If you own a small business, you’ve likely heard that general liability insurance is something you should have. But what exactly does it cover, and why is it considered such an important part of a business insurance plan?
General liability insurance—sometimes called GL insurance or commercial general liability—is one of the most fundamental types of coverage available to businesses of all sizes. Understanding how it works can help you make more informed decisions when shopping for business insurance.
What General Liability Insurance Covers
General liability insurance is designed to protect your business from financial losses related to third-party claims. This typically includes three main areas:
- Bodily injury coverage applies when a customer, vendor, or other third party is injured at your place of business or as a result of your business operations. If someone slips and falls in your store, for example, general liability can help cover the associated medical costs and legal expenses if a lawsuit follows.
- Property damage coverage helps when your business operations cause damage to someone else’s property. If an employee accidentally damages a client’s belongings while performing a service, this coverage may apply.
- Personal and advertising injury coverage addresses claims related to libel, slander, copyright infringement in advertising, or other non-physical harms caused by your business activities.
What General Liability Does Not Cover
It is equally important to understand what general liability insurance does not cover. It generally does not cover damage to your own business property, employee injuries (which typically fall under workers’ compensation), professional errors or negligence (covered by professional liability or errors and omissions insurance), or vehicle accidents involving business vehicles.
This is why many businesses carry general liability as part of a broader insurance plan that includes other policy types suited to their specific risks.
Who Needs General Liability Insurance?
Almost any business that interacts with customers, operates from a physical location, or provides a service or product can benefit from general liability insurance. Many landlords, clients, and government contracts require proof of general liability coverage before doing business with a company. Even home-based businesses and independent contractors can face liability claims that make this coverage worth considering.
Taking the Next Step
Understanding your business’s specific risks is the first step toward choosing the right coverage. At Torhorst Insurance, we work with business owners in Oregon, Wisconsin and throughout the region to help explore insurance options suited to their industry and operations. Call us at (608) 835-2828 or fill out a quote request on our website to start the conversation today.
