A $1 million general liability policy is the most common piece of business insurance in the United States, and for a small business it costs far less than the headline number suggests. The premium buys a promise to pay up to $1 million on a single claim, and the great majority of small businesses never come close to using it, which is exactly why the promise is cheap. What you pay is set by your trade, your headcount, your state and the limits you pick, in roughly that order. This guide puts a number on each of those.
What “$1 million / $2 million” actually means
Every general liability policy carries two limits, and the shorthand “$1M/$2M” names both. The first is the per-occurrence limit: the most the insurer pays for any one incident, whether that is a customer who trips over your extension cord or a water leak you caused in a client’s ceiling. The second is the aggregate limit: the most the insurer pays in total across every claim during the policy year. Once either number is used up, the policy has done its job and pays no more.
The aggregate is usually set at twice the per-occurrence figure so that one bad year with two or three claims does not leave you uninsured for the rest of it. On the standard small business form, the cost of defending a claim is paid on top of these limits rather than out of them, so the full $1 million is available for damages. Contracts, leases and client onboarding forms nearly always quote the per-occurrence number, which is why “$1 million in liability” has become the phrase everyone uses.
How much does $1 million liability insurance cost per month?
Nationally, a $1M/$2M general liability policy costs a median of $45 a month, or $542 a year, among Insureon’s small business customers, and 85% of them choose this limit. The table below shows what is published for each limit.
| Liability limit | Median monthly | Median annual | Who picks it |
|---|---|---|---|
| $500K per occurrence / $1M aggregate | Not published | Not published | Sole operators with no contracts that specify a limit. Many clients and landlords will not accept it. |
| $1M per occurrence / $2M aggregate (standard) | $45/mo (22% pay under $30, 63% under $60) | $542/yr | The default, chosen by 85% of Insureon’s customers. What most contracts, leases and certificates ask for. |
| $2M per occurrence / $4M aggregate | $46/mo | $553/yr | Chosen by 8%. Businesses working for general contractors, municipalities or large property managers whose contracts call for $2 million. |
| $1M/$2M plus a $1M umbrella | Not published | Not published | Businesses that also carry commercial auto or employer’s liability and want one extra layer over all of them. |
Insureon’s published general liability medians for its small business customers, national, trade not specified. No source publishes a price for $500K limits or umbrellas. Estimates from Insureon’s published medians, not quotes.
Two things stand out. No source publishes a price for $500K, and dropping to it costs you eligibility for most commercial work, so it is rarely worth doing. Going up to $2 million moves the median by about a dollar, a long way from doubling the premium, though the 8% who choose it are a different group of businesses. The reason is explained below.
$1M/$2M general liability cost by trade
Trade is the single biggest lever. A consultant who visits clients a few times a month presents a fraction of the injury exposure of a roofer, and the rate reflects that. The table shows Insureon’s published general liability median for each business type and the range our estimator shows for a business of two to five people. No source publishes $2M/$4M prices by trade.
| Trade | Median monthly | Estimated range, monthly | Estimated range, annual |
|---|---|---|---|
| Consulting / professional services | $32/mo | $21–$43/mo | $252–$516/yr |
| IT / software development | $37/mo | $25–$49/mo | $300–$588/yr |
| Marketing consulting | $30/mo | $20–$40/mo | $240–$480/yr |
| Accounting / bookkeeping | $30/mo | $20–$40/mo | $240–$480/yr |
| Real estate agents | $33/mo | $22–$44/mo | $264–$528/yr |
| Retail store | $42/mo | $28–$56/mo | $336–$672/yr |
| Personal training / fitness | $29/mo | $19–$39/mo | $228–$468/yr |
| Cleaning / janitorial | $48/mo | $32–$64/mo | $384–$768/yr |
| Landscaping / lawn care | $51/mo | $34–$68/mo | $408–$816/yr |
| Handyman | $81/mo | $54–$108/mo | $648–$1,296/yr |
| Restaurant | $141/mo | $94–$188/mo | $1,128–$2,256/yr |
| General contractor | $162/mo | $108–$216/mo | $1,296–$2,592/yr |
Estimates from Insureon’s published general liability medians for each business type, national, business of two to five people. No source publishes $2M/$4M prices by trade. Not quotes.
The pattern is simple: the more time you spend on other people’s premises, the more the public passes through yours, and the more physical the work, the higher the class. Our guide to the average cost of general liability insurance goes through the full list of trades.
Cost by business size
Insurers use headcount and revenue as a stand-in for hours of exposure. More people on more sites means more chances for someone to get hurt or something to get broken, so the same $1M/$2M policy costs more as the business grows. No source publishes general liability prices by headcount, so the table below only shows which part of the national band our estimator uses for each size.
| Business size | $1M/$2M monthly | $1M/$2M annual |
|---|---|---|
| Just me, under $100k revenue | $30–$45/mo | $360–$540/yr |
| 2–5 people | $30–$60/mo | $360–$720/yr |
| 6 or more people, or $500k+ revenue | $45–$60/mo, possibly more | $540–$720/yr, possibly more |
Estimates from Insureon’s published medians for $1M/$2M general liability, national, trade not specified. Size only picks the lower or upper half of the published band; no source publishes prices by headcount. Not quotes.
Cost in selected states
The same policy for the same business does not cost the same everywhere. States with a heavy litigation calendar, large jury awards and frequent claims price higher; quieter states price lower. Insureon’s published state medians run from $40 a month in Illinois to $59 in Maine.
| State | Median monthly | Estimated range, monthly | Estimated range, annual |
|---|---|---|---|
| Florida | $55/mo | $37–$73/mo | $444–$876/yr |
| Louisiana | $49/mo | $33–$65/mo | $396–$780/yr |
| North Dakota | $49/mo | $33–$65/mo | $396–$780/yr |
| Georgia | $47/mo | $31–$63/mo | $372–$756/yr |
| New York | $44/mo | $29–$59/mo | $348–$708/yr |
| Texas | $43/mo | $29–$57/mo | $348–$684/yr |
| California | $42/mo | $28–$56/mo | $336–$672/yr |
| Ohio | $42/mo | $28–$56/mo | $336–$672/yr |
| Illinois | $40/mo | $27–$53/mo | $324–$636/yr |
Estimates from Insureon’s published general liability medians for each state, trade not specified, business of two to five people. Not quotes.
All fifty states, and the same comparison for E&O and a business owner’s policy, are in our guide to average business insurance cost by state.
Why $1 million is the number everyone asks for
Contracts, commercial leases and client onboarding forms ask for $1 million per occurrence because it has been the standard figure on American commercial paperwork for decades, and nobody drafting a new contract wants to be the one who asked for less. The request usually arrives in two parts. First, a certificate of insurance: a one-page summary your insurer or agent issues showing the carrier, the policy number, the limits and the dates. Second, additional insured status, which is an endorsement on your policy that extends your coverage to the client or landlord for claims arising from your work on their premises.
Both are routine. Most carriers writing small business liability include a blanket additional insured endorsement or add one for a small charge, and certificates are generated on request. The point of the $1 million figure is not that a claim of that size is likely; it is that the person hiring you wants a policy large enough that a serious injury on their site never reaches their own insurance. If you plan to do any commercial work, price the $1M/$2M policy from the start rather than the $500K one.
When $2 million or an umbrella makes sense
Move to $2 million when a contract names it, when you work on high-value property such as occupied commercial buildings or finished residential interiors, or when you regularly have several people on a client’s site at once. General contractors, municipal work and large property management companies are the usual sources of a $2 million requirement.
Going from $1 million to $2 million costs far less than double because of where claims actually land. Nearly all liability claims against a small business settle well under $1 million, so the first million carries almost all of the risk and almost all of the premium. The second million only pays on the rare claim that clears the first, and insurers price it as the thin layer it is. Insureon’s figures fit that: a median of $46 a month for $2M/$4M against $45 for $1M/$2M.
An umbrella is a different product. It is a separate policy that sits above your general liability and, usually, your commercial auto and employer’s liability too, adding $1 million or more across all of them at once. Because it is its own policy with its own minimum premium, it usually costs more than simply raising the general liability limit, though no source we use publishes umbrella prices. The umbrella earns its keep when a contract requires one by name, or when you have vehicles and employees and want one extra layer over everything. If all you need is a bigger general liability limit, raise the general liability limit.
How to lower the premium
- Get the class code right. A consultant rated as a contractor pays a contractor’s rate. Describe the work you actually do and nothing you do not.
- Pay annually if you can. Most carriers charge a fee on monthly instalments. One payment a year removes it.
- Bundle if you own equipment. A business owner’s policy combines general liability with property cover on your own kit, usually for less than buying the two apart. Our guide to general liability vs professional liability vs BOP explains when each fits.
- Report revenue accurately. Premiums are audited against actual figures. Overstating revenue at quote time costs money; understating it costs more at audit.
- Keep the claims record clean. A claim-free history is the strongest single argument for a lower rate at renewal.
- Compare more than one carrier. The same coverage for the same business can cost noticeably more at one insurer than another. Two or three quotes is enough to see where you sit.
- Do not overbuy. If nobody has asked you for $2 million, $1M/$2M is the right place to start. You can raise limits at renewal or mid-term when a contract requires it.
Where these numbers come from
The figures on this page are Insureon’s published medians for its small business customers: $45 a month for $1M/$2M general liability and $46 for $2M/$4M. The ranges start from Insureon’s published median for each business type and adjust it for the state, the same way our small business insurance cost calculator does, so the two agree. No source publishes prices for $500K limits, umbrellas or by headcount, so this page does not price them. See our guides to how much small business insurance costs and the average business liability insurance cost for the full method.
Hiscox advertised starting prices
Hiscox advertises general liability from about $29 a month, professional liability (E&O) from $22.50 a month and a business owner’s policy from about $42 a month. Against the medians above, those are entry prices for the lowest-risk trades, so treat them as a floor rather than a forecast: a consultant or IT business in a lower-cost state may land near them, while trades with more time on other people’s premises will pay more. As with any insurer, the limits you choose change the price.
Frequently asked questions
How much is $1 million in liability insurance per month?
Insureon’s small business customers pay a median of $45 a month for a $1 million per occurrence, $2 million aggregate general liability policy, or $542 a year; 22% pay under $30 and 63% under $60. Low-risk office businesses such as consultants and accountants have published medians of $30 to $32 a month, general contractors $162.
What does 1 million / 2 million mean on a liability policy?
The first number is the per-occurrence limit: the most the policy pays for any single claim. The second is the aggregate limit: the most it pays in total across every claim in one policy year. A $1M/$2M policy pays up to $1 million on one incident and up to $2 million across the whole year, and then stops.
How much does $2 million general liability insurance cost?
Insureon’s customers who choose a $2 million per occurrence, $4 million aggregate policy pay a median of $46 a month, or $553 a year, against $45 for $1M/$2M. Only 8% choose it, so they are a different group of businesses, but it is nowhere near double, because claims that exceed $1 million are rare and the second million is priced as a thin extra layer.
Is $1 million in liability insurance enough for a small business?
For most small service businesses, yes. $1 million per occurrence is what standard contracts, commercial leases and client certificates ask for, and it covers the great majority of injury and property damage claims a small business faces. Move to $2 million or add an umbrella when a contract requires it, when you work on high-value property, or when you carry vehicles and employees and want one extra layer over all of them.
Does a $1 million policy cost the same in every state?
No. Insureon’s published general liability medians run from $40 a month in Illinois to $59 in Maine, with Florida at $55, Georgia at $47, New York at $44, Texas at $43 and California at $42. Litigation climate, jury awards and claim frequency set the state rate; your trade and size then move you within it.
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