General Liability Insurance
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Does general liability insurance cover property damage?

General liability insurance serves as an important financial shield for businesses. It protects against financial losses from third-party claims of property damage, but there may be exclusions when it comes to protecting all types of business-related property damage.

What is general liability insurance coverage?

General liability insurance provides essential protection for businesses against third-party claims of bodily injury and property damage. For example, if a customer slips on a wet floor and falls in a store, general liability insurance will cover medical bills and legal expenses if the business is sued.

General liability insurance also covers advertising injuries, including claims of libel, slander, or copyright infringement. Policies provide coverage for medical payments, legal defense costs, judgments, and settlements up to the policy limits. General liability insurance coverage is often required in client contracts.

What does general liability cover?

Commercial general liability policy (CGL) provides protection to ensure that unexpected accidents, legal costs, or liability claims don't disrupt business operations.

This includes common third-party liabilities, such as:

Customer injuries

General liability insurance protects a business when a customer or someone else suffers a personal injury related to the business’s operations or when someone is injured on the business premises. A general liability insurance policy typically covers medical expenses, legal defense costs, and a settlement or judgment.

For example, if a landscaping company is working on a client's property and leaves equipment unattended, a homeowner may trip over a tool and break their ankle. Commercial general liability insurance would cover claims involving the homeowner's medical bills and a potential lawsuit.

Customer property damage

General liability insurance protects a business if its operations unintentionally cause damage to someone else’s property. Without this protection, businesses would have to pay for the damages out-of-pocket, which could be significant.

For example, if a construction company that is replacing a roof accidentally knocks over a ladder, it might damage the client’s vehicle. General liability insurance would cover the cost of repairing the vehicle, potentially saving the company thousands of dollars.

Advertising injuries

General liability insurance protects businesses against claims of advertising injury, which may include allegations of copyright infringement, libel, slander, or misappropriation of advertising ideas in marketing materials. Coverage typically pays for legal defense costs from lawsuits and settlements or judgments.

For example, if a restaurant creates a new logo that bears an unintentional resemblance to another establishment's trademarked design, it may trigger a copyright infringement lawsuit. Without general liability coverage, costly legal fees could force the business into bankruptcy or closure.

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Does general liability insurance include coverage for all types of property damage?

General liability only covers damage to third-party property, such as property that belongs to a customer, vendor, or other third party. For example, if an employee of a residential cleaning service accidentally breaks a window while working in a client's home, general liability property damage coverage would step in to cover the claim up to the policy limit.

However, it will likely not protect the business’s own assets. For protection of property that a business owns, leases, or rents, commercial property insurance is a must. This type of coverage pays for the repair or replacement of business property due to fire, theft, vandalism, and other risks.

Instead of purchasing policies individually, many businesses carry a business owner's policy (BOP), which conveniently bundles general liability and commercial property insurance together at a lower cost than if they were purchased individually.

How much does general liability insurance cost?

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The cost of general liability insurance varies from one business to another. Insurers consider several factors when determining the premium, including:

  • Type of business and risk exposure
  • Business size
  • Location
  • Number of employees
  • Coverage limits
  • Claims history

On average, general liability insurance costs around $42 per month for Insureon's small business customers — with 29% paying less than $30 per month for their coverage.

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What other risks are not covered under general liability insurance?

In addition to not providing protection for damage to property that the business owns, leases, or rents, general liability insurance also doesn’t cover a business’s employees if they're injured on the job or protect against claims of professional errors or negligence.

For those risks, workers’ compensation insurance is needed to cover employee injuries, while professional liability insurance, also referred to as errors and omissions insurance, is required to protect the business from lawsuits related to mistakes in professional services or a failure to meet client expectations.

Commercial property insurance is often needed to protect physical assets at a place of business. It provides crucial protection for a business’s building, equipment, inventory, furniture, and other physical property. However, for property in transit — like tools being transported to a jobsite, merchandise being shipped to customers, or equipment hauled between business locations — inland marine insurance is often required.

Inland marine insurance protects business property wherever it goes and is essential for businesses that transport goods or equipment or operate off-premises.

What is the difference between general liability and property insurance?

General liability insurance specifically covers third-party claims such as bodily injury, property damage, or advertising injury. In contrast, commercial property insurance specifically covers a business's physical assets, like buildings, equipment, inventory, furniture, and fixtures.

The primary difference in property vs. liability insurance is that commercial property insurance provides first-party coverage, while general liability protects against third-party claims. Because the two types of insurance provide different coverage, most businesses need both to protect against the various risks they face.

Do I need both general liability and commercial property insurance?

For businesses with locations that are open to the public or where customers, clients, subcontractors, or vendors visit, having both general liability and commercial property insurance is essential. Together, the two policies provide protection against the most common risks businesses face. If the small business is eligible, Insureon’s trusted providers often offer these policies bundled together in a business owner’s policy (BOP).

Businesses that don’t have an office or business location still need protection for their assets. In these cases, business personal property (BPP) coverage is a good option. This protection can often be added to a general liability policy as an endorsement to protect tools, inventory, and other business assets stored at home.

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It's easy to get insurance for your small business with Insureon. Just fill out our online application to receive quotes from trusted providers. Our expert insurance agents are available to answer any questions and help you find the best small business insurance for your needs.

Most small business owners can get same-day coverage and easily download a certificate of insurance (COI) as soon as they purchase a policy.

Updated: May 7, 2025

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