What Is General Liability Insurance?
General liability (GL) insurance is the foundation of most commercial insurance programs. Often called "slip-and-fall" insurance, it protects businesses against financial losses from third-party claims of bodily injury, property damage, and personal/advertising injury.
What Does It Cover?
Bodily Injury
If a customer, vendor, or any non-employee is physically injured on your premises or as a result of your operations, GL covers:
- Medical expenses
- Legal defense costs
- Settlements or judgments
Example: A customer trips over a display in your retail store and breaks their wrist. GL covers their medical bills and your legal defense if they sue.
Property Damage
If your business operations damage someone else's property:
Example: A plumber accidentally causes water damage to a client's home. GL covers the cost to repair the damage and any resulting lawsuit.
Personal & Advertising Injury
This covers non-physical harms like:
- Libel and slander
- Copyright infringement in advertising
- Wrongful eviction
What It Does NOT Cover
GL insurance does not cover:
- Employee injuries (that's workers' comp)
- Professional mistakes/negligence (that's E&O)
- Your own property damage (that's commercial property)
- Vehicle accidents (that's commercial auto)
- Cyber attacks and data breaches (that's cyber liability)
How Much Does It Cost?
| Risk Level | Industry Examples | Typical Annual Cost |
|---|---|---|
| Low | Consulting, IT, Photography | $300–$800 |
| Medium | Retail, Cleaning, Fitness | $600–$1,500 |
| High | Construction, Restaurants, Roofing | $1,000–$3,500+ |
Key cost factors: your industry, state, revenue, number of employees, and claims history.
Who Needs It?
Almost every business benefits from GL, but it's essential for:
- Any business with a physical location visitors can access
- Contractors and service providers working at client sites
- Businesses required to show proof of insurance for contracts or leases
Choosing the Right Limits
Most small businesses start with a $1M per occurrence / $2M aggregate policy. Higher-risk industries or businesses with large contracts may need $5M or more.