General Liability Insurance
Answer a few questions. Compare personalized quotes. Get covered today.
What kind of work do you do?
Woman reviewing paperwork
Logos of Insureon's Partners
We partner with trusted A-rated insurance companies

What does general liability insurance cover?

Commercial general liability insurance (CGL) covers common lawsuits that arise from everyday business activities. It protects against customer injuries, damaged customer property, and accusations of defamation and copyright infringement.

Why is general liability coverage important?

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

This business liability insurance covers 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 injuries 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.

It's a popular and affordable policy, with a median premium of only $40 per month for Insureon customers.

General liability insurance coverage includes:

Blue check mark
Third-party bodily injury
Blue check mark
Product liability
Blue check mark
Third-party property damage
Blue check mark
Personal and advertising injuries

Third-party bodily injury

If a customer is hurt in an accident involving your business, general liability insurance can help pay for medical expenses. It also covers legal expenses if a customer sues over the injury.

Example: A customer trips over a carpenter’s toolbox and breaks a leg. The doctor's bills add up fast, so the customer sues to recoup their losses. Your policy can cover the cost of medical expenses, including the emergency room bill.

If the customer refuses your assistance and opts to sue at a later date, your policy can help cover the legal bills.

Third-party property damage

General liability insurance can cover expenses when your business accidentally damages or destroys another person’s property.

Example: A general contractor backs his pickup truck into a client’s fence. The contractor’s general liability insurance policy covers the cost of replacing the damaged fence, up to the policy limit. It would also cover legal fees if the client filed a lawsuit.

Product liability

Not all property damage or customer injuries happen inside a store. If a business manufactures, distributes, or sells products, it can be sued over the harm its products cause to people or property.

Example: A customer buys a container of a lawn care company’s organic fertilizer. The fertilizer causes them to suffer a serious allergic reaction, so they miss three days of work. The customer sues the lawn care business for their lost wages.

The business's general liability insurance, which includes product liability insurance, covers the legal expenses associated with the lawsuit.

Personal and advertising injuries

If someone sues a business owner or employee over slander, libel, false arrest, or copyright infringement, general liability insurance can help pay for legal expenses.

Example: A maid at your house cleaning company tweets a rude comment about sloppy work done by a competing company. The tweet goes viral, and the owner of the competing business decides to sue for libel.

The cleaning company's general liability insurance policy helps pay for legal defense costs and any resulting settlement or judgment.

Compare general liability insurance quotes

How much general liability coverage do I need?

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 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 claim, with a $2 million limit for the lifetime of the policy, typically one year.

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 insurance does not cover:

no coverage check mark
Professional errors
no coverage check mark
Employee discrimination lawsuits
no coverage check mark
Employee injuries
no coverage check mark
Vehicles used by a business
no coverage check mark
Stolen or damaged business property
no coverage check mark
Liquor liability

Professional errors

Professional liability insurance, also called errors and omissions insurance, can cover lawsuits over professional mistakes, including undelivered services and missed deadlines.

Example: A real estate agent accidentally lists a house as having hardwood floors when it really has laminate wood flooring. After the home is sold, the homeowner discovers the error and files a lawsuit. Professional liability insurance could help cover the agent’s legal costs.

Employee injuries

Workers' compensation insurance is the policy that covers medical expenses, physical therapy, and some lost wages for employees.

Example: A cook at a restaurant gets splashed with hot oil and suffers third-degree burns. Workers’ comp helps pay for the emergency room bill and part of his missed wages while he recovers.

Stolen or damaged business property

A business owner's policy (BOP) can help cover the cost of replacing stolen business property. It can also pay for repairing or replacing business property damaged by fire or certain weather events. A BOP combines general liability insurance with commercial property insurance at a discount.

Example: A fire at an office complex damages a tax preparation company. Commercial property insurance can help pay for replacement computers, equipment, and building renovation costs.

Employee discrimination lawsuits

Employment practices liability insurance (EPLI) can cover lawsuit expenses related to claims of harassment, discrimination, and wrongful termination.

Example: An employee at an engineering business files a lawsuit claiming partners are not assigning her to high-profile projects because of her ethnicity. An EPLI policy could cover legal expenses for the firm.

Vehicles used by a business

Personal auto insurance policies almost always exclude business use. Vehicles owned by a business must be covered by commercial auto insurance. Personal vehicles used for work purposes, along with leased or rented vehicles, can be covered by hired and non-owned auto insurance, which you can add to a general liability policy.

Example: An IT consultant driving his car to meet a client gets into an accident. His personal auto insurance policy won’t pay for damages, but a hired and non-owned policy would.

Liquor liability

Liquor liability insurance covers lawsuits over incidents caused by people who became intoxicated at your business. That could include drunk driving, assault, and vandalism.

This policy is required for businesses that serve alcohol. You can purchase it as a standalone policy or add it to your general liability policy.

Example: After leaving a bar, intoxicated patrons vandalize the office building next door. Liquor liability insurance covers the bar's legal defense costs when the office sues.

Commercial general liability insurance exclusions

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 injury or property damage.

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

Updated: July 27, 2022
Compare general liability insurance quotes
Fill out our online application and get expert advice to find the right policy.
What kind of work do you do?