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What Does General Liability Insurance Cover?
Slips, spills, and lawsuits: the claims every small business can get
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Car and home insurance protect your personal assets. General liability insurance does the same for your business. It can help pay for claims when someone outside your business is hurt or their property is damaged. Many small businesses start here, then add other coverage as they grow.
What Is General Liability Insurance?
General liability insurance covers claims made against your business by other people. That includes injuries, property damage, and harm from your advertising. It's often the first policy a small business buys. Many owners also add workers' compensation, commercial auto or an umbrella policy.
What Does General Liability Insurance Cover?
Coverage depends on your policy. General liability can help pay for costs tied to:
- Bodily injury: A customer slips in your store and breaks a wrist.
- Property damage: Your crew damages a client's floor during a job.
- Personal and advertising injury: A claim that your ad copied a competitor or harmed someone's reputation.
- Medical payments: Small medical bills for someone hurt at your business, often regardless of fault.
- Legal defense: Attorney fees, court costs and settlements for covered claims.
General liability is a starting point. It doesn't cover every risk a business faces.
General Liability Claim Examples
Example 1: A customer reaches for a top shelf in your grocery store. Products fall and hit their head. General liability can help pay their medical bills, your legal defense and a settlement, if the claim is covered.
Example 2: Your ad pokes fun at another local business. The owner sues, saying the ad cost them customers. Advertising injury coverage can help pay for covered claims like this one.
What Isn't Covered by General Liability Insurance?
General liability typically does not cover:
- Injuries to your own employees (covered by workers' compensation)
- Damage to your own building or equipment (covered by commercial property insurance)
- Mistakes in professional advice or services (covered by professional liability)
- Accidents in work vehicles (covered by commercial auto)
- Intentional damage or illegal acts
Other policies can cover these risks. A licensed partner can explain which ones apply to your business.
Who Usually Carries General Liability Insurance?
Many types of businesses carry general liability. That includes home-based businesses, sole proprietors, independent contractors and growing companies. A single lawsuit over an injury or damaged property can be costly for a small business. Clients, landlords and project owners also often ask for proof of coverage before you start work.
Coverage Businesses Often Add
Depending on how you operate, businesses often pair general liability with other policies:
- Consultants and advisors often add professional liability.
- Businesses with employees often add workers' compensation.
- Businesses that drive for work often add commercial auto.
- Bars and restaurants that serve alcohol often add liquor liability.
- Businesses that store customer data often add cyber liability.
A business owner's policy (BOP) bundles general liability and property coverage into one policy.
Is General Liability Insurance Required?
No state requires every business to carry general liability. But clients, landlords and lenders often ask for it in contracts. Other policies can be required by law. For example, most states require workers' compensation once you have employees.
How Much Does General Liability Insurance Cost?
There's no flat price for general liability insurance. Your cost depends on a few things:
- Your industry and the risks of your work
- Your location
- Your annual revenue
- The coverage limits you choose
- Your claims history
See real general liability costs for most popular industries on our insights pages. For a full breakdown, see how much general liability insurance costs.
How Do I Get a General Liability Insurance Quote?
Tivly matches small businesses with 450+ licensed partners in all 50 states. It's free to use. Click Get Started above, or call 877-907-5267 to speak with a representative.
Reviewed By: Sarah Reid, Licensed Agent
Frequently Asked Questions
Does an LLC need general liability insurance?
An LLC can help protect your personal assets in a lawsuit. It doesn't protect your business assets. General liability can help cover claims against the business itself. Some clients and general contractors also ask for proof of insurance before they hire you.
Is commercial general liability the same as general liability?
Yes. General liability goes by several names:
- Commercial general liability (CGL) insurance
- Business liability insurance
- Commercial liability insurance
Insurance companies may use any of these terms for the same policy.
What's the difference between general liability and professional liability?
General liability covers third-party injuries and property damage. Professional liability covers claims of errors, missed details or negligence in your work. Read our full guide: General Liability vs. Professional Liability Insurance.
What is proof of liability insurance?
Proof of insurance is called a certificate of insurance. It shows that your business has an active policy. Clients and project owners often ask for one before you start a job. You can usually get it from your insurance provider's website, or by email or phone.
Is general liability included in a BOP?
Yes. A business owner's policy usually includes general liability and commercial property coverage in one package.
Is general liability insurance tax deductible?
In most cases, business insurance premiums can be deducted as a business expense. A tax professional can confirm how this applies to your business.