$1 Million Liability Insurance Cost for Small Business (2026)
A $1 million per occurrence and $2 million aggregate general liability policy is the de facto small-business standard. Cost runs $35 to $200 per month for most operations, with industry as the largest variable. The tier is so widely accepted in commercial leases, GC subcontracts, marketplace seller terms, and venue COI demands that going below it forecloses contracts and going above it usually adds little practical value for most small operations.
Typical cost by industry
$1M / $2M is the dominant small-business tier and pricing varies primarily by industry. Lower-risk services (consultants, IT, photographers) sit at the bottom of the range. Hospitality and service businesses with customer foot traffic sit in the middle. Trades and contractors sit at the top because of the higher per-incident severity and on-site exposure profile. Ranges below assume one to five staff, $250,000 to $750,000 of revenue, and a clean three-year claims record.
| Industry | Monthly range | Annual range |
|---|---|---|
| Solo consultant or freelancer | $35 to $55 | $420 to $660 |
| IT services or MSP (small) | $35 to $75 | $420 to $900 |
| Photographer or videographer | $30 to $65 | $360 to $780 |
| Retail (brick and mortar, low risk) | $50 to $115 | $600 to $1,380 |
| Cleaning or janitorial | $45 to $165 | $540 to $2,000 |
| Restaurant | $75 to $180 | $900 to $2,200 |
| Trucking (premises) | $65 to $200 | $800 to $2,500 |
| General contractor | $100 to $375 | $1,200 to $4,500 |
| Roofing contractor | $165 to $500 | $2,000 to $6,000 |
Why $1M / $2M is the de facto standard
Three reasons the tier became the small-business default and stays there. Each is worth understanding because each shapes how to think about going above or below the tier.
Contract acceptance is essentially universal
Almost every commercial lease, GC subcontractor agreement, marketplace seller term, wedding or event venue COI demand, and state contractor license requirement either requires $1M minimum or accepts it as the standard. Amazon Business Solutions Agreement requires $1M for FBA sellers above $10k monthly revenue. Walmart Marketplace requires $1M. Most state contractor licensing boards accept $1M well above their statutory minimums. Most commercial leases require $1M with the landlord named as additional insured. The tier closes COI demands without negotiation.
Pricing is the natural plateau
The marginal cost from $500k to $1M is small (typically $60 to $180 per year for most operations). The marginal cost from $1M to $2M is much larger ($300 to $900 per year for most operations). This makes $1M the price-per-dollar-of-coverage sweet spot for the small-business pool. Operators who need more than $1M typically structure with an umbrella rather than direct-buying higher GL because the umbrella math is more efficient.
Aggregate structure handles realistic multi-claim years
The standard $1M / $2M structure provides $1M of per-occurrence capacity and $2M of total-year capacity. For most small operations, this handles realistic multi-claim scenarios. The exceptions are high-frequency claim industries (commercial cleaning, restaurants, urgent care, daycares) where the aggregate can be tight in a bad year; these operations sometimes upgrade to $1M / $3M or pair with an umbrella.
What $1M / $2M satisfies
The table below summarises typical contract and licensing requirements that the standard tier handles cleanly. For most working operations, this list covers essentially all the contract-COI demands they will encounter.
| Contract or requirement | Acceptance with $1M / $2M |
|---|---|
| Commercial office or retail lease | Almost always satisfied |
| Wedding or event venue COI | Almost always satisfied |
| GC subcontractor agreement (residential, light commercial) | Almost always satisfied |
| Amazon FBA seller above $10k / month | Always satisfied |
| Walmart Marketplace seller | Always satisfied |
| State contractor license (CA, FL, NC, etc.) | Always satisfied (well above statutory minimum) |
| Mid-commercial GC subcontract ($1M+ project) | Sometimes requires upgrade to $2M / $4M |
| Public / municipal contract | Often requires upgrade to $2M / $4M plus umbrella |
| Federal contract | Sometimes accepted, often requires $2M / $5M plus umbrella |
Aggregate structure choices
$1M policies are commonly written in four different aggregate structures. The structure determines how much coverage remains after a single claim is paid and how the policy responds to multi-claim years. Ask the carrier explicitly which structure they are quoting before binding.
| Structure | What it means | Typical use |
|---|---|---|
| $1M / $2M (standard) | Per-occurrence $1M, aggregate $2M | Most common structure |
| $1M / $1M (single aggregate) | Per-occurrence and aggregate the same | Cheapest, but exhausted by single max claim |
| $1M / $3M (high aggregate) | Per-occurrence $1M, aggregate $3M | Multi-claim industries (cleaning, restaurants) |
| $1M occurrence + $1M umbrella | Two layers of $1M | Often cheaper than $2M direct, satisfies most $2M demands |
Industry-specific cost detail
Industry is the single largest cost driver inside the $1M / $2M tier. The detail pages below walk through cost ranges, common claim scenarios, and adjacent coverages for the most common small-business categories. Operators in any of these categories will find more granular pricing detail and typical claim ranges on the dedicated page.
Service and professional industries
Consultants, IT services, photographers, accountants, and similar low-premises-exposure operations sit at the bottom of the $1M / $2M cost range. The GL exposure is genuinely small for these operations and pricing reflects it. The bigger insurance line for most of these is professional liability, not GL.
Customer-facing service industries
Salons, spas, fitness studios, and similar industries with customer foot traffic sit in the middle of the range. Slip-and-fall, equipment-incident, and on-site bodily-injury claims drive the rating. Most operations in this group bundle GL with professional liability for practitioners and property for equipment.
Trades and contractors
Electricians, plumbers, HVAC contractors, painters, carpenters, and general contractors sit at the top of the $1M / $2M tier because of the elevated on-site exposure and the latent-claim profile of completed-operations coverage. Many move up to $1M / $2M plus an umbrella once they take on commercial or public-project work.