General liability insurance

General liability insurance protects against the most common risks of running a business.

This business liability insurance coverage pays for legal costs if a customer trips and suffers an injury at your business, or if you accidentally damage someone's property. This policy also covers personal and advertising injuries, such as libel and copyright infringement.

Small business owners often need general liability insurance to fulfill requirements for a lease, loan, or contract. For example, a landlord might ask to see a certificate of insurance when you sign a commercial lease.

General liability coverage is a crucial component of risk management for small businesses, and it's affordable. The average premium is about $42 per month for Insureon customers.

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

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

Specifically, your commercial general liability (CGL) policy provides coverage for:

Most companies need this insurance, especially if you rent or own an office or commercial space. Even if that doesn't apply to you, small businesses that work directly with clients and customers 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 insurance provides such important coverage, most small business owners buy the policy right after they start their business.

While general liability insurance is crucial for most small businesses, it does not provide all the protection you need. For instance, your policy does not include coverage for:

General liability insurance covers common business risks, though it does not protect against all of them. To be fully insured, small business owners should also consider:

Business owner's policy: A BOP bundles general liability coverage and commercial property insurance at a discount. It protects against the most common lawsuits and property damage.

Workers’ compensation insurance: Workers’ comp covers medical costs for work-related injuries and illnesses. Most states require this coverage for businesses with one or more employees.

Professional liability insurance: This policy covers professional mistakes and oversights, such as missing a project deadline. It’s also known as errors & omissions insurance.

Commercial auto insurance: Auto insurance is required in most states for businesses that own vehicles. It covers your legal bills, medical expenses, and property damage if one of your business vehicles is involved in an accident.

Cyber insurance: Also called cyber liability insurance and cybersecurity insurance, this policy protects small businesses from the high costs of a data breach or malicious software attack. It covers expenses such as customer notification, credit monitoring, legal fees, and fines.

Need a policy recommendation? Answer three questions and we can help you find the right coverage for your business.

If you are purchasing general liability insurance to fulfill the terms of a contract or lease, you need to make sure that your coverage meets the requested policy limits.

Otherwise, you should aim for an amount of coverage that's both affordable and matches your business needs. Simply put, you want to make sure your policy can pay for a lawsuit if you’re sued. Consider the size of your business, the number of employees, and its business operations to determine your exposures and risk of financial loss.

Most small businesses opt for the standard $1 million per occurrence / $2 million aggregate policy limits. This means the policy will pay up to $1 million to cover a single insurance claim, with a $2 million limit for the lifetime of the policy, typically one year.

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.

When buying a policy, also make sure the deductible is something you can easily afford. If you can’t pay for it in a crisis, your insurance won’t activate to cover your liability claim.

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 professionals like accountants, lawyers, consultants, and insurance agents avoid high costs from lawsuits related to the quality of their work.

For some industries, such as media and advertising professionals, general liability insurance will not cover libel, slander, or other advertising injuries. These businesses instead require media liability insurance, which is a form of professional liability insurance.

Read more about general liability vs. professional liability insurance.

General liability insurance has some additional coverage exclusions. For example, it doesn't pay defense costs for intentional copyright infringement or willful negligence – which can be criminal offenses. It also doesn't cover intentional injuries or property damage.

While a general liability policy typically covers damage to someone else’s property, most policies exclude times when you have temporary possession of the items. In insurance terms, this is called care, custody, and control. Small business owners can fill this gap with bailee coverage, which is a type of inland marine insurance that can complement both general liability and commercial property coverage.

Read your policy carefully to see what is and isn't covered. To fill other gaps in coverage, you can also add endorsements to your policy. Check with a licensed insurance agent to make sure your general liability policy includes all the coverage you need.

If you want to learn more about this policy, you can find additional answers in our frequently asked questions about general liability insurance.

If there are any additional questions you have about coverage or other types of business insurance you may need, you can also contact an Insureon agent.

Obtén más información sobre el seguro de responsabilidad civil general (en español).