What does general liability insurance cover?


General liability insurance protects your business from legal claims against you due to:

  • Bodily injury. This covers injury arising from accidents that result for your business operations, arising from your premises or for completed operations. This includes injury one gets from the product your sell or the service you provide, as well as accidents inside your business office or place of operations that result in bodily injury. This can also cover physical harm caused by a completed project. For instance, you are a contractor that installed a set of kitchen cabinets to a client. One of the hinges was loose and a piece of wood fell into the customer's head, causing injury.
  • Damage to property. This covers property damage due to the instances that are stated above (for bodily injury)
  • Advertising injury. This includes lawsuits that allege that your advertisement made false claims or caused loss to a competitor. For instance, you can face a lawsuit if you made negative statements about a competitor that resulted in financial loss to the competitor.
  • Personal injury, including libel or slander. This includes lawsuits due to damages the business or you as the owner caused to another business or an individual. This covers not just for acts of libel or slander, but also invasion of privacy, infringement of trademarks and copyright, false arrest or wrongful eviction.

With general liability insurance, your business is covered when you face a lawsuit from another party - be they employees, customers and competitors.

The insurance will usually pay for:

  • The cost of mounting a legal defense, as well as legal expenses
  • Medical payments for bodily injuries another party has sustained. This may pay the medical bills of a client, a visitor or even a trespasser without looking at who is at fault n the situation. This may be the first step towards preventing potential lawsuits.
  • Compensation for the financial losses resulting from bodily damage, property damage, as well as personal or advertising injuries
  • Compensation for pain and suffering

What General Liability Won't Cover

General liability insurance will commonly not pay for liability claims that should be covered by other policies such as:

  • Workers compensation (for injuries to employees while on the job)
  • Environmental liability insurance (for lawsuits related to pollution such as a gas tank dripping gasoline)
  • Professional liability Insurance or Errors and Omissions insurance - for liability arising from a professional service you provide
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