What is general liability insurance?
The foundation policy almost every small business starts with — explained in plain English.
General liability insurance — often shortened to "GL" — is the policy most small businesses buy first. In one sentence: it is generally intended to respond when someone else claims your business caused them bodily injury or damaged their property.
What a GL policy is generally intended to cover
- Third-party bodily injury — a customer trips over your equipment and is hurt.
- Third-party property damage — you knock over and break something at a client's home or job site.
- Personal & advertising injury — allegations like libel, slander, or copyright issues in your advertising.
- Defense costs — the policy is generally intended to help pay to defend you against a covered claim, even one that turns out to be groundless.
What general liability does not cover
This is where most misunderstandings happen. GL is for third parties. It generally does not address:
- Your own injuries or your own employees' injuries → that's workers compensation.
- Damage to your own tools, equipment, or inventory → that's inland marine (tools & equipment) coverage.
- Mistakes in your professional advice or service → that's professional liability, also called Errors & Omissions (E&O).
- Auto accidents → that's commercial auto.
Who typically needs it
Trades and contractors, cleaners, fitness instructors, vendors, event professionals, retailers, and most service businesses commonly carry GL. Often it is not your choice at all — a client contract, a venue, a landlord, or a general contractor requires it and asks for a certificate of insurance before you can start.
How it is usually priced
Carriers generally rate GL on factors like your annual revenue, the type of work you do, your claims history, the coverage limits you choose, and your state. There is no flat rate, which is why an online quote is the only way to see your actual number. Coverage terms, eligibility, and pricing are determined by the carrier and vary by state and individual circumstance.
Frequently asked questions
What does general liability insurance cover?
A general liability policy is generally intended to respond to third-party bodily injury, third-party property damage, and certain personal and advertising injury allegations that arise out of your business operations. It typically also helps with the legal defense costs of a covered claim. It does not cover your own injuries, your own property, or professional mistakes.
Is general liability insurance required?
It is rarely required by law, but it is frequently required by contract — landlords, clients, venues, and general contractors commonly ask for proof of GL before you can work or rent. Some state and local licenses also require it.
How is general liability different from a BOP?
A Business Owner's Policy (BOP) bundles general liability together with commercial property coverage (and sometimes business interruption) at a package price. GL on its own covers liability only.
Does general liability cover my tools or my employees?
No. Damage to your own tools and equipment is generally addressed by inland marine (tools and equipment) coverage, and injuries to your own employees are generally addressed by workers compensation. GL is for third-party claims.
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