What is General Liability Insurance?

Many businesses across different industries are exposed to a variety of common risks. General liability insurance helps protect against several of these potential perils. For many businesses, this form of coverage is a foundational protection.

General liability insurance is a broad liability insurance policy that safeguards businesses from several risks at once. Broadly speaking, policies offer protection from claims and lawsuits filed by third parties over covered incidents.

What Businesses Can Benefit from Having General Liability Coverage?

Because general liability coverage provides broad protections against a variety of risks that many businesses are exposed to, most businesses can benefit from having a general liability policy. Hair salons, real estate brokerages, cafes, and homebuilders are vastly different businesses – but they all should consider general liability protection.

Some businesses may even need a general liability policy in order to secure contracts. Municipalities and large companies frequently only work with insured contractors and vendors.

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What Coverages Does a General Liability Policy Usually Provide?

While exact protections can vary from policy to policy, there are a few coverages that most general liability policies provide. They are:

  • Bodily Injury Coverage, which may help protect a business if someone is injured on company property
  • Property Damage Coverage, which might help protect a business if the business is held responsible for damaging a person's or another organization’s property
  • Personal Advertising Injury Coverage, which may help protect a business if it’s accused of slander, libel, or false advertising

Some general liability policies include additional protections, such as liquor liability coverage or product liability coverage. These other coverages aren’t found in all policies, though, and policies that do have these coverages may not offer enough protection for all businesses. For these reasons, many businesses supplement their general liability policy with other, more specialized liability policies.

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Does General Liability Coverage Protect Against Claims Filed by Owners or Employees?

General liability coverage is primarily designed to protect against lawsuits and claims filed by third parties. Third parties are normally people and organizations that aren’t directly connected with a business. They may be competitors, vendors, customers, or other people or organizations.

Owners and employees usually aren’t considered third parties. Therefore, claims filed by them usually aren’t covered by general liability coverage. These claims may be covered by another insurance policy, depending on the specifics of a claim and policies that a business has.

Do Professionals Need a General Liability Policy?

General liability policies shouldn’t be confused with professional liability policies, for the two types of insurance offer significantly different protections.

Professional liability policies normally provide coverage for mistakes related to a professional’s work. For example, a policy might cover a mathematical error than an accountant makes or poor advice that an investment advisor offers. These policies usually don’t offer bodily injury, property damage, or false advertising liability coverage, though.

Therefore, most professionals should have a general liability policy in addition to any professional liability insurance they carry. The coverages that a general liability provides offer complementary, rather than overlapping, protection.

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How Can Businesses Obtain General Liability Insurance?

There are several ways businesses may acquire general liability protection. Most businesses can purchase it:

  • As a stand-alone policy
  • Through a business owners policy
  • Through a commercial package policy

To find out which of these options is best for their particular business, business owners should contact an independent insurance agent who serves their state. An independent agent can request quotes for each of these options from several insurance companies. Then, they can help business owners decide which of the available options offers the best general liability insurance and is most suitable for their business.


Meet Your Industry Specialist

Jeff Kroeger

Principal, Senior Vice President, and Head of Commercial Lines, Mr. Kroeger also manages the company's hospitality book of business and is that unit's primary producer. He is a graduate of Montclair State University and was named a 2015 Young Gun Insurance Business America.

Jeff has been providing exceptional insurance for restaurants, bars, nightclubs, and more for many years. He understands the unique challenges this industry faces and delivers the right coverage at an affordable price.

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