What Is General Liability Insurance and What Does It Cover?

Regardless of how your business is structured, limiting personal liability is only part of protecting what you’ve built. Businesses of all types can still face financial exposure from lawsuits, accidents, property damage, or other unexpected events tied to day-to-day operations.

Business insurance can help protect the business itself against financial losses resulting from certain covered claims, legal costs, or other disruptions. The following is an overview of common business insurance policy types to consider.

Coverage availability, terms, conditions, limits, and exclusions vary by insurer, policy, state, and business risk profile. The descriptions below are general in nature and are not a substitute for reviewing the specific policy forms, endorsements, and applicable requirements with a licensed insurance professional.

What Is General Liability (GL) Insurance?

General liability (GL) insurance, often called commercial general liability (CGL) insurance, helps protect a business, such as an LLC, against financial exposure arising from certain third-party claims. Although coverage terms vary by policy, GL insurance generally applies to third party claims involving bodily injury, property damage, and personal and advertising injury.

This type of coverage can play an important role in risk management by helping cover legal defense costs, medical expenses, settlements, and judgments that may arise from covered accidents, injuries, or alleged harm connected to the business’s operations, products, advertising, or employees. For many businesses, general liability insurance is a key coverage and is often required under contracts with clients, landlords, partners, or vendors.

What Does Commercial General Liability Insurance Typically Cover?

While coverage details vary by policy, commercial general liability (CGL) insurance helps protect businesses against certain losses arising from third-party claims, including:

Bodily Injury – Covered claims arising from physical injuries to third parties, such as a customer who slips and falls at your location.

Property Damage – Covered damage to a third party’s property caused by your business operations, products, or employees.

Personal and Advertising Injury – Covered allegations that may include libel, slander, use of another’s advertising idea in your advertisement, infringement of another’s copyright, trade dress, or slogan in your advertisement, or certain privacy-related offenses.

Products and Completed Operations – Covered claims related to bodily injury or property damage caused by products you sell or work you’ve completed.

Medical Payments – Certain medical expenses for injuries occurring on your premises or arising from your operations, subject to policy limits and conditions and without requiring a determination of fault.

Legal Defense Costs – Expenses associated with defending your business against covered lawsuits, including attorney fees and court costs, subject to the policy’s defense provisions and limits.

General liability insurance can help provide financial protection against covered claims, allowing businesses to manage risk and help respond to legal actions.

What Does a General Liability Policy Typically Not Cover?

The terms, conditions, limitations, and exclusions of a particular policy may vary; however, general liability insurance policies typically do not cover the following claims or exposures. This list is illustrative only and does not address all claims or exposures that may be limited or excluded under a GL policy:

Professional liability: Claims arising from the rendering of professional services or advice would typically be covered by professional liability insurance instead. Learn more about the difference between professional liability and general liability.

Employee bodily injury or illness: Employee work-related injuries or illnesses are typically be covered under a workers' compensation insurance policy.

Intentional acts: Intentional acts or deliberate harm caused by the insured business or its employees are typically excluded under GL policies. This may include claims for fraud, assault, or intentional damage to property.

Damage to insured property: GL policies generally do not cover damage to the insured business's own property. Commercial property insurance may be explored to help address covered losses to business property.

Pollution and environmental damage: Pollution-related claims or environmental damage are typically limited or excluded under standard GL policies. Separate pollution liability insurance may be explored to help address this type of risk.

Other Business Insurance Coverages Available

Business Owner's Policy (BOP)

Why would you want to consider a Business Owner’s Policy for your business or an LLC? A BOP combines Commercial General Liability coverage with Commercial Property coverage in one policy. A Commercial Property policy helps business owners protect the value of a covered building and its contents (such as furniture, equipment) and exterior fixtures features (such as fences) against covered loss.

If you have business property to consider, you may want to evaluate whether a BOP or separate commercial property coverage provides broader protection than general liability coverage alone.

Professional Liability Insurance

Professional liability insurance may be right for you if your business provides professional advice or professional services to others. Also known as errors & omissions insurance, professional liability insurance can be an important risk management tool for accountants, architects, and consultants, for example.

Professional liability insurance can help provide financial protection for companies and professionals if a client alleges their work is inadequate or they committed a negligent act, error, or omission in the course of providing professional services.

Cyber Insurance

Data breaches and cyber attacks are a concern for many businesses of all sizes. For example, it can be difficult if a customer’s data is stolen or if ransomware disrupts your system. A cyber insurance  policy can help cover certain costs associated with covered data breaches and cyber attacks, subject to the policy’s terms, conditions, and exclusions.

Commercial Auto Insurance

If your business involves driving to client sites or delivery of goods by company car or truck, commercial auto insurance is an important type of insurance to consider. Commercial auto insurance helps provide coverage for vehicles owned, leased, hired, or used by the business, and available coverage options may include liability, physical damage, medical payments or personal injury protection, and uninsured/underinsured motorist coverage, depending on the policy and applicable state requirements.

Should I Consider Commercial General Liability Insurance for My Business?

Having the right small business insurance in place is an important risk management tool. GL coverage should be considered because it can help protect against financial liability arising from certain covered third-party claims.

Connect with a licensed insurance professional who understands your business and can help you evaluate coverage solutions for your needs, or get started and  request a commercial general liability insurance quote online now.