How to Choose General Liability Insurance for a Small Business
General liability is the most-bought and least-read policy in small business. The differences that matter are not the limit on the front page — they are five endorsements and two exclusions on pages nine through fourteen.
- $1 million per occurrence and $2 million aggregate is the near-universal contract standard; it is a requirement, not a risk assessment.
- General liability covers bodily injury, property damage and personal and advertising injury caused by your operations — never your own work product and never professional advice.
- Products-completed operations is the coverage that responds after you leave the job. Verify it is included at the full aggregate, not sublimited.
- Blanket additional insured with ongoing and completed operations, plus waiver of subrogation and primary and non-contributory wording, is what contracts actually require.
- A business owner’s policy bundling general liability with property is usually cheaper than buying the two separately.
What it covers, plainly
Three buckets. Bodily injury to someone who is not your employee. Property damage to something that is not yours. And personal and advertising injury — libel, slander, copyright infringement in advertising.
A customer trips over your extension cord: covered. You put a ladder through a client’s window: covered. A competitor sues over your ad copy: covered. Your own bad workmanship that has to be redone: not covered, ever, under any general liability policy.
That last point is the one that generates the most disappointed calls. General liability covers the damage your defective work causes to other property, not the cost of fixing your work. That gap is a business cost, not an insurable one.
The endorsements contracts require
When a general contractor or a commercial landlord reviews your certificate, they are looking for four things, and a policy without them fails the review no matter how high the limit.
The exclusions worth checking for your trade
Every general liability policy is standard until the carrier attaches exclusions. Common ones that gut coverage for specific businesses: a residential construction exclusion on a contractor policy, an exterior insulation exclusion, a subcontractor warranty requiring your subs to carry equal limits, a height limitation, and an action-over exclusion that removes coverage for employee injury claims brought against a general contractor.
The action-over exclusion is the one to fight hardest. On New York construction work in particular, an action-over exclusion makes the policy nearly worthless for the claim most likely to happen.
Also look for assault and battery limitations if you are hospitality, communicable disease exclusions if you are food or care, and pollution exclusions if you touch fuel, sewage or chemicals.
What it costs in 2026
Pricing is driven by class code, revenue, payroll and claim history — in that order. Same limits, wildly different prices by industry.
How to compare two quotes properly
Put the declarations pages side by side and compare five lines: the per-occurrence and aggregate limits, the products-completed operations aggregate, the deductible, the list of endorsements, and the list of exclusions. Price comes sixth.
Then check the carrier’s AM Best rating and whether the policy is admitted or surplus lines. Surplus lines policies are legitimate and often necessary for harder risks, but they are not backed by state guaranty funds and their forms are non-standard — meaning the exclusions can be anything.
Finally, ask how certificates are issued. A carrier or broker that takes three days to send an additional insured certificate will cost you a job at some point, and that is a real cost that never shows up in the premium comparison.