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What Is General Liability Insurance for LLCs?
When you started your business, you may have completed an “Articles of Organization” to set up a limited liability company (LLC). Forming an LLC separates your personal assets from your business. However, your company still faces risks and claims that can come up during normal operations. That’s where general liability insurance can help.
It helps cover claims that your LLC caused:
- Bodily injuries
- Property damage
- Reputational harm
- Personal injury
General liability insurance for LLCs is a type of liability insurance that should be a part of your business’ protection plan. Without it, you’d have to pay for claims out of pocket, which many businesses don’t have the resources to do.
Does an LLC Require Liability Insurance?
Many small business owners have questions about business liability insurance, like, “When is liability insurance needed?” States don’t require LLCs to carry general liability insurance. Although it’s not required by law, this type of liability coverage is important to have to help protect your business from everyday risks.
How Much Does General Liability Insurance for LLCs Cost?
Our customers pay an average of $805 a year for general liability insurance. This works out to about $67 a month for coverage.1 But be aware that general liability insurance for LLCs varies because every company is unique. Insurance companies look at several factors when determining general liability insurance costs. This can include:
- Exposure to risk: Your rate can increase if your business faces high risks.
- Location: If you run your business in an area that’s more prone to weather damage, vandalism or theft, it can increase your insurance cost.
- Years in business: The longer you’ve been in business, the more experience you have. This can lower your insurance rate.
- Type of business: Certain businesses have higher rates because of the type of work done. For example, a contractor likely has a higher insurance cost than an accounting firm.
- Policy details: Deductibles and coverage limits can impact how much your LLC pays for insurance.
The best way to know what your LLC will pay for general liability insurance coverage is to get a quote.
What Does LLC Liability Insurance Cover?
LLC liability insurance covers your business in the event of a claim that can come up during normal business operation. It can help cover claims that your LLC caused:
- Bodily injury to someone else, like a customer slipping in your business
- Property damage to another person’s belongings
- Reputational harm, also known as personal injury, resulting from something you said about another person or business
What Doesn’t LLC Insurance Cover?
Be aware that LLC liability insurance doesn’t cover every kind of claim. You may need to get other types of insurance to help protect your LLC. General liability insurance won’t help your business with claims of:
- Employee injuries or illnesses resulting from their work. Workers’ compensation insurance can give your employees benefits to help them recover from work-related injuries or illnesses.
- Mistakes in your professional services that caused a client to suffer financial damages. Professional liability insurance can help cover your costs to defend your businesses and pay for settlements and judgments awarded. This coverage is also known as errors and omissions insurance.
- Injury or property damage from an auto accident that you or an employee caused while driving a company-owned vehicle for business. Commercial auto insurance can help protect you and your employees on the road.
- Damaged business equipment from fire, theft or wind. Commercial property insurance can help protect your owned or rented building, tools and equipment you need to operate.
Common Questions About General Liability Insurance for LLCs
Is an LLC the Same as Having Insurance?
No, an LLC is not the same as having insurance. Although an LLC separates your personal assets from your business, your company still faces risks. Without insurance, you’d have to pay for claims and lawsuits out of pocket, which can get expensive. It’s why general liability insurance for LLCs and having other types of coverage is essential in running a successful business.
Who Is an Insured in an LLC?
An insured in an LLC is the person, business or entity named on an insurance policy. For LLC liability insurance, the insured would be the name of the business. This means that if there are covered claims against the LLC, an insurance company would provide coverage.
Should You Get General Liability Insurance for Your LLC?
It’s a good idea to get general liability insurance for your LLC. It helps cover claims that can come up during regular business operations, like bodily injury or property damage. Having general liability insurance for your LLC can give you peace of mind and let you focus on running your business.
Get a Quote for General Liability Insurance for LLCs
Not all insurance companies are the same. We have more than 200 years of experience in helping small businesses get the protection they need. We’re here to help you every step of the way. Whether you need general liability insurance coverage, want to request a certificate of insurance or need help filing a claim, we’ve got your back.
Talk to an insurance agent or get an online quote today and see how we can help protect your LLC.
Last Updated: November 20, 2023
1 Premium amounts presented are based on monthly premium paid by The Hartford's Small Business customers between 1/1/22 and 9/14/23 for 12-month policies. Premium is derived from a number of factors specific to your business and may vary.
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