Secure General Liability Insurance in 2025: Small and medium-sized businesses across the United States are increasing their uptake of general liability insurance this year as lawsuit frequency and settlement costs continue to climb, according to the latest industry data released this week.
Also known as commercial general liability (CGLinsurance, the policy remains the cornerstone of risk management for millions of companies, protecting them from third-party claims of bodily injury, property damage, and advertising injury. Industry reports show that the average cost of a general liability claim reached $35,000 in 2024, with legal defense expenses often adding another $50,000 or more even when cases are dismissed.
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Insurance carriers report a notable surge in applications from retail stores, contractors, restaurants, and professional service providers throughout the first three quarters of 2025. Many business owners cite rising customer expectations, higher medical costs, and an increasingly litigious environment as primary reasons for obtaining or upgrading coverage.
General liability insurance covers incidents such as a customer slipping in a store, accidental damage to client property during service calls, or allegations of slander and copyright infringement in marketing materials. The policy pays for medical bills, repair costs, settlements, and attorney fees up to the chosen policy limits, which most businesses set at $1 million per occurrence and $2 million aggregate.
Unlike workers compensation, which is legally required in nearly every state for businesses with employees, general liability insurance is not mandated by federal law. However, landlords, government agencies, and large corporate clients almost always demand proof of coverage before signing leases or contracts.
Premiums vary significantly by industry and risk profile. Low-risk office-based businesses typically pay between $400 and $800 per year, while construction firms and manufacturers often see annual costs ranging from $1,200 to $6,000. Digital-first insurers have pushed monthly payments as low as $25 for basic policies serving freelancers and home-based operations.
Experts recommend that business owners review their coverage annually and consider bundling general liability with commercial property insurance through a Business Owners Policy to achieve premium discounts of 10 to 20 percent.
With economic uncertainty persisting into the final quarter of 2025, insurance professionals stress that maintaining adequate general liability insurance allows companies to operate with confidence and protect personal assets from business-related lawsuits.
