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What is general liability insurance?

General liability insurance is coverage for claims that may be filed against your business. This could include claims of property damage, reputational harm, advertising injuries, and bodily injury. If you didn’t have this type of policy and someone was injured during your regular business operations, you may have to cover the costs out of pocket instead. Some business owners purchase this coverage as a standalone policy, and others will include it as a bundle in their business owners policy. General liability insurance does not cover professional service mistakes, damage done to your own commercial property, or employees who qualify for workers’ compensation.

Synonyms for general liability insurance
There are some terms you might hear that are used interchangeably with general liability insurance. These synonyms are:

  • Business Liability Insurance: This type of insurance is a broader coverage that includes general liability, professional liability, and product liability, but is often used synonymously with general liability.
  • Commercial General Liability Insurance: There may be small discrepancies in the type of coverage you get when comparing commercial general liability insurance with general liability, but they are basically the same.
  • Commercial Liability Insurance: Commercial liability and general liability have slight differences in coverage as well but using the term “commercial liability” assumes a more professional tone.
  • General Liability Business Insurance: The word “business” can be used as a more professional way to say, “general liability insurance,” giving the company more clout.


Learn more about general liability insurance

When do I need to be aware of general liability insurance?

An example of someone who should understand general liability insurance is a business owner. This type of insurance protects his or her company when a claim is filed, but it also protects employees and clients in the case of an accident. This makes the workplace a more cohesive atmosphere overall.

What is important to know about general liability insurance?

General liability insurance is an important feature of running a business. There are some reasons it should always be a part of your insurance package:

  • Approximately 40% of small businesses will have to deal with at least one claim within the next 10 years, and an average settlement is around $75,000.
  • Some companies will ask you to provide a certificate of insurance before they will do business with you, so it’s an essential part of furthering those business relationships.
  • Some other types of liability insurance that pair well with general liability include commercial auto, commercial umbrella, employment practices liability, and management liability.