What Does General Liability Cover?

General liability insurance, often called commercial general liability (CGL), is a type of coverage that protects businesses from common risks they might face. This includes things like accidents that cause injury to a customer, damage to someone else's property, or legal costs from a lawsuit. It's the most widely used insurance policy for businesses of all sizes and in all fields, offering broad protection.

General liability insurance is essential for protecting your business, much like car and home insurance protect your personal belongings. It's the most fundamental policy for any business, regardless of size or industry, and it safeguards your company's finances from common risks.

What General Liability Insurance Covers

A general liability policy is the core of your business's insurance plan. It covers a wide range of issues, including:

Bodily injury to customers or other third parties.

Property damage to someone else's belongings.

Personal and advertising injury, such as libel, slander, or copyright infringement in your marketing materials.

Legal costs, including defense fees, investigations, and settlements if your business is sued.

However, a general liability policy doesn't cover everything. It typically excludes damage to your own company vehicles, injuries to your employees (which is usually covered by workers' compensation), and professional errors or mistakes (which fall under professional liability).

Who Needs General Liability Insurance?

Every business, from a home-based sole proprietorship to a larger company, should have general liability insurance. It protects your business from financial ruin if a client or customer sues you for injury or property damage.

Depending on your specific business, you might need additional types of coverage:

Product Liability Insurance: If you sell or manufacture products.

Professional Liability Insurance: If you provide expert services.

Home-Based Business Insurance: If you operate from your home and need specific coverage not included in a standard homeowner's policy.

Cost of General Liability Insurance

The cost of a general liability policy varies based on several factors, including your industry, annual revenue, and past claims. A basic $1 million policy can start at just a few hundred dollars per year. For an accurate quote, it's always best to consult with an insurance agent who can tailor a policy to your business's specific needs.

Frequently Asked Questions

Does an LLC need it? Yes. While an LLC protects your personal assets, general liability insurance protects your business's assets from lawsuits.

Is it the same as commercial liability? Yes, these terms are often used interchangeably to refer to the same type of coverage.

Is it legally required? No, general liability is not legally mandated, though other types of insurance, like workers' compensation, may be required depending on your state and business.

How is it different from professional liability? General liability covers physical harm and property damage, while professional liability covers financial losses resulting from professional mistakes or negligence.

Is it included in a BOP? A Business Owner's Policy (BOP) typically bundles general liability with commercial property and business interruption insurance, often at a lower cost than buying them separately.

Is it tax deductible? Yes, the premiums you pay for general liability insurance can be deducted as a business expense.

Other Important Policies to Consider

Beyond general liability, you might also need:

Commercial Property Insurance: Protects your business building and its contents from damage or theft.

Workers' Compensation Insurance: Covers medical costs and lost wages for employees injured on the job.

Commercial Auto Insurance: Covers accidents involving vehicles used for business purposes.

General liability insurance is the essential starting point for your business's financial protection.

For a personalized quote, it's best to speak with an insurance professional.

why is general liability important to have ?

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BODILY INJURY

PROPERTY DAMAGE

PERSONAL INJURY

ADVERTISING INJURY