⏰ Estimated read time: 6 minutes
Structuring your business as a limited liability company, or LLC, offers some protection for your personal assets. But you should still have general liability insurance to protect your business assets in case a customer or another third party files a legal claim against you.
Here’s where to get this business insurance coverage and how it can protect you.
Best general liability insurance for LLCs
Next: Best overall general liability insurance for LLCs
5.0
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Next sells general liability insurance online to LLCs in a variety of industries, from beauticians to pet trainers. Policies start at $11 per month, the company says. And once you’re covered, you can add an additional insured online and access your certificate of insurance whenever you need it.
If you want a general liability insurance policy that you can buy quickly and manage online, Next might be a good fit. Read NerdWallet’s review of Next business insurance.
Thimble: Best for temporary general liability coverage
4.0
NerdWallet rating
Thimble sells general liability insurance policies by the job or by the month in addition to the usual one-year policy term. As with Next, you can manage your policy entirely online, including adding additional insureds and sharing your certificate of insurance with others. Thimble says its policies start at $17 per month.
If your LLC is preparing to work a specific event or exhibit on a specific site and you’re trying to keep expenses as low as possible, Thimble’s short-term policies may be your best bet. Read NerdWallet’s review of Thimble business insurance.
Chubb: Best business owner’s policy
5.0
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If your LLC rents space or you’re living on your business income, you may want to buy a business owner’s policy. Along with general liability insurance, BOPs include commercial property insurance, which protects your business’s stuff in case it’s damaged or destroyed, and business interruption insurance, which replaces the revenue you lose while recovering from whatever damaged or destroyed your property.
If you need all the protection provided by a BOP, Chubb’s is a strong choice because it includes extra expense coverage, a component of business interruption insurance that can increase your payout after property damage and isn’t always part of BOPs. Read NerdWallet’s review of Chubb business insurance.
» MORE: How to get business insurance
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What does general liability insurance for LLCs cover?
General liability insurance protects an LLC’s assets when the business has been accused of harming another person or their property.
And even if the claim brought against you is ultimately unfounded, you could still find your business on the hook for thousands of dollars in legal fees. In these situations, general liability insurance can cover the costs associated with third-party claims against your LLC, including legal and settlement costs.
General liability insurance covers claims like the following:
A customer slips and falls inside your store, breaking their wrist. General liability insurance would cover their medical treatments, regardless of who’s to blame for the injury.
You accidentally knock over a stack of antique china while cleaning a customer’s home, shattering it. General liability insurance could pay out the customer’s property damage claim.
A competitor opens their doors a month before you do and accuses you of stealing their business idea. General liability insurance could cover the cost of defending your business in court.
Even if you don’t think you need coverage, you may find that contractors, landlords and clients ask to see your certificate of liability insurance before they’ll work with or rent to you. By making sure everyone they work with is insured, they’re protecting their own business finances, too.
What isn’t covered by general liability insurance for LLCs?
Here are a few examples of what general liability insurance won’t cover for your LLC and what you might need instead:
Harm to your employees. General liability insurance doesn’t cover bodily injury claims for people you employ. Instead, you’ll need a workers’ compensation policy to cover medical costs or other fees associated with workplace injury or illness.
Negligence, error or oversight. You’ll need professional liability insurance, also called errors and omissions insurance, to protect you if a client sues for erroneous or inaccurate advice or services.
Commercial vehicles. If you or your employees get in a road accident in a company vehicle, you’ll need commercial auto insurance to cover expenses associated with repairing your own or another party’s car, or to pay for medical bills in the event of bodily injury.
Harm past your maximum limit. Even if a claim falls within the scope of general liability insurance, you could still face a large bill if the claim exceeds your policy’s coverage amount. To pay that additional amount, you’ll need excess liability coverage, which kicks in after a general policy limit has been reached.
Depending on what your business does, you may need these or other kinds of LLC business insurance.
Many insurance providers bundle general liability insurance with commercial property insurance and business interruption insurance in a business owner's policy, or BOP, which can be cheaper than buying policies separately.
How much general liability insurance does your LLC need?
General liability insurance policies often have a $1 million limit, which is the maximum amount your insurer will pay out during the policy period.
Choosing lower limits might reduce your premiums, but you’ll also be at risk of insurance not covering an expensive claim against your LLC. If you need more than the maximum limit, look for business umbrella insurance, which sits on top of your general liability insurance policy and pays out if you reach the limit.
How much coverage your LLC needs varies depending on the size and scope of your company’s operations, business location, number of employees and more. If you’re unsure how much coverage is right for you, consider working with a business insurance agent near you.
How much does general liability insurance cost for LLCs?
The cost of general liability insurance varies depending on:
Your LLC’s size (number of employees and contractors).
The nature of your business.
Your location.
How much business property and equipment you own.
The number of policies you purchase.
Your annual revenue.
Coverage limits and deductibles.
The median cost of general liability insurance —for all types of businesses, not just LLCs —is $42 per month, according to small-business insurance marketplace Insureon.
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