What Does General Liability Insurance Cover?

Businesses in every industry are at risk of third-party lawsuits. Whether it's a customer or delivery driver injury or a case of personal property damage, your business can be sued for many different disasters that are unfortunately fairly common. That's why having enough general liability insurance is critical to protect your business against hefty losses from these incidents and resulting litigation. 

Luckily, a local independent insurance agent can help you get your business protected with the right kind of general liability insurance. Your agent can shop and compare general liability insurance quotes and policies from many different carriers to find you the best deal. Until then, here's a breakdown of general liability insurance, what it covers, and why it's important. 

What Is General Liability Insurance? 

General liability insurance is a component of a complete business insurance policy that protects your business against losses from third-party claims of bodily injuries, personal property damage, and personal or advertising injury caused by your business in some way.

Definition of general liability insurance

General liability insurance is just one critical type of liability protection needed by almost all businesses. Any third party, such as a customer, visitor, or delivery person, can sue your business if they claim to have suffered a type of injury or property damage because of it. 

These injuries and property damage may arise during your business operations or after hours. This coverage is also known as business liability or commercial general liability (CGL) insurance.

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What Does General Liability Insurance Cover?

General liability insurance covers many types of third-party claims, such as bodily injuries and personal property damage, as well as the cost of your business's legal defense if you're involved in a lawsuit for the claim.

Bodily injury coverage

CGL insurance covers claims for third-party bodily injuries that occur on your premises, such as slips and falls, or those resulting from your business activities. This coverage can reimburse your business for the medical expenses, ambulance fees, and sometimes even lost wages of customers, visitors, and others who are injured or affected by the incident, if they are required to miss work due to the incident.

Property damage coverage

CGL insurance coverage protects your business if your operations accidentally cause damage to someone else's property. This coverage can pay for repair or replacement costs of the property. 

For example, if one of your employees accidentally breaks a client's window or damages their personal belongings while carrying out a business service, such as making a delivery, CGL insurance could pay for these losses and those from any resulting lawsuits.

Personal and advertising injury

General liability insurance also covers non-physical injuries to third parties, including claims of libel, slander, wrongful eviction, malicious prosecution, and copyright infringement in advertising materials. If your business is sued for any of these claims, your CGL insurance can pay for the damages to the injured party and cover your company's litigation costs if there is a lawsuit.

Legal defense costs

One critical aspect of your CGL policy is that it pays for your business's legal defense in a lawsuit. This includes attorney fees, court costs, and legal settlements or judgments arising from covered claims. 

Even if your business is not ultimately found liable for the claim, the cost of legal defense can still be extremely expensive. CGL insurance can help your business avoid extreme losses that could even result in bankruptcy after just one unexpected lawsuit.

Premises and operations liability

CGL insurance covers third-party accidents and injuries that occur on your business's property or as a direct result of your ongoing business operations, whether at the premises or off-site. 

Slips, trips, and falls are common examples of customer and guest injuries that happen at a business's premises. Many types of accidents may occur off-site, such as those that arise while your business hosts an event for the public at another venue.

Products and completed operations

Your business's CGL coverage also protects against bodily injury or property damage claims resulting from products you sell or completed services you provide to customers, clients, and other third parties. 

If the customer is harmed in some way due to your business's products or completed work, they can sue your company. Fortunately, CGL can pay the third party for the cost of the injury or property damage and cover your business's legal defense if a lawsuit occurs.

Reputational harm

General liability insurance protects your business against claims alleging that your company's actions or advertisements caused harm to someone's reputation, such as through disparagement or slander. CGL can pay the injured party for losses due to the incident and also cover the cost of your business's legal defense if you are sued for it.

Landlord’s property damage

Some commercial general liability policies can cover accidental damage your business causes to property that you rent from a landlord. If your policy includes this coverage, it can reimburse the landlord for the property damage and cover your business's legal defense costs if the landlord presses charges against you.

What General Liability Insurance Does Not Cover

General liability insurance includes a lot of important coverage for businesses, but it also comes with certain exclusions that are important to be aware of. CGL coverage typically does not cover the following:

• Employee injuries: These are covered by workers' compensation insurance.
• Auto accidents: These may be covered by commercial vehicle insurance or standard auto insurance.
• Professional errors and omissions: These are covered by professional liability insurance.
• Damage to your personal property: This would be covered by homeowners insurance or a similar policy.

An independent insurance agent can help you get the additional coverage you need to protect against any of these disasters, which are not covered by CGL insurance.

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How Much Does General Liability Insurance Cost?

The cost of CGL insurance ranges from $40 to $70 per month. However, general liability insurance costs can vary based on several factors, including the following:

• The size and location of your business
• Your business's industry and operations
• Risk factors on your premises
• Claims history

An independent insurance agent can help you find affordable CGL insurance for your business.

An Independent Insurance Agent Can Help You Find General Liability Insurance

When you're ready to protect your business against losses due to third-party injuries, property damage, and more, no one's better equipped to help than a local independent insurance agent. These agents have access to several business insurance companies, so they're free to shop and compare CGL quotes and policy options for you. 

They'll get you equipped with the coverage that offers the best protection and cost. And later on, your agent can help you file business insurance claims and update your coverage when necessary.