General liability, professional liability, BOP — what small businesses actually pay
| Coverage | Protects against | Est. annual | Who needs it |
|---|
Small-business insurance is a stack of narrowly-scoped policies, and buying it well means knowing which layers your actual risks — and your actual contracts — require. The core three: general liability (the slip-and-fall/property-damage layer every lease and client contract demands), professional liability/E&O (the your-work-caused-a-loss layer for anyone selling expertise), and the BOP bundle that adds property coverage cheaply. This estimator benchmarks all three by industry and revenue, so quotes land on a calibrated ear.
| Policy | Typical small-biz premium | The claim it exists for |
|---|---|---|
| General liability ($1M/$2M) | $400–1,500/yr (office) — $2,000–6,000 (trades) | Client trips over your laptop bag; your crew damages a client's floor; a competitor claims your ad disparaged them |
| Professional liability (E&O) | $600–2,500/yr | Your deliverable had an error that cost the client money; you missed a deadline that sank their launch |
| BOP (GL + property + interruption) | GL price + $150–800 | The fire that takes your equipment AND your revenue while you rebuild |
| Commercial auto | $1,500–3,000/vehicle | Any vehicle used for work — personal auto policies exclude business use beyond commuting |
Most small businesses buy GL not from risk analysis but because a contract demands a certificate of insurance — landlords, GCs, enterprise clients and event venues all require $1M/$2M proof, often naming them as "additional insured." Modern online carriers issue COIs instantly and sell by-the-month or even by-the-job policies — a legitimate way for occasional contractors to satisfy requirements without year-round premiums. The Freelance Rate Calculator treats these premiums as the overhead they are.
An LLC shields your personal assets from business debts — it does nothing to stop the business being sued, its assets drained, or you being named personally for your own professional negligence (which pierces every veil). The entity and the insurance solve different problems; established businesses carry both, plus an umbrella above ~$1M of exposure.
Legally, rarely; contractually, almost certainly — enterprise clients require $1M GL + E&O certificates before onboarding. And a single client alleging your work cost them $200k makes E&O's $900/yr look different. Risk-based need scales with what your errors could cost others.
GL covers BODILY injury and PROPERTY damage (physical world); E&O covers FINANCIAL harm from your professional work (advice, code, designs, filings). A web developer whose laptop bag trips a client needs GL; whose bug takes down the client's store needs E&O.
$1M per occurrence (any single claim), $2M aggregate (the policy year's total). It's the standard contract requirement; higher limits via commercial umbrella cost surprisingly little ($400-900/yr per additional $1M).
Fully — business insurance is an ordinary Schedule C/business expense (see the Schedule C tool). After tax, that $800 GL policy costs a 22%-bracket freelancer ~$500.
GL/WC policies are priced on ESTIMATED revenue/payroll, then audited: grow past your estimate and you owe additional premium retroactively. Estimate honestly and report mid-year jumps — audit bills sting worse.
Occurrence-based GL: cancelling creates gaps for later-discovered claims. E&O is usually claims-made — cancelling ends coverage for past work unless you buy tail coverage. Seasonal businesses should ask about by-the-month carriers rather than lapsing.
Yes — every figure computes locally in your browser.
Buy the layers your contracts and physics actually demand — GL for the world, E&O for your work, BOP if you own stuff — at three competing quotes. It's overhead; price it like the utility bill it is, and deduct every dollar.