Can I Get General Liability Insurance Without a Business License?

Running a business is exciting, but it also brings loads of responsibilities — and sometimes risks. What if a customer trips and breaks a hip inside your store? Or you ruin a very valuable vase inside a client’s home? General liability insurance (GL) is the tool you need to protect your business from financial losses connected to events like these. But what if you’re just getting started? Can you still get general liability insurance without a business license?

The short answer: Yes, you can often get GL (subject to the location of your business) without a business license. A business license is sometimes a prerequisite for business insurance, depending on your location, but that’s not always the case.

In this article, we explore what general liability insurance is, who needs it, and how you can get it — with or without a business license. We also guide you through the steps of getting a business license and discuss other types of insurance you might want to consider. If you’re a business owner or thinking of starting a consultancy, this is the article for you.

What Is General Liability Insurance?

General liability insurance is a type of business insurance that safeguards your company from financial losses from claims by third parties (meaning: not you or your employees). Whether you’re a sole proprietor, freelancer, or small business owner, GL can help protect you from unexpected costs associated with accidents or legal issues.

General liability insurance boils down to three main types of risks:

• Bodily injury. If a customer or visitor is injured on your business premises or due to your business operations, GL can cover medical expenses, legal fees, and damages you’re responsible for. For example: a customer slips and falls due to a puddle of water left on your floor.
• Property damage. If your business operations result in damage to someone else’s property, GL can cover the costs of repairs or replacements. For example: you accidentally damage a client’s home during a job.
• Reputational harm. In cases where your business is accused of slander, libel, or false advertising, GL can cover legal defense costs and potential settlements. For example: you print out marketing materials comparing your business to a competitor’s, and they decide to sue.

Who Needs General Liability Insurance?

General liability insurance isn’t just for huge corporations — it’s crucial for businesses of all shapes and sizes. Any business that interacts with clients, customers, or vendors — whether through direct services, in a store, or even online — faces potential risks that could lead to financially ruinous claims. Whether you’re a personal trainer, an online craft seller, or a restaurant owner, GL helps protect you against a bevy of liabilities. Here are a few examples of businesses that might need general liability insurance:

• Brick-and-mortar businesses. Physical locations like retail stores, restaurants, and gyms have a higher risk of customer injuries, like slip-and-fall accidents. GL helps cover medical costs, legal fees, and potential settlements in these cases.
• Service providers. Professionals like consultants, contractors, or event planners may visit clients’ homes or offices. If you or an employee accidentally damage a client’s property, general liability insurance can cover the repair or replacement costs.
• Freelancers and independent contractors. Even without a physical storefront, freelancers still face risks. For instance, a photographer working on-site at an event might need GL in case a client trips over a cable and sustains injuries.
• Home-based businesses. Many entrepreneurs run businesses from their homes, and while homeowners’ insurance typically doesn’t cover business-related incidents, GL can step in for client injuries or property damage.

Every business faces risks, so general liability insurance is an essential way to help keep your business secure, regardless of your industry. If your business involves direct interaction with customers, vendors, or even just other people’s property, GL is an invaluable tool to help safeguard against potential legal or financial troubles.

Can I Get Business Insurance Without a Business License?

The good news is that many insurance companies offer general liability insurance — and professional liability insurance — to businesses, even those without a business license. If you’re just starting out or running a side hustle, you can still get the protection you need.

That said, regulations vary by location and your line of work. Depending on where you live, you might need a business license to operate legally, especially in regulated industries like construction, real estate, accounting, or healthcare.

What is the difference between a business license & an LLC?

When opening a business and getting licensed, it’s best to consult with an attorney, even if you’re only starting a side gig. One reason why: sometimes a term or phrase is used too generally when it should be something more specific. Here are some basic things to know about licensing terms before you talk to your lawyer.

Business license: This term could be used very generally but mean one of many types of licenses that businesses get. Before assuming what you need, be sure to ask for clarification and check with your attorney.

According to the U.S. Chamber of Commerce, a business license is a permit or document that is required by a state or government entity in order to operate. Some licenses also require an exam to be passed to prove proficiency (Ex. An accountant needs to pass a CPA exam and a lawyer needs to pass the state bar).

LLC: An LLC or limited liability company is a legal way to structure a business to separate the assets and debts of the business from the personal finances of its members. This way the company can get sued for its business debts, but the owner’s personal assets are typically safe. For example, many physicians’ groups are LLCs. This helps protect the whole business if one provider’s act puts the group in financial jeopardy.

DBA: A DBA stands for “doing business as” and is a way for you to give your company a unique name, separate from your own. The U.S. Chamber of Commerce states that the most common reason business owners register a DBA for their company is when sole proprietors want to operate under a name that isn’t theirs (Ex. A tax prep business is named “April Calling”).

Another reason is when businesses want to branch out and offer more services that their current name doesn’t suggest. In the case of “April Calling, LLC,” say you want to also offer year-round bookkeeping services. A DBA would allow your registered LLC to market under a new name, such as “Tax and Bookkeeping Services 4 You.”

How to Get a Business License

An attorney can walk you through the process in your city or state, but here’s a quick overview from the state of Massachusetts:

• Choose your business structure (corporation, LLC, partnership, or sole proprietorship).
• Check that your business name doesn’t already exist.
• File with the state (unless you’re a sole proprietor or general partnership).
• Get a business certificate (DBA) unless using your legal name.
• Get an EIN or federal tax ID number.
• Check the Small Business Administration to see whether your industry has any special requirements.

How to Get Liability Insurance for Your Business

First, you’ll want to assess how much coverage you need based on your industry, business size, and the risks you face. Once you figure out these limits of liability, you can start shopping around for quotes. You can buy directly from a provider like Berxi or use a broker to compare policies. Just keep in mind that buying directly will often save you money.

When comparing policies, you may want to examine coverage limits, exclusions, and premiums. Your premium can depend on factors like your business size, location, industry, and whether you’ve had any claims in the past.

Once you find a policy that fits your needs and budget, be sure to review it regularly and keep track of your renewal dates so your coverage doesn’t lapse.

What Other Types of Insurance Does My Business Need?

While general liability insurance covers risks your business faces, you may also need other types of coverage for full protection. What kind of coverage you need will entirely depend on your line of work and the risks that come with it. Here are a few other important types of business insurance to consider:

• Professional liability insurance (errors & omissions or medical malpractice). Protects against claims of negligence or mistakes in the services you provide. It’s especially important for any small business giving advice. This includes consultants, financial advisors, tax professionals, graphic designers, real estate brokers, and psychologists to name a few.
• Commercial property insurance. Covers damage to property, including buildings and inventory if you own or rent commercial space. Covered events include fire, theft, or natural disasters.
• Workers’ compensation. Generally required if you have employees, it covers medical expenses and wages for job-related injuries.
• Commercial auto insurance. Helps protect against liability and damage from work-related driving accidents in vehicles owned or used by the business. Personal auto policies won’t cover these liabilities.

Of course, if you don’t have employees and don’t use a car for work purposes, you won’t need coverage in those instances. But ensuring you have the right combination of policies is crucial to making sure you’re not putting your business at unnecessary risk.

Get the Right Coverage for Your Business with Berxi

Whether you’re a web developer, yoga instructor, or an accountant, having the right insurance coverage is essential to protecting your business. Berxi can help you find the general liability insurance — and other types of coverage — that fits your business needs. By purchasing directly from Berxi, you can even save up to 15% without sacrificing on coverage.

Berxi offers a streamlined process for getting the insurance you need, whether you’re just starting out or looking to expand your coverage. The right combination of policies lets you focus on growing your business with the peace of mind that you’re covered in case the unexpected happens.

Ready to get started? Explore Berxi’s insurance products and find the coverage that’s right for your business today.

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The views expressed in this article are those of the author and do not necessarily reflect those of Berxi™ or Berkshire Hathaway Specialty Insurance Company. This article (subject to change without notice) is for informational purposes only, and does not constitute professional advice. Click here to read our full disclaimer