If you run an IT or technology services business, you've probably heard that you need general liability insurance. But here's what most tech professionals don't realize: general liability isn't about protecting you from coding errors or data breaches. It covers the everyday physical risks that come with running any business—whether you're a solo consultant working from home or managing a team of developers in a shared office space.
Think about it this way: What happens if a client trips over equipment cables during an on-site installation? Or if you accidentally spill coffee on a customer's laptop during a consultation meeting? These aren't hypothetical scenarios—they're real claims that general liability insurance handles every day. And if you need to provide a certificate of insurance to a client or landlord before they'll work with you, general liability is usually what they're asking for.
What General Liability Actually Covers for IT Businesses
General liability insurance protects your technology business against claims for bodily injury and property damage that occur on your premises or as a result of your business operations. It also covers legal defense costs—including attorney fees, court costs, settlements, and judgments—even if the lawsuit turns out to be groundless.
The coverage breaks down into three main areas. First, bodily injury claims cover medical expenses and legal costs if someone (who isn't your employee) gets hurt because of your business activities. Common examples include a delivery person slipping on an icy driveway at your home office, a client's chair breaking in your office waiting area, or an elderly customer tripping while you walk them out after a consultation.
Second, property damage coverage handles situations where you or your employees accidentally damage someone else's property. Picture this: you're meeting a client at a coffee shop to review software updates, and you knock over your full coffee onto their laptop. Or your technician damages client property while installing hardware at their office. These everyday accidents can result in expensive replacement costs, and your general liability policy steps in to cover them.
Third, general liability provides protection against advertising injury claims, including alleged slander, libel, and copyright or brand infringement in your marketing materials. While less common for IT services businesses, this coverage can be valuable if a competitor claims your advertising unfairly disparages their services.
What General Liability Doesn't Cover (And Why That Matters)
Here's where it gets important for tech professionals: standard general liability policies specifically exclude losses resulting from professional services and electronic data. If a client claims your software caused them financial loss, or a data breach exposed their customer information, general liability won't cover it. Those risks require professional liability insurance (also called tech errors and omissions or E&O) and cyber liability coverage.
General liability also doesn't cover injuries to your own employees—that's what workers' compensation insurance handles. And it won't pay to replace your own business property if it's damaged or stolen; you'd need commercial property insurance for that. Most IT businesses end up carrying a combination of coverage types because each one protects against different risks. Think of general liability as your foundation policy, not your complete insurance program.
Typical Coverage Limits for IT Services Companies
General liability limits follow a standard structure: per-occurrence limits and aggregate limits. The per-occurrence limit is the maximum your insurer will pay for a single claim, while the aggregate limit is the total amount they'll pay for all claims during your policy period (usually one year).
Nearly 90% of technology companies choose a $1 million per-occurrence limit with a $2 million aggregate limit. This is often written as $1M/$2M in insurance shorthand. For technology businesses, these limits typically range from $1 million to $2 million per occurrence, with the aggregate usually double the per-occurrence amount. These limits have become the industry standard because they satisfy most client contract requirements and provide solid protection for small to medium-sized IT operations.
You might need higher limits if you work with large enterprise clients, have significant foot traffic at your office, or operate in a high-risk environment. Some contracts specifically require $2 million per occurrence or higher. Your insurance agent can help you determine whether standard limits are sufficient or if your situation warrants additional coverage.
What You'll Actually Pay for General Liability Coverage
The average IT business pays around $30 per month—that's $363 annually—for general liability insurance with $1 million per-occurrence coverage and a $2 million aggregate limit. However, costs vary considerably based on your specific situation. Among IT professionals purchasing general liability, 28% pay less than $25 monthly, and 83% pay less than $50 per month. Some insurers offer coverage starting as low as $16 to $17 monthly for low-risk technology businesses.
Several factors influence your premium. If you have a physical storefront or office where clients visit regularly, you'll typically pay more than a consultant who works entirely remotely. Businesses that handle customer property during repairs or installations face higher premiums than those providing purely digital services. A computer repair shop, for example, would likely pay more than a data center with infrequent visitors. Your claims history matters too—the 2026 insurance market is trending toward flat or even modestly decreased premiums (up to 10% reductions) for tech companies with clean loss histories and strong security practices.
Annual costs for small to medium-sized technology companies generally range from a few hundred dollars to several thousand. Premiums may start as low as $1,000 yearly for smaller, lower-risk operations but increase for larger companies or those with elevated risk factors. The good news is that entering 2026, the market has shifted in favor of buyers, meaning competitive pricing for well-managed businesses.
Why IT Businesses Can't Skip This Coverage
Beyond the obvious protection against lawsuits, general liability insurance serves a practical business function: it gets you in the door with clients. Most commercial clients, landlords, and even some vendors require you to provide a certificate of insurance before they'll sign a contract or lease agreement with you. Without general liability coverage, you may be excluded from opportunities before you even get to demonstrate your technical expertise.
The coverage also protects your business assets and personal finances. Even a minor slip-and-fall claim can result in medical bills running into thousands of dollars, and defending yourself in court—even if you win—can cost tens of thousands in legal fees. A comprehensive general liability policy covers these defense costs regardless of the lawsuit's outcome, which means you won't drain your business savings fighting a claim.
For IT professionals who work from home, don't assume your homeowners or renters insurance will cover business-related claims. Most personal insurance policies explicitly exclude coverage for business activities. If that delivery person slips on your icy driveway while dropping off business equipment, your homeowners policy likely won't help. You need business insurance to protect your business operations.
How to Get the Right Coverage for Your IT Business
Start by assessing your actual exposure to general liability risks. Do you meet clients in person? Do you visit customer sites to install or repair equipment? Do you have an office where clients or vendors visit? Do you handle customer property? The more physical interaction your business involves, the more important robust general liability coverage becomes.
Review any existing contracts or lease agreements to identify insurance requirements. Many will specify minimum coverage amounts—typically $1 million per occurrence—and may require you to name them as additional insureds on your policy. Understanding these requirements upfront ensures you purchase adequate coverage the first time.
Consider bundling your general liability with other necessary coverage like professional liability and cyber insurance. Many insurers offer business owner's policies (BOPs) that combine general liability with commercial property coverage at a discount compared to purchasing policies separately. For comprehensive protection tailored to technology businesses, look for insurers who specialize in tech and IT coverage—they understand your unique risk profile and can often provide better pricing and service.
General liability insurance might not be the most exciting aspect of running an IT business, but it's foundational protection that keeps your business operational when accidents happen. At an average cost of around $30 per month, it's one of the most affordable ways to protect your business assets, meet client requirements, and gain peace of mind. Get quotes from multiple insurers who understand technology businesses, compare coverage options and prices, and choose a policy that matches your risk exposure and budget.
