What is General Liability Insurance?

General liability insurance is a commercial insurance policy covering a broad range of perils and incidents. General liability pays for losses for bodily injury, property damage, and medical payments to cover third-party costs in the event of a lawsuit.

For example, if a customer slips and falls at your place of business, the claim would be covered under bodily injury. If you send a worker out to a customer’s home to perform a service and they damage a wall, it would be covered under property damage.

Why Your Business Needs General Liability Insurance

As a rule, general liability insurance is not required by law. However, some states do require construction companies to acquire general liability insurance due to the inherent risks.

If your business is found to be responsible for a loss, payouts can be large. Without a business liability insurance policy, your business could easily go bankrupt. Insurance companies pay tens of billions in defense costs and cost containment expenses every year.

Client contracts, landlords, and mortgage companies sometimes require businesses to carry general liability insurance.

Who Should Purchase General Liability Insurance?

Nearly every business should consider acquiring general liability insurance.

Business liability insurance is recommended for the following types of situations:

• Your facilities are open to the public.
• Your employees work closely with customers.
• You or your employees handle customer property.
• You or your employees work on-site.
• You rent or own commercial property.

Coverage Breakdown:

General liability insurance is intended to cover common types of business risks. The coverage is divided into three parts:

1. Coverage A: Bodily injury and property damage liability covers medical costs if a customer gets hurt while visiting your business or your business causes property damage to someone else.
2. Coverage B: Personal and advertising injury liability covers claims such as reputational damage (malicious prosecution, wrongful eviction, libel, slander, violating privacy, etc.) and copyright infringement.
3. Coverage C: Medical payments pay for smaller payouts for medical bills.

General liability covers damage to a property you rent for specific perils such as lightning, explosion, or fire. Your general liability insurance policy will also help cover court costs, judgments, and settlements for covered claims.