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What Does General Liability Insurance Cover? (2023 Update)

General liability insurance is essential insurance coverage for small businesses. It covers you from specific legal claims. This article will attempt to simplify general liability coverage for you. We will cover the following topics:

What does general liability insurance cover?

General liability insurance protects your business from certain legal claims. These include bodily injury, property damage, reputational harm, copyright infringement, and advertising injury. 

Bodily injury

Bodily injury claims are relatively common. If someone falls in your store or office, they could file a bodily injury claim against you. Someone who gets hurt in your business might file a claim for medical costs. Your general liability policy would cover those costs. 

Property damage

You could be legally responsible if someone else’s property is damaged while on your premises when you own a business. You could also be held accountable if there are damages to a customer’s home or property while you are there on business. Property damage coverage also might cover damaged electronic data. 

If you are accused of using someone else’s work without permission in your marketing or ads, you are being accused of copyright infringement. These claims are covered by general liability insurance.

Reputational harm

Do you routinely do news interviews? If so, be careful what you say. If you say something harmful to another business owner or business, you may find claims made against you. Your general liability insurance policy should protect you. 

Advertising injury

Defamation is serious. Your general liability policy should cover those claims if you’ve been accused of defaming someone, another business, or a business owner.

These kinds of claims are relatively common. Should you choose not to have general liability insurance, you need to be prepared for expensive out-of-pocket costs if you’re ever faced with a claim. A slip and fall claim alone could cost you more than $20,000. Without general liability insurance, you would be paying any claims or costs of legal action yourself. 

What does general liability insurance not cover?

General liability insurance doesn’t cover everything. Let’s look at some of the things not covered by general liability insurance. You will require different types of business insurance for these situations.

Auto accidents require a commercial auto insurance policy. If you own the car and use it for business, you will have to have a commercial policy, but if you are renting the vehicle or using your personal vehicle for work, a hired or non-owned auto coverage might be enough. 

Employee injuries and illnesses

Employee illnesses and injuries that occur at or because of work require a workers’ compensation insurance policy. Most states require some form of workers’ compensation, but not all of them do. It’s wise to learn your state’s workers’ compensation insurance regulations.

Damage to your business property

Commercial property insurance is needed to cover damages to your business property. This kind of policy will protect both your equipment and your building. 

Mistakes in professional services

You’ll need a professional liability insurance policy for claims that you’ve made a mistake in your professional service. These policies are also known as errors and omissions policies. 

Claims exceeding your policy limit

Your policy’s liability limit determines how much your insurance will cover. It will not cover anything above your claim limits. Anything above that is your responsibility to pay unless you have an umbrella policy that will bridge the gap in your policy limits.

Illegal acts purposely committed by you or your employees

No insurance policy covers deliberate criminal acts you or your employees commit. 

Additional coverages by adding endorsements to general liability insurance policy

Like other insurance policies, your commercial insurance policies may require endorsements or riders to provide the exact coverage you need. Some variables help determine if your policy needs a rider or more than one rider. These variables include what kind of business you operate, including your specific industry, the type of policy, including the exclusions and limits, and who carries your insurance. For example, for contractors general liability insurance policy, it is popular to add an endorsement to cover contractors professional liability as well. Learn more at the best contractors professional liability insurance companies.

There are endorsements available for covering subcontractors, covering you if your business can’t operate because of an ongoing claim, equipment breakdowns, the government temporarily closing your business, and a variety of other instances. Discuss your coverage needs with your insurance company to decide which endorsements would most benefit you if any. 

Who needs general liability insurance?

Most small businesses can benefit from general liability insurance, but it’s essential if the following apply: 

  • You have a location that is open to the public.
  • You work closely with clients or customers.
  • You handle client property.
  • You rent or own commercial property.

Every business owner is at risk of a liability claim of some kind. The most basic form of business insurance you should have is general liability insurance. This insurance will protect you from third-party claims against your business and help keep you from paying significant out-of-pocket claims expenses. 

How much does general liability insurance cost?

The average cost of general liability insurance for small business is $650 a year. Most small businesses pay between $300 and $5,000 for a general liability insurance policy. Learn more at how much does general liability insurance cost?

These are just the averages. Be sure to compare several quotes to select the cheapest one for your company.

General liability insurance cost varies depending several factors. Below are a few of them:

  • How much coverage you purchase
  • The industry you are in and how risky it is
  • Your location
  • How many employees you have

Where to find general liability insurance?

Like other insurance, you can purchase general liability insurance from various companies. Comparison shopping will help you determine which policies are best for you. Let’s look at some methods for shopping for general liability insurance. 

Traditional insurance companies: the Hartford, Liberty Mutual, Chubb, Hiscox

Traditional insurance companies have been in the insurance business the longest of our choices. Many of them offer online quotes but require contact with an agent to purchase your policy. If you want the tried-and-true method of shopping for insurance, a traditional company is the way to go.

Insuretechs: Next, Thimble

Insuretechs blend technology with insurance. Many of them specialize in business insurance. This is the insurance experience of the future—purchase online, and receive coverage almost immediately. 

Digital broker: CoverWallet,, Huckleberry

Digital brokers allow you to shop for quotes from multiple carriers at once. You input your basic information, and the broker provides you with various quotes from which you choose the option that works best for you. 

Learn more at the best general liability insurance companies.

Buy general liability insurance online

General liability insurance is probably the most popular business insurance policy. Most, if not all, small businesses need it. It is actually pretty easy to buy a general liability insurance policy online. You can get and compare several quotes online easily as well. You can choose to get quotes from digital brokers, or insuretechs, and traditional insurance companies. They all offer general liability insurance quotes online.

Getting and comparing quotes online will make it easy and convenient to buy a cheap general liability insurance policy online.

General liability insurance vs. professional liability insurance

General liability insurance and professional liability insurance are both types of business insurance. General liability covers physical issues like property damage or bodily injury. Professional liability covers problems that arise from errors in business practices. For example, if your client claims your service caused them financial difficulty, your professional liability policy would be the one to cover. Learn more at the best professional liability insurance companies.

General liability insurance vs. Workers comp insurance

General liability insurance protects you against third-party claims. Workers’ compensation insurance helps cover expenses your employees incur due to an injury or illness that occurred at or because of work. Learn more at the best workers comp insurance companies.

General liability insurance vs. commercial property insurance

While general liability insurance protects you against third-party claims that you or your employees damage their properties while doing your work. Commercial property insurance protects your property and assets when they are damaged. Learn more about the differences between general liability insurance and commercial property insurance.

They are both essential business insurance coverages for small businesses. If you need both coverages, you may also consider getting a Business Owners Policy (BOP), which combines these two coverages in one bundled policy to save costs.

Final thoughts

General liability insurance is a fundamental policy that any small business should have. It covers you from claims regarding bodily injury or property damage.

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