General Liability Coverage Limit Calculator
Estimate the recommended general liability coverage limit for your business based on revenue, assets, industry risk, and business size.
Formula
Step 1 – Base Exposure:
Base Exposure = (Annual Revenue × 0.01) + (Total Assets × 0.05) + (Employees × $2,000)
Step 2 – Risk-Adjusted Exposure:
Risk-Adjusted Exposure = Base Exposure × Industry Risk Multiplier × Public Interaction Multiplier
- Low Risk (Consulting, IT): ×1.0
- Moderate Risk (Retail, Real Estate): ×1.5
- High Risk (Manufacturing, Healthcare): ×2.0
- Very High Risk (Construction, Trucking): ×2.5
- Public Interaction: ×1.2 (Yes) or ×1.0 (No)
Step 3 – Recommended Per-Occurrence Limit:
Raw Limit = max(Risk-Adjusted Exposure, Contract Minimum, $1,000,000)
Rounded up to the nearest standard tier: $1M, $2M, $3M, $5M, or $10M.
Step 4 – Aggregate Limit:
Aggregate Limit = min(Per-Occurrence Limit × 2, $10,000,000)
Assumptions & References
- The revenue factor (1%) reflects that liability exposure scales with business activity volume (Insurance Information Institute).
- The asset factor (5%) reflects the principle that businesses should carry enough coverage to protect their net worth (SBA guidelines).
- The per-employee factor ($2,000) accounts for increased premises and operations exposure with more staff (IRMI General Liability Manual).
- Industry risk multipliers are derived from ISO General Liability classification relativities and NCCI loss cost data.
- The minimum $1,000,000 per-occurrence limit reflects the standard baseline required by most commercial landlords and clients (ISO CGL form CG 00 01).
- The aggregate limit is typically set at 2× the per-occurrence limit per standard ISO CGL policy structure.
- Standard coverage tiers ($1M, $2M, $3M, $5M, $10M) reflect commonly available GL policy limits in the U.S. market.
- This calculator does not account for umbrella/excess liability, professional liability, or product liability — consult a broker for comprehensive coverage analysis.