What Is General Liability Insurance?
General liability insurance is a foundational policy designed to protect businesses from financial losses due to claims of bodily injury, property damage, or other liabilities arising from their operations. It provides coverage for legal costs, settlements, and judgments, ensuring that businesses are not financially devastated by unforeseen events.
What Does General Liability Insurance Cover?
Bodily Injury:
- Covers medical expenses and legal claims if a customer, client, or third party is injured on your business premises.
- Example: A customer slips and falls in your store.
Property Damage:
- Pays for damages caused by your business operations to someone else’s property.
- Example: A contractor accidentally damages a client’s furniture during a job.
Personal and Advertising Injury:
- Includes defamation, slander, and copyright infringement claims related to your business activities.
- Example: A competitor sues for defamation after a marketing campaign.
Legal Defense Costs:
- Covers attorney fees, court costs, and settlements if your business faces a lawsuit.
What Is Not Covered by General Liability Insurance?
While comprehensive, general liability insurance does not cover:
- Employee injuries (covered by workers’ compensation insurance).
- Professional mistakes or negligence (requires professional liability insurance).
- Damage to your own business property (covered by commercial property insurance).
- Intentional harm or illegal activities.
Why Your Business Needs General Liability Insurance
- Protection Against Financial Loss: Shields your business from significant out-of-pocket expenses in the event of lawsuits or claims.
- Client Requirements: Many clients or contracts require proof of general liability insurance before hiring your business.
- Business Reputation: Demonstrates professionalism and a commitment to managing risks responsibly.
How Much Does General Liability Insurance Cost?
The cost of a policy depends on factors such as:
- Business size and industry.
- Annual revenue.
- Claims history.
- Coverage limits and deductibles.
General liability insurance is an essential safeguard for businesses of all sizes. By providing protection against common risks, it helps ensure that your operations can continue without disruption, even in the face of unexpected claims.
