Does Georgia require general liability insurance for businesses?

All FAQs

Quick answer: No Georgia statute requires a typical business to carry general liability insurance. In practice it becomes mandatory through commercial leases, client contracts, and some occupational licenses that ask for proof of coverage before you can operate. Two related coverages are required by Georgia law: workers compensation once a business has 3 or more employees (O.C.G.A. 34-9-2(a)(2)), and auto liability on business vehicles at Georgia's 25/50/25 minimum (O.C.G.A. 33-34-4).

No Georgia statute requires a typical business to carry general liability insurance. General liability insurance is coverage that responds when a business's operations cause bodily injury or property damage to someone outside the company, such as a customer, vendor, or visitor. Georgia's insurance code does not list it as a mandatory purchase the way some other coverages are.

In practice, the requirement often shows up anyway, through a different door. Commercial leases commonly require a tenant to carry a minimum amount of general liability coverage, often $1 million per occurrence, before the landlord hands over keys. Client contracts frequently include an insurance clause requiring a vendor to show proof of coverage, usually through a certificate of insurance, before work can start. Some occupational licenses and permits ask for the same proof.

For example, a small landscaping company signing its first commercial contract with a property management firm may find the contract will not be signed until the company provides a certificate showing $1 million in general liability limits, even though no Georgia law forced that company to buy the policy in the first place.

Two related coverages work differently. Georgia law requires workers compensation, a separate policy covering medical bills and lost wages for a business's own injured workers, once a business reaches 3 or more employees, under O.C.G.A. 34-9-2(a)(2). General liability does not cover employee injuries; see Does general liability cover injuries to my own employees in Georgia? for that distinction, and Workers Compensation Insurance for what the coverage includes. Georgia law also sets a minimum auto liability limit of 25/50/25 for vehicles used in the business, under O.C.G.A. 33-34-4.

Because the practical requirement for general liability comes from contracts and leases rather than statute, the coverage limits a specific business needs depend on what its landlords and clients are asking for. A coverage review can check a lease or contract's insurance clause against current coverage.

More on how the coverage works, including what it pays for and what it excludes, is in General Liability Insurance for Small Business and the Georgia-specific version at Georgia General Liability Insurance. General liability policies are available through Olive Cover across a panel of carriers for Georgia and Alabama businesses.