Do all businesses need general liability insurance?

Complete Guide to General Liability Insurance Needs

Why This Question Matters for Colorado and Utah Residents

Every business in Colorado and Utah faces unique risks—whether it’s a bustling café along Old Town Fort Collins, a farm near Greeley, a construction company in Denver, or a Salt Lake City tech startup. The region’s booming growth, severe weather patterns, and evolving legal climate amplify both the likelihood and potential cost of liability claims.

• Local regulation and contracts: Many Colorado counties (like Larimer) require general liability proof—usually $1M per occurrence—for contractors or to rent business space. Utah landlords and city vendors often do the same.
• Industry risk differences: In Northern Colorado, slip-and-fall claims make up 56% of GL lawsuits—especially for retail, restaurants, and service businesses. Construction and agriculture have even greater exposure, with some lawsuits exceeding $200,000 in defense costs alone.
• Severe regional losses: Colorado ranks #1 in the U.S. for hail-related business claims, increasing losses for contractors and property-based businesses.

What Most People Get Wrong

Many assume only large businesses or manual labor industries need general liability insurance. In reality, over 74% of Colorado businesses facing a $100,000+ claim without coverage go out of business within two years. Small service providers—like yoga studios, cleaning companies, or remote tech consultants—often underestimate their exposure to customer or property damage claims.

Another misconception: “I work from home, so I don’t have risk.” But if a client visits your home office, or if your business products or advice cause harm, you can still face costly liability.

The Complete Picture

General liability insurance is designed to protect your business assets—covering everything from customer injuries to accidental property damage, product liability, or even reputational harm. In Colorado and Utah, the average small business premium is $500–$2,000/year, but claim costs can reach $50,000 to $350,000 per incident.

Some industries pay much more (e.g., $3,283/month for CO general contractors) due to regional risk factors like construction defect litigation or property losses after severe storms. Even low-risk businesses, such as software startups in Salt Lake City, face exposures like client property damage or advertising injury claims (premiums as low as $52/month, but single claims could still exceed $50,000).

No matter your business size, the right general liability policy isn’t just a requirement—it's a critical safety net that ensures a single incident doesn’t threaten everything you’ve built.

Making the Right Decision for Colorado and Utah Residents

Question 1: What specific liability risks does my business face in my city or industry?

Consider:

• Does your business involve customer foot traffic? (Retailers in Fort Collins or Salt Lake City are at higher risk for premises liability claims.)
• Do you enter client properties (e.g., cleaning, contracting) or manufacture/stage products?
• Are you in an industry affected by Colorado’s construction defect laws or Utah’s product liability trends?

Question 2: What coverage requirements do my contracts, landlords, or local regulations impose?

Review every contract, lease, or city permit you have—many require set limits (like $1M/$2M for contractors in Larimer County or vendors in Salt Lake City). Failing to carry coverage can mean losing a job opportunity or even being unable to operate legally.

Question 3: How much could one claim realistically cost my business—and can I recover without insurance?

Claims in Colorado and Utah often exceed $50,000—including legal fees for seemingly minor incidents. Ask yourself: Could your business survive a sudden $100,000 out-of-pocket bill? For most owners, affordable coverage is a much smarter investment than risking everything you’ve built.