Every business faces risk, from accidental injuries to property damage to legal disputes that can cost thousands. General Liability Insurance is the foundation of any smart risk management strategy. It protects your company against the most common third-party claims and provides the stability to keep growing with confidence.

What Is General Liability Insurance?

General Liability Insurance, or commercial General Liability Insurance, protects your business against third-party claims of bodily injury, property damage, and certain personal or advertising injuries that occur in the course of doing business.

It’s one of the most widely held types of business coverage because it safeguards your company from events that can happen anywhere — in your office, at a client site, or even online. If a client trips at your office, a contractor damages a customer’s property, or a competitor claims your marketing is defamatory, General Liability coverage can help pay for medical expenses, repairs, legal defense, and settlements.

While not typically required by law, many landlords, clients, and investors require proof of coverage before doing business. For most companies, a General Liability policy is the first line of defense against everyday risks that could otherwise derail operations.

What General Liability Insurance Covers

General Liability coverage is designed for third-party claims, meaning it protects your company if someone outside your organization alleges harm. Core protections typically include:

• Bodily injury: Covers medical expenses, legal fees, and settlements if someone (not an employee) is injured due to your business operations.
• Property damage: Covers accidental damage your company causes to someone else’s property, such as a contractor breaking equipment or a water leak damaging a neighboring suite.
• Personal and advertising injury: Covers claims such as libel, slander, copyright infringement, or wrongful use of intellectual property in your marketing or content.
• Products and completed operations: Covers liability arising from your products or completed work that causes injury or damage after delivery or installation.
• Medical payments: Provides limited coverage for immediate medical expenses, regardless of fault, to help prevent lawsuits.

What General Liability Insurance Doesn’t Cover

While comprehensive, General Liability isn’t all-encompassing. Common exclusions include:

• Employee injuries – Covered under workers’ compensation.
• Damage to your own property – Covered under business property insurance or a Business Owners Policy (BOP).
• Professional mistakes or errors – Covered by Errors & Omissions (E&O) or professional liability insurance.
• Auto accidents – Covered under commercial auto or hired/non-owned auto insurance.
• Cyberattacks and data breaches – Covered by Cyber insurance.
• Intentional acts or contractual liabilities – Not covered unless explicitly endorsed.

Learn more about what General Liability Insurance covers.

How Much Does General Liability Insurance Cost?

The cost of General Liability Insurance depends on your company’s size, industry, and risk profile, not a single flat rate. A small professional services firm might pay less than a manufacturer or retail business with foot traffic and physical exposure.

Key factors influencing premiums include:

• Industry and operations: High-touch industries (construction, healthcare, retail) carry more risk than low-contact or digital-first businesses.
• Revenue and headcount: More customers and employees mean more opportunities for accidents.
• Location: Costs can vary based on regional litigation trends or claim frequency.
• Coverage limits and deductibles: Higher limits increase premiums, while modest deductibles can reduce them slightly.
• Claims history: A clean record can lead to lower premiums.
• Policy bundling: Combining General Liability with property coverage in a BOP can lower overall costs.

Ultimately, pricing depends on your needs but General Liability is often among the most affordable core coverages, especially considering the financial protection it provides.

Learn more about how much General Liability coverage costs.

How Much General Liability Coverage Do You Need?

A small business policy might include a $1 million per occurrence / $2 million aggregate limit, often written as “$1M/$2M.” But the right limits depend on your exposure and balancing affordability with solid protection.

When deciding, consider:

• Contract requirements: Clients, landlords, or partners may specify minimum coverage levels (often $1M or $2M per occurrence).
• Risk environment: Businesses that host events, handle valuable property, or interact with the public may need higher limits.
• Assets at stake: Your total business assets (or potential legal exposure) can guide how much protection you need.
• Growth trajectory: As you expand, revisit coverage annually to ensure it scales with your operations.

Some companies also purchase umbrella or excess liability coverage to add another layer of protection once base policy limits are reached.

Learn more about how much General Liability Insurance you need.

Who Needs General Liability Insurance?

Nearly every business benefits from General Liability coverage, especially those that:

• Have a physical location or office
• Work directly with clients or the public
• Sell products or provide services that could cause harm
• Sign contracts with landlords, vendors, or enterprise clients

From small startups to established SMBs, General Liability is a contractual must-have and a strategic safeguard. It’s foundational coverage for companies in technology, healthcare, professional services, retail, and beyond.

Examples of General Liability Claims

Here are some examples of incidents that General Liability Insurance may cover.

Slip-and-fall injury

A visitor trips on an uneven step at your office and breaks their wrist. Your General Liability Insurance covers their medical costs and legal defense when they file a claim.

Client property damage

While installing networking equipment, a contractor drops a tool that cracks a client’s glass desk. The policy covers repair costs and keeps the business relationship intact.

Product defect

A smart home device overheats and causes minor property damage. The General Liability policy covers the cost of repairs and defense expenses tied to the defective product claim.

Advertising injury

Your company publishes a marketing post that unintentionally defames a competitor. The insurer covers your defense and any settlement costs under personal and advertising injury coverage.

Why General Liability Insurance Matters

According to The Hartford, the average slip-and-fall claim costs about $20,000, and nearly 30% of small-business injuries stem from such incidents. Without insurance, even a single claim can drain working capital or disrupt cash flow.

Beyond covering claims, General Liability policies also provide legal defense — which can easily cost tens of thousands, even when a lawsuit is dismissed. Having coverage means your insurer handles the defense, allowing you to stay focused on your business.

For ambitious companies, General Liability Insurance isn’t just protection, it’s peace of mind. It signals credibility to clients and investors and provides the stability you need to take on bigger opportunities with confidence.

General Liability Insurance forms the backbone of a solid risk management plan. It’s the coverage that helps your business stay resilient, credible, and ready for whatever comes next.

Frequently Asked Questions

Is General Liability required by law?

Not usually, but it’s often required by contracts, leases, or licensing boards.

Does it cover employee injuries?

No. Employee injuries fall under workers’ compensation.

Does General Liability cover cyber or data breaches?

No. For data-related risks, you’ll need cyber liability insurance.

Can I get General Liability and property coverage together?

Yes, a Business Owners Policy (BOP) combines both and can be more cost-effective.

How often should I review my coverage?

At least annually, or whenever your business changes, such as new locations, more employees, or higher-value contracts.

Vouch Specialty Insurance Services, LLC (CA License #6004944) is a licensed insurance producer in states where it conducts business. A complete list of state licenses is available at vouch.us/legal/licenses. Insurance products are underwritten by various insurance carriers, not by Vouch. This material is for informational purposes only and does not create a binding contract or alter policy terms. Coverage availability, terms, and conditions vary by state and are subject to underwriting review and approval.

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