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What is General Liability Insurance?

Happy Business Owner

General liability insurance (GL), also referred to as commercial general liability (CGL) or business liability (BL) insurance which can protect you from various claims. It shields you and your business from general and usual claims involving bodily injuries and property damage. Almost every industry or business requires general liability insurance.

General liability insurance can support and help cover medical costs and attorney fees resulting from bodily losses and property damage for which your business may be legally liable. Explore how these coverages protect and shield small businesses and how much you’ll want to consider your novel risk.


What Does General Liability Business Insurance Cover?

General liability insurance coverage for small businesses has a comprehensive liability insurance policy to help protect their companies. This insurance helps shields your business from claims of:

  • Bodily injury
  • Property damage
  • False Advertising
  • Copyright violations
  • Reputational harm

Liability claims are common and can come up during regular business operations. They can get costly for small businesses, and many don’t have the means and resources to cover a liability claim. Without liability insurance coverage, your firm or company would have to pay these costs out of pocket.

General liability insurance can pay to investigate and support claims and also pay for damages if your business is responsible for things like:

  • Bodily Accident
  • Property Damage
  • Personal and Advertising Injury

Bodily Accident: Should a client injure or hurt themselves while visiting your workplace, you could be responsible for their medical expenses as well as pain and distress.

Property Damage: You may visit your client’s headquarters to deliver your services. Should you damage their property during your work, you could be liable for restoring or rebuilding the damaged property.

Personal and Advertising Injury: A section of your job involves advertising your company to grow the business. Should one of your competitors claim that your advertisement damaged or ruined their reputation, you could be accountable for slander.


What Does General Liability Business Insurance Not Cover? ​

A consumer general liability policy covers damage to your clients, consumers, and other third parties. It doesn’t cover several essential points- 

Property damage to your property: Should something happen to your personal or business property, a general liability policy wouldn’t cover it. For business-related damages, you’d also need commercial property insurance.

For instance, if a fire breaks out at your company and your business is held liable, your general liability policy might pay for the damage to the nearby businesses. However, it wouldn’t cover the damage the fire did to your company or facilities.

Professional errors: While general liability covers bodily accident claims, professional liability insurance protects you against suits related to mistakes or negligence. This type of insurance protects anyone who renders professional services.

For example, if you’re an IT consultant and hired to improve a firm’s cybersecurity. Should a breach successfully occur despite your most careful efforts, you could be held accountable. Professional liability insurance could help protect you.

CGL policies do not provide coverage for professional liability, employment practices liability, liquor liability, employee benefits liability, and workers’ compensation. You will need to purchase new policies or add endorsements to your CGL policy for these sorts of coverage.


Who Needs General Liability Insurance?

As a small business owner, you require some form of business liability insurance to safeguard your resources and livelihood. A particular event could result in a lawsuit that you might not be capable of handling. 

An excellent way to preserve and protect against this is to make sure you have liability coverage that suits your level of exposure. Some consumers or employers might also demand you to carry a certain amount of general liability before you can work for them. Here are some general guidelines for liability insurance coverage. To be assured about your particular business needs, be sure to consult with a qualified business insurance agent.

Most businesses, firms, and companies need general liability insurance to protect themselves against lawsuits, investigations, settlements, medical damages, and attorney fees. Be aware that general liability insurance doesn’t cover every kind of claim. It doesn’t help your business with claims of employee injuries, damage to your business property, or intentional acts, which professional liability insurance can help cover.


What is Commercial General Liability?

Commercial general liability insurance (CGL) is designed to protect you and your business from a loss if you’re found legally accountable for bodily damages or property harm to a third party caused by the goods or product you sell or the service you render. 

Commercial general liability is regarded as comprehensive business insurance that can offer protection in situations where you or your staff conduct business offsite. However, it does not cover all risks a company may face.


Why is Commercial General Liability Important?

Commercial general liability (CGL) insurance is a vital and necessary component of your entire business insurance package. No matter your profession or business, it is your frontline defense against the financial consequences of a third-party accident. 

It’s essential to building assurance and trust with prospective clients because it tells them that you’re a legitimate and legal business. Needed or not, general liability insurance guarantees that one big claim can’t hinder you while you build and grow. 

These can be claims that arise from damages or capital loss that occur on your business property or those caused by you or your employees while doing business. CGL insurance pays for attorney fees or any judgments you might have to pay if you are getting prosecuted or sued. It also grants coverage for slander claims, copyright violations, and misleading advertising.


A commercial general liability policy cover three sorts of business liability exposures:

  • Bodily injury and property damage related to ownership and preservation of business premises, or as the result of services and operations conducted both at and away from business premises.
  • Property damage or injuries that result from faulty products or completed processes.
  • Negligent and careless actions of independent contractors that you hire.

Commercial general liability includes three types of claims for which you will receive payment from the insurance company:

  • Incidental or accidental bodily damage or property loss for which your business is legally responsible.
  • Personal injury or misleading advertising that the company is found legally liable.
  • Medical expenses for individuals injured on the company’s premises or business operations, regardless of fault.

Regardless of size, every firm and business is vulnerable and exposed to lawsuits and the costs of being liable for injuries to others. Commercial General Liability insurance provides the protection you need.


How Much Does General Liability Insurance Cost?

The cost of general liability insurance differs based on your business services and policy limits, among other factors. When you get a policy, your commercial general liability insurance price is specific to your business. So, prices will differ between companies.

General liability insurance costs differ because every business is different and unique. Various factors can influence insurance rates, from the amount of risk a company encounters in its industry to the coverage amounts in a policy.


Factors Affecting General Liability Business Insurance Costs

Insurance companies can use various factors when determining your expense of general liability coverage:

  • Risk exposure: If your business is in an industry with superior levels of risk, it can increase your general liability insurance cost.
  • Business Location: Managing your company in a highly-populated area can increase the risk of bodily injuries, impacting your insurance cost.
  • Years in business: Usually, the longer you’ve been in business, the more profound experience you have, which can help reduce your insurance rate.
  • Coverage limits: A higher policy limit can boost your insurance premium.
  • Claims history: Holding a clean claims history or using venture management strategies to help decrease your liabilities can help reduce your small business insurance cost.


The most reliable way to figure out how much your business’ general liability insurance cost will be is to get a quote. Call us today at FailSafe to get a personalized quote at 215-942-4880.