What Level of General Liability Insurance is Right for Your Business?

Small business owners are always on a tight budget, and when it comes to insurance, a lot of owners will overpay. It’s smart to take out more insurance than you need to an extent. If you have the highest limits, you’re paying for insurance that you’ll never actually use.

If you’re a professional, such as an IT professional, you’ll want two types of main insurance:

  1. General Liability Insurance
  2. Professional Liability Insurance

Both of these insurance options offer a strong foundation for tech startups, doctors, veterinarians and other business professionals.

Insurance Depends on Your Business

Risk is the ultimate factor in determining how much general liability insurance your business really needs. A lot of businesses will do a quick inventory of their team to better understand the risks that the team faces.

Of course, you don’t know all of the risks that you’ll face because there will always be unknowns in business.

A few of the considerations are:

  • Employee experience
  • Business locations
  • Number of employees
  • Size of business
  • Type of business
  • Customers

A licensed agent is the best source of information to determine your business’ needs. The agent will be able to help you determine what coverage you need and what coverage you can avoid. A basic policy may not be enough for your business, and this is where “endorsements” can be added.

These endorsements are essentially policy add-ons that cover any gaps that you may have in your insurance.

General liability insurance should be no less than $1 million for bodily injuries and property damage. You should also have $1 million in coverage for:

  • Personal injury liability
  • Advertising liability
  • Products
  • Completed projects

You will also want to consider $2 million general aggregate coverage. Again, riskier business types will demand higher policy limits. An insurance agent will be able to walk you through the entire process to help you better find a policy limit that meets your needs.

General liability insurance is the basic insurance that you must have.

Expected Costs for General Liability Insurance

Liability risks are different depending on the industry that you’re working in. You’ll find that the IT field has costs that can be:

  • $500 to $900 annually if you’re a contractor or a small firm with just a few employees
  • $3,500+ per year for an IT firm with 20 to 50 employees

If you have a robust operation, you’ll likely have an easier time paying for your insurance than a small business owner.

Professional liability insurance will cost most freelancers and contractors $1,000 to $1,500 per year. Large firms that bring in over 10 million a year will often pay $14,000 or more annually for their insurance. Small firms can expect to pay $2,500 to $5,000 per year.

On the low-end, you’ll be paying between $1,500 and $2,400 a year for general liability insurance and professional liability insurance.

Working with a broker like brokerlink.ca will lead to additional savings.

Brokers will be able to receive quotes from multiple insurance companies and help you find the best rate for your business.


Alex is a small business blogger with a focus on entrepreneurship and growth. With over 5 years of experience covering the startup and small business landscape, Alex has a reputation for being a knowledgeable, approachable and entrepreneurial-minded blogger. He has a keen understanding of the challenges and opportunities facing small business owners, and is able to provide actionable advice and strategies for success. Alex has interviewed successful entrepreneurs, and covered major small business events such as the Small Business Expo and the Inc. 500|5000 conference. He is also a successful entrepreneur himself, having started and grown several small businesses in different industries.