What Does General Liability Insurance Cover?
General liability insurance, also known as commercial general liability, is a type of small business insurance that can help protect businesses against claims:
Bodily injuries
Property damage
Personal injury such as slander or libel
Advertisement injury
Copyright Infringement
Damage to reputation
General liability insurance also helps protect your business financially if you are sued. Your GLI policy can help you pay legal fees and settlement costs.
Without general liability insurance, your business would have to pay out of pocket for costly damages that could occur during normal business operations.
what Does General Liability Insurance Cover?
A general liability policy helps cover claims that may arise during normal business operations, such as:
Injury
General liability coverage can help you pay medical expenses associated with a bodily injury your business may have caused, such as a customer’s slip and fall.
Property Damage
If an employee’s accident causes property damage, such as breaking a client’s windows while working at home, general liability insurance can help. This coverage can help cover the cost of repairing or replacing windows.
Personal Injury
General liability can help you pay the costs of defending your business if you are sued for an injury that is not physical, such as defamation or defamation
Examples of General Liability Coverage
Examples of general liability insurance include:
Product liability insurance can help protect your business against claims that a product you made or sold caused someone else’s personal injury or property damage.1 We offer product liability insurance as part of your general liability insurance policy.
Product recall insurance will help you manage a product recall and protect you from the financial impact. Product recall insurance is an endorsement that you can add to your business policy.
Contractual liability coverage can be added to your general liability insurance policy. Contractual liability insurance helps cover claims related to contractual matters.
What costs does general liability insurance cover?
What is general liability insurance and what does it cover? General liability insurance, also known as commercial general liability insurance or business liability insurance, helps cover:
Property damage costs against your business
Medical expenses if a customer is injured at your business
Administrative costs for handling covered claims
Court costs, judgments and settlements for covered claims
Your general liability insurance can help you pay for damages up to your coverage limits or your general summary. Your general aggregate for insurance, sometimes called the “aggregate limit of liability,” is the maximum amount your insurance company will pay for claims during the policy period. So if you have an aggregate limit of $1 million on your general liability policy, your insurance will pay for damages up to a maximum of $1 million during the policy period.
What Coverage Does a Typical General Insurance Policy Provide?
Your general liability insurance can help you pay for damages up to your coverage limits, sometimes referred to as your occurrence limit and your general aggregate limit.
The limit per event is the maximum amount that the insurance company will pay for one insurance event. For example, if you have a GLI policy with a $1 million occurrence limit and a $2 million general aggregate limit and you file a $1.1 million claim, your insurance company would pay $1 million for the event and your business would likely pay the remaining $100,000. The remaining amount you have left in the policy period will then be reduced from $2 million to $1 million.
The general aggregate limit, sometimes called the “aggregate liability limit”, is the maximum amount your insurance company will pay for claims during the policy period. So if you have an aggregate limit of $1 million on your general liability policy, your insurance will pay for damages up to a maximum of $1 million during that particular policy period.
What Does General Liability Insurance Not Cover?
Be aware that general liability insurance does not cover all types of damage. For some, you’ll need different types of coverage to give your business more protection.
General liability insurance will not help your business with:
Commercial traffic accidents caused by you or your employees while driving to work. Commercial auto insurance can help you cover the cost of damages. If your small business does not have company-owned vehicles, leased and non-owned auto insurance can also help. Be aware that many states require certain types and amounts of automatic coverage, such as bodily injury liability coverage or property damage liability coverage.
Injuries or illnesses of employees as a result of their work. Workers’ compensation insurance provides benefits to your employees to help them recover from a work-related injury or illness. For example, it can help cover an employee’s medical bills and ongoing care costs.
Damage to own business property. You will need to purchase commercial property insurance to help protect your own or leased building and business equipment.
Errors or omissions in professional services provided to customers. Professional indemnity insurance can help cover your legal costs if a client sues you for a mistake in the services provided, such as bad advice given to the client or faulty workmanship.
Claims that cost more than your liability limits. For expensive claims, you will need commercial umbrella insurance. This extends the limits of some liability insurance.
Illegal acts or wrongdoing committed intentionally by you or your employees can lead to legal liability for your business.
The danger of not having general liability insurance
State law generally does not require you to have general liability insurance. However, not having coverage could put your business at risk.
Judgments, settlements, legal fees and court costs can also be extremely expensive. If someone files a lawsuit against your business:
You will need legal counsel, which can cost between $100 an hour to $500 an hour.2
You may have to spend several thousand dollars even if the lawsuit is dropped.
When you add in the costs of administrative work, legal secretaries, and any settlements or judgments, your business could be facing a bill totaling hundreds of thousands of dollars. The right general liability insurance can help your business cover these costs.
You may also find that businesses will want to make sure you have the minimum coverage they require before agreeing to you. They want to make sure your business survives a liability claim and continues to do what they hired you to do. So they may ask you to show proof of insurance.
