Million dollar liability policy cost is often the first number owners look up when a landlord, client, or general contractor says, “Send me proof of $1 million in coverage.” The good news is that this coverage costs less than most people expect. Insureon reports its small-business customers pay about $42 a month, or roughly $500 a year, for a $1 million general liability policy.
However, that is an average across many low-risk businesses. A roofer will pay far more than a bookkeeper. This guide explains what “a million dollars” really means on a policy, what different trades typically pay, and how to keep your premium fair without cutting coverage you need.
What a “Million Dollar” Policy Actually Covers
Most “million dollar” policies are general liability insurance. General liability pays for injuries to other people and damage to their property caused by your business. For example, a customer trips on a cord in your shop, or your painter spills on a client’s new floor. It also typically covers some advertising injury, like an accidental copyright claim.
The standard setup is written as “$1M/$2M.” The first number is the per-occurrence limit. That is the most the insurer pays for one claim. The second number is the aggregate limit. That is the most it pays for all claims during the policy year. In most cases, when someone asks for “a million dollar policy,” this $1M/$2M structure is what they mean.
A $1 million policy does not cover everything. It typically excludes injuries to your own workers, which fall under workers’ comp. It also excludes car accidents, which need commercial auto. Mistakes in professional advice need professional liability, also called errors and omissions (E&O). As a result, your total insurance bill may include more than one policy.
Million Dollar Liability Policy Cost by Trade
Your trade is the biggest driver of million dollar liability policy cost. Insurers price by risk. Work on roofs, ladders, or job sites leads to more and bigger claims. Office work leads to fewer. As a result, two businesses with the same $1M/$2M limits can pay very different premiums.
The figures below come from Insureon and TechInsurance customer data. They are averages, not quotes. Your price will depend on your state, revenue, payroll, and claims history.
| Business type | Typical monthly premium | Approximate yearly premium |
|---|---|---|
| All small businesses (Insureon average) | $42 | $500 |
| Tech and IT businesses (TechInsurance average) | $45 | $542 |
| Locksmiths | $42 | $500 |
| Electricians | $57–$61 | $684–$732 |
| Contractors (overall average) | $83 | $990 |
| General contractors | $162 | $1,944 |
| Roofers | $267–$317 | $3,204–$3,804 |
TechInsurance reports that $1 million limits range from about $260 to $3,000 a year across its customers. For example, a freelance web designer in Ohio may sit near the bottom of that range. A Florida roofing crew may pay more than the top of it. Doubling your limits usually does not double the price. TechInsurance data shows a $2M/$4M policy averaging about $46 a month for its customers.
Other factors move the price, too. Higher revenue and more employees typically raise premiums. Past claims raise them sharply. A higher deductible can lower them. In most cases, a clean three-year claims record is one of the best price breaks you can earn.
How to Get a Fair Million Dollar Liability Policy Cost
Start by confirming what limits you actually need. Read your lease, client contract, or bid documents. Many contracts require $1M per occurrence and $2M aggregate. Some also require you to list them as an “additional insured.” That means the client gets coverage under your policy for claims tied to your work. Adding them may cost a small fee or be free, depending on the carrier.
Next, look at a business owner’s policy, or BOP. A BOP bundles general liability with commercial property coverage. For many small shops, offices, and retailers, a BOP costs only a little more than liability alone. However, high-risk trades like roofing often do not qualify for a BOP.
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Then get at least three quotes. Use an independent agent who can shop several carriers, not just one. Describe your work accurately. Calling a roofing business “general handyman” to lower the price can backfire. The insurer may deny a claim if your real work does not match your application.
Finally, ask about payment terms. Paying the full year upfront often costs less than monthly payments. Also ask how fast you can get a certificate of insurance (COI). Many online carriers issue a COI the same day. As a result, you can usually meet a client’s deadline without delay.
Frequently Asked Questions
How much is a million dollar liability policy per month?
In most cases, low-risk small businesses pay about $30 to $60 a month. Insureon reports an average of about $42 a month. However, million dollar liability policy cost for high-risk trades like roofing can run $250 a month or more.
Is $1 million in liability coverage enough for my business?
Many small businesses carry $1M/$2M limits because that is what most contracts require. However, larger projects or high-risk work may call for more. For example, some commercial clients require an umbrella policy on top. Confirm your needs with a licensed agent and read your contracts closely.
Why is my quote higher than the average million dollar liability policy cost?
Averages blend many low-risk businesses together. Typically, a higher quote reflects your trade, revenue, location, or past claims. As a result, comparing quotes from several carriers is the best way to know whether your million dollar liability policy cost is fair for your situation.
Find Where You Stand
Your real price depends on your trade, your state, your revenue, and your claims history. Get a neutral estimate first — no email, no quote gate — then compare quotes when you are ready.
Sources & How to Verify
This guide is built from official government and industry sources. Insurance requirements, premiums, and state rules change, so always confirm the exact figure with your state, a licensed agent, or the authority source:
- U.S. Small Business Administration: sba.gov — federal small-business insurance guidance
- Insurance Information Institute: iii.org — neutral premium and coverage data
- NAIC: naic.org — state insurance regulation data
- U.S. Department of Labor: dol.gov — workers’ compensation overview
- Your state DOI, workers’ comp board, DMV/DOT, and contractor-licensing board for the exact current requirement and figures.
Verified October 2026. Insurance figures change — if you spot anything outdated, please contact us.
Related Guides
- Business Insurance by Profession
- Workers’ Comp Requirements by State
- Business Insurance Requirements by State
- What Business Insurance Really Costs
- Plain-English Business Insurance Glossary
Disclaimer. This page is for general information only and is not insurance, legal, or tax advice. Business Insure Guide is an independent educational resource, not an insurance agency, carrier, law firm, or tax advisor. Coverage needs, requirements, premiums, and rules vary by business, profession, and state, and change over time. For your specific situation, verify the exact coverage, requirement, and price with a licensed insurance agent and your state before you buy.