You have launched your business. You have clients, revenue, and big dreams. But one slippery floor or one defective product could turn that dream into a nightmare.
In the world of small business, General Liability (GL) Insurance is not a luxury; it is the foundation. It is often the very first policy a business owner buys.
Whether you run a coffee shop, a marketing agency, or an Amazon dropshipping store, here is why you need GL coverage in 2025.
1. What Exactly Does General Liability Cover?
Think of GL insurance as your defense against "physical" world problems. It primarily covers three things:
- Bodily Injury: If a customer slips, falls, and breaks an arm in your office or shop.
- Property Damage: If you (or your employee) accidentally spill coffee on a client's expensive laptop.
- Advertising Injury: If you are sued for libel, slander, or using a competitor's slogan in your ads.
2. The "Amazon Seller" Rule (Product Liability)
If you sell products online (e-commerce), you might think you are safe because customers don't visit your home. You are wrong.
If a product you sell malfunctions and injures a customer (e.g., a phone charger catches fire), YOU can be sued, even if you didn't manufacture it.
Most major platforms like Amazon and Walmart now require sellers to have General Liability insurance once they hit a certain sales threshold (usually $10,000/month).
3. General Liability vs. Professional Liability
This is the most common confusion for new entrepreneurs.
- General Liability: Covers "accidents" (slips, falls, broken stuff).
- Professional Liability (E&O): Covers "bad advice" or service mistakes.
Verdict: Most businesses need BOTH. (See our guide on Professional Liability Insurance to learn more.)
4. How Much Does It Cost?
The best news? It is incredibly cheap compared to the protection it offers. For most small businesses, a $1 million GL policy costs between $30 and $50 per month.
Factors that affect your rate include your industry (construction costs more than consulting), your location, and your annual revenue.
5. What is a "BOP" (Business Owner's Policy)?
If you want to save money, ask your broker for a BOP. This is a bundle that combines General Liability with Commercial Property Insurance (to protect your equipment) at a discounted rate.
It is the "Happy Meal" of business insurance—cheaper and includes everything you need to get started.
FAQ: GL Insurance for Beginners
1. Is General Liability required by law?
Not usually by state law, but it is often required by contracts. Landlords require it to rent you office space, and clients often require it before signing a deal.
2. Does it cover my employees' injuries?
No. If an employee gets hurt on the job, that is covered by Workers' Compensation insurance, not General Liability.
3. Does it cover data breaches?
No. GL covers physical damage and advertising injury. For hacking and data theft, you need Cyber Liability Insurance.
4. Can I buy it online instantly?
Yes. In 2025, many "Insurtech" companies allow you to get a quote and download your Certificate of Insurance (COI) in less than 10 minutes.
5. What is a "Certificate of Insurance" (COI)?
This is a one-page document that proves you have insurance. Clients and landlords will ask you to send them a COI before they work with you.
Disclaimer: Every business is unique. This article provides general guidance. Speak with a licensed insurance agent to build a policy that fits your specific risks.