Paige Cerulli Last Updated On: May 23, 2024

What is General Liability Insurance?

General liability insurance, also called business liability insurance, small business liability insurance, or commercial liability insurance, helps to protect you from claims that can result from the inherent risks of running your business. General liability insurance helps to protect you from “general” claims of bodily injury or property damage that your business might be legally responsible for.

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Why is General Liability Insurance Important?

Whether you’re a contractor or a small business owner, a single lawsuit can be financially devastating. Even if you’re found not at fault for the issue, you could spend tens or even hundreds of thousands of dollars in lawyer fees.

General liability insurance gives you extra protection, so you’re prepared for a lawsuit, just in case it should ever happen. Your insurance policy can help to protect your business as well as your savings and investments.

What Does General Liability Insurance Cover?

General liability insurance covers several types of accidents that might occur while you’re doing business:

  • Injuries to people who aren’t your employees
  • Damage that occurs to another person’s property
  • Advertising damages, such as if you accidentally use wording that is copyrighted
  • Damage sustained to property that you are renting for your business
  • Injuries or damage sustained as the result of a product that your business has sold

The coverage usually applies to accidents that occur at your place of work or a client’s place of work. The coverage also applies to job sites. For example, if someone other than you or an employee were injured in a covered accident on your construction business job site, your general liability insurance would help cover that person’s medical bills.

This type of business insurance can help to pay for court and legal fees, as well as medical expenses resulting from these accidents.

What Does a General Liability Insurance Policy Not Cover?

While general liability insurance coverage applies to many situations, it doesn’t cover all of the potential accidents you might encounter while doing business. A typical general liability insurance policy won’t cover:

  • Injuries sustained by you or your employees
  • Accidents involving your business vehicles
  • Bodily injury or property damage that results from intentional acts
  • Professional mistakes, like missed deadlines or services not delivered
  • Theft of your business property
  • Damage to your business property
  • Intentional copyright violation

Other types of business insurance, such as workers’ compensation coverage and commercial vehicle insurance, better apply to these types of situations. Chances are that you will need a combination of several types of business insurance to ensure that your business is fully covered.

How Much Does General Business Liability Insurance Cost?

The cost of general liability insurance depends on many factors:

  • Your business size
  • The industry your business is in
  • Your business location
  • The amount of coverage you need

A personalized quote will give you the best idea of how much general liability insurance will cost, and what your monthly premium will be. Many general liability insurance providers allow you to pay your premiums monthly, quarterly, or annually, which can also help to make it easier to afford the coverage you need.

Get a free general liability insurance quote today to start exploring your options.

Do You Need General Liability Insurance?

Business general liability insurance can help to protect you against significant expenses resulting from accidents. For example, if you own a restaurant, a general liability policy can help to pay for expenses resulting if a customer slips and falls. If you have a cleaning business, your policy can help to pay for any damage that might occur if you accidentally break a client’s property while cleaning. And if you’re a photographer, your general liability insurance can protect you if a client falls and is injured during a photo shoot.

While general liability insurance isn’t necessarily required by law, it’s an important investment in your business and in your financial protection. Some cities may require you have proof of general liability insurance before they will grant you a business license. Additionally, certain employers or clients might require you to provide proof of your general liability insurance before you can work for them, and you might need this insurance if you plan to sign a commercial lease.

FAQ​

The amount of insurance you need will depend on your business. It’s important to consider the type of work you do and the level of risk that your business faces. The number of employees and contractors you have will also affect the amount of coverage that you should buy. Your policy limits need to be high enough to pay for a lawsuit and any damages.

If you need a business general liability policy that meets a contract or lease requirement, then be sure to refer back to those specific requirements.

Once you get a personalized quote, you can better see your coverage level options and how different coverage will impact your insurance costs. A $1 million per occurrence and $2 million aggregate are fairly standard policy limits, but depending on your situation, you may need higher limits.

General liability insurance payments are a cost of doing business, so chances are that they will be tax deductible under your business taxes. Make sure to ask your tax professional about how to properly report your insurance costs on your tax return.

To apply for general liability insurance, you’ll need to be prepared with some basic business information:

  • Business name
  • Business industry and type of operations
  • The number of years of experience you have in the industry
  • The number of employees your business has
  • Your business’ estimated annual revenue

General liability insurance tends to be pretty affordable, but opting for lower policy limits can help you to save money. Just keep in mind that those lower limits may not fully cover you if you ever need to file a claim.

You may also be able to save on general liability insurance by purchasing a business owner’s policy. A business owner’s policy includes general liability coverage and commercial property insurance, and you’ll get a bit of a discount on your coverage.

Don’t forget to shop around for your general liability insurance. Getting general liability insurance quotes from multiple companies can help you compare rates and find the policy that’s best for your business.


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