Next Insurance reported that 82% of first-year businesses had insurance, compared with 67% of businesses operating for two to five years.
There needs to be more. According to the U.S. Census Bureau via Finder, 5.63 million new business applications were submitted in 2025. So many people have decided to take the leap and open a new business, and one insurance policy in particular is essential before opening the doors.
Even if you don’t want to use it, an insurance policy gives you a financial safety net if something goes wrong, and general liability insurance is one of the most essential. Read on to find out why.
Taking Out a General Liability Policy Before Opening Day
Start by researching insurance while you’re preparing for the launch. If you’re reading this, you’re likely before launch day, so you still have time to spend an hour or two learning about the first policies you should take out, including general liability.
General liability protects you against:
- Slip-and-fall injuries
- Property damage
- Legal fees and defense costs
- Medical payments
- Other common business accidents
Essentially, if your business is involved in any third-party injuries, property damage, or personal or advertising injury claims, general liability can provide a financial fallback. As a new business, you probably don’t have that financial fallback without insurance.
Ideally, you want coverage before exposing customers, visitors, or other third parties to business-related risks because that’s technically when the risk begins.
Understand The Risks Associated With Your Business
Understand the risks associated with your type of business before you take out a policy. If you’re opening a retail store with regular customer foot traffic, you’ll face more different risk exposures than if you’re an online business or consultant.
When you take out a policy, insurers will consider the industry you’re operating in and its risk when quoting a premium. They’ll also want to know where you’re located and may ask for your estimated revenue and the number of employees you’re starting with.
You can also use this time to compare policies based on coverage and exclusions, such as bodily injury coverage and any inclusions relevant to bodily injury, such as whether it’s proven that you purposely or intentionally inflicted injury or harm on someone.
The Benefits of General Liability Insurance for New Businesses
There are so many potential benefits to taking out a commercial general liability policy.
- Covers certain accidental damage to other people’s property
- Protects against third-party bodily injury claims
- Helps manage legal defense expenses
- Protects against certain advertising-related claims
- Can protect against certain product-related liabilities
- Helps protect limited startup funds
- Makes it easier to meet commercial requirements
Always check exactly what your policy covers before assuming everything. General liability is extensive, but it won’t cover every risk or scenario.
Taking out a general liability policy can take minutes online, but it can save you thousands. It gives you the peace of mind that once you open the door, if something happens that could result in a claim against you for injury or damage to customers, you’re covered.
