What is general liability insurance?

Most small companies need this insurance, especially if you rent or own an office or commercial space. And many client contracts include requirements for general liability insurance.

Even if these don’t apply to you, small businesses that work directly with clients and customers usually benefit from general liability insurance. This insurance policy can keep your company financially stable if you’re sued by a customer or competitor.

Because general liability provides such important coverage, most small business owners buy the policy right after they start their business.

General liability insurance provides coverage for common lawsuits from third parties (people outside your business).

This policy covers your legal defense costs if someone sues over a bodily injury, property damage, or advertising injury. It can pay for everything from hiring a lawyer to court-ordered judgments and settlements.

Read more about what general liability insurance covers.

Generally not, but states may mandate it for certain industries like construction. While general liability insurance isn’t typically required by law, it’s still likely required by your landlord, mortgage company, or clients.

A landlord or client may ask your business to show a certificate of insurance as proof of your general liability insurance coverage. This document verifies that your business can handle any personal injury or property damage lawsuits.

And more importantly, the certificate gives your property manager, bank, or customer peace of mind that they won’t be stuck paying the costs of a lawsuit against your company.

Find out more about when general liability insurance is required.

General liability insurance can help pay for legal fees from common third-party lawsuits. Here are a few common situations where general liability coverage protects home businesses, contractors, and small businesses.

You can start by filling out Insureon’s free online application for general liability insurance. To apply, you’ll need to provide a little basic information about your business. That includes your:

• Business name
• Business operations
• Number of employees

Learn more about our general liability insurance application.

If you buy a policy through Insureon, you can usually get proof of insurance online on the same day you start a business insurance policy.

Traditional insurance agents can take several weeks to send a certificate of commercial liability insurance to new customers. This can be an issue for a business owner who needs immediate proof of insurance to sign a pending contract.

With Insureon, you can provide proof quickly for the contract or lease you’re planning to sign.

Like any small business owner, independent contractors can be sued and held liable for customer injuries, customer property damage, or advertising injuries.

While contractors who don’t have a physical location or expensive equipment probably don’t need a business owner’s policy or commercial property insurance, they will still benefit from general liability insurance.

If you don’t want to purchase a general liability policy, you can ask your clients to add you to their policies as an additional insured. This will cover you for as long as you work for the client who insures you.

Keep in mind that your clients might pay a higher insurance premium if they add you to their general liability policies. And your coverage ends once the contract expires.

If your business has high risks or revenue, you can extend your general liability insurance coverage with commercial umbrella insurance. Umbrella insurance increases your maximum policy limit, meaning your insurance company can cover more expensive lawsuits.

Your business probably faces risks beyond what a general liability policy covers. To get the protection you need, you can bundle these policies with general liability:

• Commercial property insurance covers your business property. When bundled with general liability, it’s known as a business owner’s policy (BOP). And it’s usually available for a discount.
• Cyber liability insurance protects against cyberattacks and data breaches. It’s an important policy for businesses that handle credit cards and other sensitive customer information.
• Product liability insurance can help pay for lawsuits if a product you made or sold injures a customer or damages their property.
• Hired and non-owned auto insurance (HNOA) covers vehicles used but not owned by your business.
• Liquor liability insurance protects against risks associated with serving alcohol. It’s usually required for a liquor license.

General liability covers customer injuries, customer property damage, and advertising injuries. Professional liability insurance covers disputes over the quality of professional services.

Almost all businesses need general liability insurance. But businesses that provide professional services need added protection from mistakes and unhappy clients.

That’s where professional liability coverage comes in. This policy helps businesses like law firms, financial advisors, consultants, and insurance agencies avoid high costs from lawsuits related to the quality of your work.

Read more about general liability vs. professional liability insurance.

Find more answers to frequently asked questions about general liability insurance.