General Liability Insurance

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What Is General Liability Insurance?

General liability Insurance (GL) is also known as business liability insurance and commercial general liability (CGL). General liability is a crucial safeguard for small businesses and the most common policy first purchased by businesses. It can be acquired as a standalone policy or bundled with other vital coverages in a Commercial Package or Business Owner’s Policy (BOP).

GL has the usual protections for your business from losses due to liability claims for bodily injury or property damage caused by your business operations. It can also cover voluntary medical expenses and personal injury claims, such as libel or slander, and certain types of advertising injuries. In an era where lawsuits are common, especially in our litigious society, having general liability insurance is indispensable for all businesses.

Many small business owners also require general liability insurance to meet the contractual requirements of leases, loans, or business contracts. For instance, landlords often require tenants to present a certificate of insurance evidencing general liability insurance when signing a commercial lease. Most leases also require the tenant to name the landlord an additional insured on the tenant’s general liability insurance.

Risking your business reputation and assets without adequate general liability coverage is not advisable.

Legal battles are costly, regardless of fault. General liability insurance covers legal defense costs for covered occurrences, allowing you to concentrate on managing your business while your insurer handles the complexities of any claims. This coverage is an investment in your business’s stability and long-term success.

As of recent updates, general liability insurance now sometimes includes expanded coverage options, such as cyber liability and employment practices liability (EPL), which reflect the evolving risks businesses face in a digital age. We do not recommend combining these coverages with general liability however, as you will get better coverage on stand-alone EPL and Cyber policies.

Why General Liability Insurance is Essential for Your Business?

General liability insurance is crucial because it addresses many of the potential risks and financial exposures that could arise from accidents in the operation of your business. Here are several scenarios where having general liability insurance is essential:

  • Client Interactions: If your business involves face-to-face interactions with clients.
  • Offsite Operations: If you conduct business activities or provide services at a client’s location, such as repairs or servicing.
  • Licensing Requirements: If obtaining a business license is necessary for your operations, general liability insurance, sometimes referred to by an older name as “public liability” insurance, is usually required.
  • Using Third-Party Locations: If your business activities take place in any third-party locations.
  • Contractual Obligations: If you need to have general liability insurance in place before signing contracts.
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What Companies Should Consider General Liability Insurance?

General liability insurance is advisable for all businesses, from contractors that provide services to clients, retail stores that sell products, or real estate owners that lease space. In some jurisdictions, it may be required before operating a business in a city or municipality. This type of business insurance is widespread in the business world.:

Here’s a look at some common industries that secure general liability insurance:

  • Retail stores
  • Restaurants
  • Building general contractors, Electricians
  • Landscapers
  • Painters
  • Hotels
  • Plumbers
  • E-Commerce
  • Shopping centers

Examples of Businesses We Insure

We offer General Liability insurance tailored to a wide array of small and medium businesses. Here are the different industries we insure:

Retail Stores

We provide comprehensive General Liability insurance for various types of retail businesses, from shoe stores to electronics and furniture shops. While higher-risk products may require more effort to insure and could result in higher premiums, we ensure coverage solutions are available, possibly through non-admitted insurers in your state.


From sandwich shops to upscale dining establishments, we offer policies that cover your restaurant’s liability. This includes liquor liability insurance if alcohol is served. Common claims in restaurants involve customer injuries from slips and falls, where the customer holds the restaurant accountable for their injury.

Lessor’s Risk

Real estate investors and landlords who rent out commercial spaces need robust liability coverage. Although tenants might also carry their own General Liability insurance, property owners could still be held liable for accidents on their premises. We provide several liability insurance options, which can often be bundled with property coverage in a Business Owner’s Policy package policy.


We insure a variety of contractors, including those specializing in carpentry, HVAC, landscaping, electrical, painting, and plumbing. Contractors are particularly vulnerable to claims of property damage caused during their operations.

Comprehensive Coverage of Your General Liability Insurance

Here, we shall elaborate on the various, beneficial protections that standard General Liability Insurance provides for you, either as a professional contractor, or a business wanting to make a mark in the world.

Third-Party Bodily Injury

In many cases, no matter how much you meticulously plan and strictly adhere to safety protocols, your business remains vulnerable to accidents resulting in bodily injuries. There is always an individual getting injured on your commercial premises or during your business operations.If your business can be held legally accountable, general liability insurance will respond.

Third-Party Property Damage

Property damage caused by your business operations or employees can lead to significant financial burdens. General Liability insurance steps in to manage claims or lawsuits for such damages. This coverage ensures that the costs to repair or replace the damaged property is covered if your business is found negligent.

Personal Injury

Libel and slander can severely damage an individual’s or business’s reputation. Libel refers to false written statements, while slander pertains to false verbal statements. If your business faces a lawsuit for defamation or slander, your General Liability policy will cover the defense costs and damage for covered claims.

Advertising Injury

Accidental use of another party’s advertising ideas or copyright-protected materials in your marketing efforts can lead to legal action. To avoid the fallout of such mistakes, General Liability insurance should be purchased to safeguard your business from inadvertent advertising injuries.

Medical Expenses

Medical expense coverage, a goodwill type of coverage, pays for necessary medical services for injuries that occur on your premises or from your operations. This is a no-fault coverage, meaning legal liability is not required for the insurance company to make a claim payment. Medical expenses includes costs for first aid, doctor visits, dental care, hospital visits, and ambulance services.It is believed that these small payouts paid quickly can avoid a full-blown bodily injury lawsuit.

Defense Costs

Legal fees for defending against bodily injury or property damage claims can be extraordinarily high. General Liability insurance covers these defense costs, appointing an attorney to protect your interests in a lawsuit for covered incidents. It’s essential to know if your policy includes defense costs within the General Liability Aggregate Limit or if it's provided in addition to the aggregate limit.

Employee Actions

Actions by your employees can result in bodily injury or property damage, creating liability for your business. For instance, if an employee spills coffee on a customer, causing burns and damage to personal belongings, your General Liability policy will respond under medical expense coverage or property damage and bodily injury liability coverage.

Supplemental Payments

General Liability insurance also includes coverage for additional claim settlement expenses. This includes investigation costs, police reports, expert witness fees, and wage loss reimbursement if court attendance is required. It also covers costs for bail bonds up to $250, court costs, and interest on judgments.

Worldwide Insurance Coverage

Your policy provides worldwide coverage for lawsuits related to your products. So long as the product was purchased in the US, its territories, possessions, or Canada, any lawsuits filed within these regions can be dealt with. Without purchasing a foreign liability policy, you won’t have protection for lawsuits filed in other countries.

By understanding these key aspects of your General Liability insurance, your business becomes well-protected from various forms of risks and liabilities, providing peace of mind and financial security.

What General Liability Insurance Does Not Cover

Of course, there are limitations to any insurance policy. This is because of the very nature of the stipulations covered in a policy. We recommend you explore other options on our website if any of these protections are important for you.

Cyber Liability

With the increasing reliance on digital operations, cyber liability has become an essential type of liability insurance. This coverage protects your business against third-party suits arising from data breaches, cyberattacks, and other digital threats. It includes costs for notification, credit monitoring for affected individuals, and legal fees associated with cyber incidents as well as many other extremely important optional coverage.

Product Recall

General Liability insurance does not include coverage for product recalls. This is a separate and crucial coverage for businesses that manufacture or distribute products. The cost involved with product recall and crisis management services are likely to force a business’s closure without this coverage.

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Damage to Your Property

General Liability insurance cannot cover damage to real or personal property that you own, rent, occupy, or borrow.

Employment Practices Liability

Claims arising from employment practices, such as hiring, firing, wage disputes, discrimination, or sexual harassment, are not covered by General Liability insurance. These claims are addressed by an Employment Practices Liability policy.

Professional Services

Professional services provided by your business are not covered under a General Liability policy. Claims related to professional errors, omissions, or malpractice require a Professional Liability policy, also known as Errors & Omissions or Malpractice Insurance.

Employee Injury

General liability insurance does not cover employee claims, including those for injuries sustained on the job or other employment-related issues. Workers’ Compensation and Employers’ Liability policies are needed for such claims.

Auto, Plane, or Boat Liability

General Liability Insurance doesn't cover property damage or bodily injury claims involving motor vehicles, planes, or watercraft. There are limited exceptions for specific situations involving boats. Still, it is essential to read your policy or consult your agent for details.

Pre-Existing Claims

Claims for incidents that occurred before the policy’s effective date or after it expires are not covered. Only events within the policy period are eligible for coverage.


General Liability insurance excludes pollution-related claims. A Pollution or Environmental Impairment Liability policy best covers these risks.

Intentional Acts

General Liability insurance cannot cover intentional acts or damages resulting from willful misconduct by you or your employees. Claims arising from deliberate harm or illegal activities are excluded.

Contractual Liability

General Liability insurance cannot cover intentional acts or damages resulting from willful misconduct by you or your employees. Claims arising from deliberate harm or illegal activities are excluded.

General Liability Insurance provides broad protection but does not cover every potential claim a business might face. Specialized policies are available for specific risks. Please consult with us to find the right coverage for your unique business needs!

Frequently Asked Questions (FAQ) about General Liability Insurance

1. Is General Liability Business Insurance mandatory?

While Federal law does not typically require general liability insurance, local regulations may vary. Many counties, cities, and municipalities require businesses to have general liability coverage to operate in their jurisdiction. Additionally, certain business relationships with customers, vendors, or landlords may require this type of insurance. Different industries also have specific requirements; for instance, many states make it compulsory general liability insurance for contractors or developers before issuing licenses. Always research local and industry-specific regulations to ensure compliance.

2. What is the Cost of General Liability Insurance?

The usual cost of general liability insurance can vary widely based on factors such as industry, revenue, payroll, types of products or services, deductibles, and policy limits. Many small businesses may pay less than $1,000 annually, while larger enterprises may incur higher premiums. Typical coverage limits for small businesses are $1 million per occurrence and $2 million aggregate. Higher-risk businesses often purchase additional Umbrella or Excess Liability policies.

General liability insurance coverage with limits of $1 million per occurrence and $2 million aggregate are the limits you see most often for small businesses. Larger or higher-risk businesses will supplement these limits with an Umbrella or Excess Liability policy.

General Liability Limit Details:

$1 million per - occurrence limit: The insurer pays up to $1 million for any single claim occurrence, regardless of the number of people injured or the amount of property damaged.

$2 million aggregate limit: The insurer pays up to $2 million within one policy term, regardless of the number of claims or claimants or the total damage incurred.

3. What Does General Liability Insurance Cover in Florida?

General liability insurance operates the same way in Florida as it does elsewhere. It covers liability claims from third parties (people outside your business) where your business is found negligent. This includes bodily injuries, property damage, and advertising liability. In Florida, general liability insurance pays awarded damages, legal fees, and settlement costs for covered incidents.

4. What is the Difference Between General Liability and Professional Liability Insurance?

General Liability Insurance: Helps protect your business against common risks such as physical customer injury, property damage, and advertising injury liability. This policy helps small businesses qualify for leases and contracts, as landlords often require this insurance.

Professional Liability Insurance: Also known as errors and omissions (E&O) or malpractice insurance, this is crucial for professional services requiring specific educational, certification, or licensing standards. It covers financial losses resulting from professional errors or negligence, excluding physical injuries or damage outside of the medical field.

Key Differences:

  • General Liability: Covers physical injuries or property damage caused by your business activities.
  • Professional Liability: Covers negligence and errors in professional services, focusing on financial losses rather than physical injuries or damage.

Both insurance types protect against business liabilities and help meet contractual requirements.

5. Is General Liability Insurance similar to Commercial Insurance?

General Liability Insurance is a component of Commercial Insurance, which includes various coverages to protect businesses from different risks. Besides general liability, commercial insurance encompasses:

Each type of commercial insurance addresses specific business risks, offering comprehensive protection for various industries.

6. Does General Liability Insurance help with Product Recall Costs?

Standard general liability policies do not cover product recall costs, separate Product Recall Insurance is necessary to cover expenses related to recalling, repairing, or replacing defective products.

Click here for more Frequently Asked Questions on General Liability Insurance.

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