four or five carriers on identical data can vary by 40% or more for the same limits.
Consider a BOP if you qualify. Most businesses with under $5M in revenue and under 25,000 sq ft of space qualify. BOP packages GL + commercial property at a discount.
Evaluate deductible options. A $2,500 deductible applied to property-damage claims (not bodily injury) is a common middle ground: you retain small losses, carrier covers catastrophic ones.
Review at renewal, not just at binding. Market conditions shift; premiums that were competitive two years ago may now be 20% above market. Morrow re-shops your account at each renewal automatically.

Real-World Example: Texas Plumbing Contractor

Business profile: A residential and light-commercial plumbing company based in Austin, TX. Annual revenue: $850,000. Three full-time plumbers plus the owner. No prior losses in five years.

Coverage purchased: - CGL: $1,000,000 per occurrence / $2,000,000 aggregate (occurrence form) - Products-completed operations aggregate: $2,000,000 (included) - Blanket additional insured — ongoing and completed operations (ISO CG 20 10 / CG 20 37) - Waiver of subrogation endorsement

Illustrative premium (mid-2026 Texas market): Approximately $3,200–$4,400 annually, depending on carrier.

Scenario: During a renovation, a plumber accidentally damages a copper supply line inside a wall, causing water damage to finishes and flooring. The homeowner files a property-damage claim for $22,000. The CGL policy responds under the BI/PD coverage. The contractor's five-year clean loss history kept the renewal increase to under 8%.

This is an illustrative example. Actual premiums and claim outcomes depend on specific policy language, carrier, and state law.

Frequently Asked Questions

How much does general liability insurance cost per month?

Most small businesses pay between $40 and $125 per month ($500–$1,500 annually) for a standard $1M/$2M CGL policy. Contractors and higher-hazard trades typically pay $200–$600 per month or more. Monthly payment plans are widely available, though they usually add a 3–5% installment fee.

What does $1 million in general liability cover?

A $1,000,000 per-occurrence limit pays up to $1M for any single covered claim (bodily injury, property damage, or personal/advertising injury). The $2,000,000 aggregate is the most the policy will pay across all claims in the policy year. These are the most common limits requested by commercial leases and general contractor agreements.

Is general liability insurance tax deductible?

Yes. Premiums paid for business insurance are generally deductible as an ordinary and necessary business expense under IRC Section 162. Consult a CPA for your specific situation.

Does general liability cover my employees?

No. CGL covers third-party bodily injury — meaning injuries to customers, visitors, or the public. Injuries to your employees are covered by workers' compensation insurance, which is legally required in most states once you have one or more employees [verify state thresholds].

Can I get general liability insurance the same day?

Many carriers offer same-day binding for low-to-moderate-hazard businesses (retail, service, consulting). Contractors with higher exposure may require an underwriter review of loss runs and subcontractor agreements before binding, which typically takes one to three business days.

What's the difference between occurrence and claims-made general liability?

An occurrence form covers claims arising from incidents that happened during the policy period, regardless of when the claim is filed. A claims-made form covers claims filed while the policy is active. Most CGL policies for contractors are occurrence-form; professional liability (E&O) policies are typically claims-made. Occurrence form is generally preferred because it doesn't require "tail" (extended reporting period) coverage when you switch carriers.

Will my premium go up after a claim?

Typically, yes. A paid claim can increase your renewal premium by 10–30% for two to four renewal cycles, depending on severity and carrier. A claim that is filed but closed with no payment ("no-pay close") usually has less impact. Maintaining a clean loss history over three or more years is the most reliable way to access preferred-market pricing.

Do I need general liability insurance if I work from home?

Yes, in most cases. Homeowners insurance explicitly excludes business activities. If a client visits your home office and is injured, or if your business causes third-party property damage, a CGL policy (or a home-based business endorsement) provides the protection your personal policy won't.

Why Choose Morrow for Your General Liability Insurance

Independent broker, multiple carriers. Morrow is an independent commercial P&C agency, meaning we submit your account to a curated panel of admitted and E&S carriers — not just one company — so you get competitive pricing on every renewal. [Morrow to confirm carrier panel details]
Contractor and trade-business specialization. Our team underwrites and places GL for contractors across the risk spectrum — from single-trade electricians to multi-state general contractors — and we know which carriers are currently competitive for which classifications.
Fast certificate and COI turnaround. Certificates of insurance (ACORD 25) are typically issued same-day. We maintain your certificate holder list and push COIs automatically when your policy renews — no chasing down paperwork before a job starts.
Audit support and exposure management. GL premiums are audited at policy end. We walk you through the audit process, help you organize payroll and revenue records by class code, and dispute any audit errors on your behalf.
Claims advocacy. When a claim is filed, Morrow acts as your advocate — not the carrier's. We monitor claim handling, push for timely resolution, and escalate when reserves or coverage positions seem unreasonable.

Get a General Liability Quote from Morrow

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Trust strip: Morrow (Afthonea Inc, DBA Morrow) is a licensed independent commercial insurance agency. [Morrow to confirm licensed states and license numbers]. We place coverage with A-rated admitted and surplus lines carriers. [Morrow to confirm carrier names and AM Best ratings]. [Morrow to confirm reviews / rating platform link]

Author: [Morrow to confirm — e.g., "Jane Smith, CPCU, CIC — Commercial Lines Practice Lead at Morrow"] Published: June 2026 Last Updated: June 2026

Sources consulted: - Insurance Services Office (ISO) — CGL form CG 00 01 and classification filing data - National Association of Insurance Commissioners (NAIC) — market data reports - National Council on Compensation Insurance (NCCI) — class code and exposure basis references - Insurance Information Institute (III) — industry premium benchmarks - Internal Revenue Service (IRS) — Publication 535, Business Expenses - State Departments of Insurance (TX, CA, FL, NY) — rate filing and regulatory data - AM Best — carrier financial strength ratings