General liability insurance is one of the most important—and most common—types of business insurance. Whether you run a small retail shop, operate as a contractor, or manage a large company, this coverage forms the foundation of protection against everyday risks.
Without it, your business could be exposed to costly lawsuits or claims that might threaten your financial stability. Let’s break down the basics of what general liability insurance covers and why nearly every business needs it.
The Four Main Areas of Coverage
1. Bodily Injury
If someone gets injured on your property or due to your business operations, bodily injury coverage steps in.
- Example: A customer slips on a wet floor at your store and needs medical treatment. General liability can help cover their medical bills and any related legal expenses.
2. Property Damage
Property damage coverage applies if your business accidentally causes harm to someone else’s property.
- Example: A contractor working on a client’s project accidentally damages part of their property. The resulting repair costs could be covered under general liability.
3. Personal and Advertising Injury
This protection applies to claims like defamation, slander, or copyright infringement—but specifically in the context of advertising injury.
- Example: If your business is accused of using a copyrighted image or slogan in your marketing without permission, general liability may provide defense and coverage.
4. Products & Completed Operations Liability
This covers risks tied to products you sell or services you’ve completed.
- Example: A product you manufacture causes harm after purchase, or a service you completed later results in damage. General liability can help with resulting claims.
- Note: This part of the policy is sometimes excluded depending on your industry. In those cases, it may need to be purchased separately as its own policy.
Why General Liability Insurance Matters
Lawsuits and claims can be expensive, even if they’re unfounded. General liability insurance not only covers damages but also legal defense costs, which can quickly add up. Having this protection in place gives your business the ability to operate with peace of mind.
What General Liability Doesn’t Cover
While it’s a great starting point, general liability doesn’t cover everything. For full protection, many businesses also need:
- Professional Liability Insurance: Protects against claims of negligence or mistakes in professional services.
- Cyber Liability Insurance: Covers data breaches, cyberattacks, and other digital risks.
- Employment practices liability: for employment-related claims of harassment, discrimination, wrongful termination.
Bundling With Other Coverages
General liability is often bundled with other insurance types in a
Commercial Package Policy or a
Businessowners Policy (BOP). These packages can also include:
- Commercial property coverage
- Business interruption insurance
- Commercial auto insurance
Bundling can often save money while making risk management more straightforward.
Final Thoughts
General liability insurance is more than just a box to check—it’s a foundational safeguard for your business. From slip-and-fall accidents to advertising disputes, it provides a critical layer of protection against everyday risks.
If you’re unsure whether your current policy provides the right level of protection—or if you need help exploring options like bundling with a BOP—working with a trusted insurance advisor can make all the difference.
