What Is General Liability Insurance?
General liability insurance protects your business against claims that your operations, products, or employees caused someone else bodily injury, property damage, or advertising injury (like a defamation claim). It's typically the first policy any business buys, and often the minimum coverage required to sign a commercial lease or land a client contract.
What General Liability Covers
- Bodily injury: A customer or visitor is injured on your premises or because of your operations
- Property damage: Your business accidentally damages someone else's property
- Personal and advertising injury: Claims of libel, slander, or copyright infringement in your marketing
- Products liability: A product you sell or manufacture causes injury or damage
- Legal defense costs: Attorney fees and court costs, even if the claim against you is ultimately dismissed
What General Liability Does NOT Cover
- ❌ Employee injuries (requires Workers' Compensation)
- ❌ Professional mistakes or negligent advice (requires Professional Liability/E&O)
- ❌ Damage to your own business property (requires Commercial Property insurance)
- ❌ Auto accidents involving business vehicles (requires Commercial Auto)
- ❌ Data breaches or cyber incidents (requires Cyber Liability)
Typical Coverage Limits
| Coverage Limit | Best For |
|---|---|
| $500K / $1M | Very small, low-risk businesses just starting out |
| $1M / $2M (most common) | Most small businesses — the standard most clients and landlords require |
| $2M / $4M | Higher-risk industries or businesses with larger contracts |
How to Get Cheaper General Liability Insurance
- Bundle into a BOP: Combining GL with commercial property in a Business Owner's Policy typically saves 10-20%
- Pay annually instead of monthly: Avoids installment fees that typically add 5-10% to your total cost
- Keep a clean claims history: Fewer claims means better rates at renewal
- Compare 3-4 quotes: GL premiums vary significantly by carrier for the same coverage
Frequently Asked Questions
Most states don't legally require general liability insurance for most businesses. However, it's frequently a contractual requirement — commercial landlords, clients, and professional licensing boards commonly require proof of GL coverage before you can do business with them.
Most small businesses pay $300-$1,000/year ($25-$83/month) for $1M/$2M in GL coverage. Low-risk service businesses like consultants pay toward the lower end, while higher-risk businesses like contractors and restaurants pay more.
Yes — many insurers offer a Business Owner's Policy (BOP) that bundles general liability with commercial property, and you can typically add workers' comp as a separate policy from the same carrier for convenience, though it's rated and priced independently.