A $1 million general liability policy typically costs $40–$170 per month for most small businesses, depending on industry, revenue, location, and claims history. Higher-risk trades such as roofing or excavation can run $200–$600+ per month for the same limit. Who this is for: Small business owners, contractors, and service providers who need to budget for a $1M GL policy.
TL;DR / Key Takeaways
- Most small service businesses pay $40–$120/month for a $1M/$2M occurrence-based general liability policy.
- Higher-risk trades (roofing, demolition, structural work) typically pay $200–$600+/month for the same $1M limit.
- The $1M figure refers to the per-occurrence limit; policies commonly bundle a $2M aggregate — the most the insurer will pay in a policy year across all claims.
- Your actual premium depends on payroll or revenue (the audit basis), class code, state, years in business, and prior claims.
- A million-dollar policy is often the minimum required by commercial landlords, GCs, and government contracts — not an extravagant amount.
What Does a "$1 Million" Liability Policy Actually Mean?
When people say "a million-dollar policy," they almost always mean a $1,000,000 per-occurrence / $2,000,000 aggregate general liability (GL) policy. Here is how those numbers work:
- Per-occurrence limit ($1M): The maximum your insurer will pay for any single covered claim — bodily injury, property damage, or personal and advertising injury arising from your operations.
- General aggregate limit ($2M): The total the insurer will pay across all claims during the policy period (typically 12 months).
- Products-completed operations aggregate ($2M): A separate aggregate limit covering claims that arise after your work is finished — critically important for contractors.
These limits are industry standard and satisfy most commercial lease agreements, general contractor requirements, and municipal permits. Some project owners require higher limits ($2M/$4M or umbrella endorsements); your broker can layer on a commercial umbrella to reach those thresholds.
What Factors Drive the Monthly Cost?
Underwriters price general liability on a handful of key rating variables. Understanding them helps you predict where your quote will land.
| Rating Factor | Low-Cost Impact | High-Cost Impact |
|---|---|---|
| Industry / class code | Clerical, retail, consulting | Roofing, excavation, demo, structural |
| Annual revenue or payroll | Under $250K | $1M+ (audit basis) |
| Years in business | 5+ years with no claims | Start-up or claims history |
| State of operations | Lower-litigation states (e.g., WI, IA) | High-litigation states (e.g., FL, NY, CA) |
| Number of employees | Solo operator | 10+ field workers |
| Prior losses | Clean 5-year loss run | One or more paid claims |
| Subcontractor use | None or minimal | Heavy use, uninsured subs |
| Coverage endorsements | Basic form | Blanket AI, primary/non-contributory, WOS |
Tip: Blanket additional insured (AI) endorsements, primary and non-contributory wording, and waiver of subrogation (WOS) are often required by contract — but each adds a small premium. Ask your broker what is included vs. priced separately.
Monthly Cost Ranges by Trade / Industry
The table below shows illustrative ranges for a $1M/$2M occurrence-form GL policy on a small business (annual revenue roughly $250K–$750K, clean loss history, one state of operations). Actual quotes will vary.
| Business Type | Estimated Monthly Premium | Notes |
|---|---|---|
| Business / management consultant | $40–$70 | Low physical-injury exposure |
| Cleaning / janitorial | $55–$110 | Slip-and-fall exposure at client sites |
| Landscaping / lawn care | $65–$130 | Equipment and property damage risk |
| Plumbing / HVAC | $90–$180 | Water damage, product liability |
| General contractor (residential) | $130–$280 | Higher aggregate exposure, subs |
| Electrical contractor | $110–$220 | Fire and electrocution risk |
| Painting contractor (commercial) | $80–$160 | Overspray, fall protection |
| Roofing contractor | $250–$600+ | Highest-risk trade; fall/weather losses |
| Excavation / grading | $200–$500+ | Underground utility, property damage |
| Retail shop (brick-and-mortar) | $50–$90 | Premises liability dominant |
| Restaurant / food service | $75–$150 | Slip-and-fall, liquor liability separate |
| IT / technology services | $45–$85 | GL only; E&O/cyber usually separate |
Ranges are industry estimates based on typical carrier filings and are not a guaranteed quote. Premium is subject to underwriting review.
How General Liability Premiums Are Calculated
GL policies are typically rated on either gross annual revenue or total payroll (the audit basis), multiplied by a rate per $1,000 of that exposure base. The insurer assigns your business a class code (ISO or carrier-proprietary) that sets the base rate. At policy expiration, most GL policies are subject to a premium audit: you report your actual revenue or payroll, and the final premium is adjusted up or down.
How a GL Quote Is Calculated in 5 Steps
- Assign a class code. The underwriter assigns an ISO classification based on your primary business operations (e.g., roofing, janitorial, consulting). Each code carries a base rate per $1,000 of payroll or revenue.
- Apply the exposure base. Multiply the rate by your estimated annual payroll or revenue (stated on the application). Example: a rate of $5.00 per $1,000 of revenue on a $400,000-revenue business = $2,000 estimated annual premium.
- Apply schedule modifications. Underwriters add or subtract credits/debits for loss history, years in business, safety programs, and coverage endorsements.
- Add endorsement premiums. Blanket AI, primary/non-contributory, WOS, and hired/non-owned auto each carry a flat or percentage add-on.
- Divide by 12 for the monthly equivalent. Most policies are paid annually or semi-annually; divide by 12 to get the monthly figure for budgeting.
Real-World Example: Residential Plumber in Texas
Business profile: Solo plumber, $350,000 annual revenue, Houston TX, 4 years in business, clean loss run.
- Policy: $1M/$2M occurrence GL, products-completed operations included
- Class code: Plumbing (ISO 98483 equivalent [verify state])
- Estimated annual premium: $1,440–$2,160
- Estimated monthly cost: $120–$180/month
- Endorsements included: Blanket additional insured (required by most GC contracts), waiver of subrogation
- Audit basis: Gross receipts; if revenue increases to $500K by year end, the premium is adjusted at audit
This is an illustrative scenario, not a guarantee. Texas is a non-subscriber state for workers' comp, but that does not affect GL pricing.
If this plumber adds an employee, annual revenue grows to $550K, and two GC contracts require primary/non-contributory language, the renewal premium would likely increase to $1,800–$2,700/year ($150–$225/month) — still within typical market ranges.
FAQ
Q: Is a $1 million liability policy enough for my business? $1M per occurrence is the most commonly required minimum in leases, GC subcontracts, and municipal permits. It is sufficient for many small businesses. However, if you work on high-value projects, operate in a high-litigation state, or have a contract requiring higher limits, a commercial umbrella policy can extend your coverage to $2M, $5M, or more at a relatively low additional cost.
Q: What is the difference between the $1M per-occurrence limit and the $2M aggregate? The per-occurrence limit ($1M) caps what the insurer pays on any single claim. The aggregate limit ($2M) caps total payouts across all claims during the policy year. Once the aggregate is exhausted, you are personally responsible for additional claims until the policy renews.
Q: Why do some contractors pay $400/month for the same $1M limit I can get for $80/month? The difference is almost entirely driven by class code and loss exposure. Roofing and excavation carry catastrophic injury and property-damage potential, so carriers charge substantially higher rates per $1,000 of payroll. A consultant working at a desk poses a fraction of the physical-injury risk a roofer does.
Q: Does a $1M liability policy cover my employees if they are injured on the job? No. General liability covers third-party bodily injury (clients, the public, property owners) — not your own employees. Employee injuries are covered by workers' compensation, which is a separate policy required by most states once you have employees [verify state].
Q: Can I pay monthly instead of upfront? Many carriers and premium finance companies offer monthly installment plans. Expect a small finance charge (3–8% annually) when you spread payments. Paying in full often earns a modest discount.
Q: Does my policy reset to $1M per occurrence each claim? Yes — on an occurrence-form policy, each separate covered occurrence triggers a fresh $1M per-occurrence limit, subject to the $2M annual aggregate. On a claims-made policy, the aggregate applies similarly, but coverage is tied to when the claim is reported, not when the incident happened.
Q: Will my premium go up after a claim? Generally yes. A paid claim typically results in a surcharge at renewal and may trigger non-renewal with some carriers. Insurers look at your 5-year loss run when quoting. This is why even small claims warrant discussion with your broker before filing.
Q: Can I get a $1M liability policy with a same-day certificate? Yes, in most cases. Standard GL policies for low-to-moderate-risk businesses can bind in hours and issue certificates of insurance (COIs) the same day through an independent agent with carrier access.
Why Morrow for Your $1M Liability Policy
- Independent agency, multiple carriers. Morrow places coverage with a broad panel of admitted and E&S carriers [Morrow to confirm carrier list], which means we shop the market to find the best rate for your class code — not just the one carrier we represent.
- Same-day COI issuance. When your GC or landlord needs a certificate immediately, Morrow's team can bind coverage and issue certificates quickly — often the same business day for standard risks.
- Trade-specific expertise. We regularly place GL for contractors, service businesses, landlords, and retail operations. We know which carriers are competitive for your class code and what endorsements your contracts actually require.
- Audit support. GL policies are subject to premium audits at expiration. Morrow walks you through the audit process to make sure you report correctly and don't overpay.
- Real claims advocacy. If a claim happens, you have an agent who knows your policy, your business, and how to communicate with the carrier's claims team on your behalf.
Get a Quote
Ready to find out your actual monthly cost? Contact Morrow for a no-obligation commercial GL quote. We'll ask a few questions about your business, pull competitive options, and have a number for you fast.
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Trust strip: Morrow (Afthonea Inc, DBA Morrow) is a licensed independent commercial P&C insurance agency [Morrow to confirm licensed states and NPN]. We work with A-rated admitted carriers and select E&S markets. [Morrow to confirm carrier partners and any review platform ratings.]
Related Resources
- Commercial General Liability Insurance — Overview
- What Does General Liability Insurance Not Cover?
- What Is an Additional Insured and Why Do Clients Ask for It?
- How Much Does It Cost to Add an Additional Insured?
- Is General Liability Insurance Required by Law?
- General Liability Insurance Cost Guide
Author: Written by the Morrow Commercial Insurance Editorial Team. Content reviewed for factual accuracy against ISO coverage forms, NAIC rate filings, and current carrier underwriting guidelines.
Published: June 2026 | Last updated: June 2026
Sources: - Insurance Information Institute (III) — Business Insurance Cost Data - National Association of Insurance Commissioners (NAIC) — Commercial Lines Rate Filings - ISO (Verisk) — Commercial General Liability Coverage Form CG 00 01 - National Council on Compensation Insurance (NCCI) — Class Code Reference (for workers' comp context) - U.S. Small Business Administration (SBA) — Business Insurance Overview - State Departments of Insurance (verify applicable state rules for audit, mandatory coverage, and rate filings)