General Liability

What Is Liability Insurance?

General liability insurance (GLI) can help cover claims that your business caused bodily injury or property damage. This coverage is also known as commercial general liability insurance (CGL). You can get GLI as a standalone policy or bundle it with other key coverages through a Business Owner’s Policy (BOP).

We’re here to help you understand what business liability insurance coverages your company may need. Whether it’s learning what general liability insurance covers or getting a general liability insurance quote, we’re here to help.

What Does General Liability Insurance Cover?

General liability insurance helps cover costly claims that can come up during normal business operations. If you don’t have coverage, you’d have to pay for these general liability insurance costs out of pocket.

A general liability insurance policy can help cover claims that your business caused:

Third-party bodily injury: If a customer gets hurt after slipping and falling in your store, they can sue your business. Your insurance policy includes bodily injury liability coverage, so it can help pay for their medical bills.
Third-party property damage: If you or your employees work at a client’s house, your business faces a risk of causing property damage. Property damage liability coverage can help pay for repair or replacement costs if your business damages someone else’s belongings.
Reputational harm: Someone can sue your business for libel or slander because of something you or your employees said. If this happens, general liability insurance can help cover your legal costs to defend your business.
Advertising injury: Your business can get sued for copyright infringement. For example, a photographer can sue you if you use their photo in your ads without permission.

Be aware that general liability insurance doesn’t cover every kind of claim. For example, it doesn’t help your business with claims of:

Work-related injuries or illnesses sustained by employees, which workers’ compensation insurance can help cover. This insurance can help pay for their medical expenses and ongoing care costs.
Damage to your own business property, which commercial property insurance can help with.
Mistakes made in your business’ professional services, which professional liability insurance can help cover.

What Are the Types of Liability Insurance?

In addition to GLI, there are other types of liability insurance that most insurance companies recommend:

Commercial umbrella insurance provides additional limits on top of some of your existing liability policies to help pay for expensive claims.
Employment practices liability insurance can help cover your legal defense costs and settlements or judgments if a current or former employee sues you for employment-related harassment, discrimination or wrongful termination.
Management liability insurance helps protect your business’ directors and officers from costly claims.

Commercial auto insurance helps protect you and your employees on the road if you’re driving a car for business.

Why Do You Need General Liability Insurance?

Liability claims aren’t uncommon and can get expensive. In fact, 4 out of 10 small businesses will likely experience a liability claim in the next 10 years. Slips and falls are the leading cause of emergency room visits. The average cost of this kind of claim is $35,000. If a claim leads to a lawsuit, it can increase its average cost to more than $75,000 to defend and settle. Without general liability insurance, your business would have to pay for these costs out of pocket and it can put you out of business.

You may also need general liability insurance before you can work with other businesses. Some companies may ask you to provide proof of insurance, also known as a certificate of insurance.