General liability insurance (GLI), sometimes called business liability insurance and commercial general liability insurance, helps protect your business from claims of bodily injury and property damage. These kinds of claims can come up during normal business operations. Without coverage, you’d have to pay for damages out of pocket.
What Does General Liability Insurance Cover?
General liability insurance helps cover your costs to respond to a claim that your business caused property damage or bodily injury. It can help pay for:
A customer or client’s medical expenses if they slip and fall in your business
Repair costs to fix a wall that your employee accidentally damaged while working at a customer’s home
Legal costs to defend your business in a lawsuit
Judgments and settlements from a customer or client’s lawsuit
General liability insurance can help cover claims of:
Bodily injury or property damage that your business causes.
Reputational harm resulting from malicious prosecution, slander, libel, wrongful eviction, violating a person’s privacy and more.
Advertising injuries, such as copyright right infringement from your business’ ads.
Medical costs if your customer or client hurts themselves while visiting your business.
Damage to rented property caused by a covered loss such as fire, lightning or explosion.
How Much Does General Liability Insurance Cost?
Your general liability insurance cost depends on several factors.
One factor is your type of business. Companies in higher risk industries pay a higher cost compared to lower risk businesses. For example, construction companies are likely charged a higher rate than consulting companies. Other factors that can affect your general liability insurance cost include your company’s:
Years of experience
Policy details, like coverage limits and deductibles
Insurance claims history
Why Do You Need General Liability Insurance?
Many business owners wonder why they need general liability insurance. The answer is simple. As a small business owner, this insurance helps protect you from costly liability claims. It can help you if a claim comes up during common business situations, such as:
You or your employees representing a client
Meeting with clients face to face
Working on or with another person’s property
Using third-party locations for business activities
Advertising your business
You may also need this coverage if you have clients that request it. Many clients want to confirm you have this coverage before they sign a contract with your business. You can prove you have general liability insurance with a certificate of insurance.
Is General Liability Business Insurance Required by Law?
State laws don’t usually require business owners to carry general liability insurance. But, it’s still a good idea to have this coverage. If a customer sues your business and you don’t have coverage, it can put your business’ finances and your personal assets at risk.
It’s important to understand your state’s insurance laws. Work with a local insurance agency or our dedicated small business insurance team who can help you make the right decisions when choosing business liability insurance.
Get Added Coverage With Professional and Limited Liability Insurance
You can extend your business’ liability coverage with limited liability insurance and professional liability insurance.
Forming a limited liability company (LLC) separates your personal assets from your business. However, you’re still exposed to liability claims that can put your business at financial risk. A limited liability insurance policy can help protect your LLC and cover claims that your business caused bodily injury or property damage.
A professional liability insurance policy helps protect your business if you’re sued for a mistake in the professional services you’ve provided. This coverage is also known as errors and omissions (E&O) insurance.