A Complete Guide to General Liability Insurance

a complete guide to general liability insurance
A general liability insurance policy helps protect your small business from various third-party liability claims. Learn how to stay protected in this post.

What Is General Liability Insurance?

A general liability insurance policy helps protect your small business from various third-party liability claims. This includes coverage for the cost of an attorney, settlement payments, and more. It is also known as general liability business insurance or business liability insurance.

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What does general liability insurance cover?

General liability insurance will cover your business for claims of alleged bodily injury, property damage, advertising and marketing issues (for example, a typographical error advertising the wrong price of a service). A CGL will not give you coverage for any claims of professional negligence. If you want coverage for this, you’ll need to purchase E&O coverage. 

lawsuit without having general liability insurance

Who Needs to Buy General Liability Insurance?

Anyone who owns a business should have general liability insurance in place. The cost of unexpected lawsuits can put severe financial stress on a company of any size.

Buying CGL might also be mandated or required by a landlord or client before you can do business with them. In some cases, it can help you secure larger contracts with customers desiring to hire companies holding proof of liability insurance. 

Whether you work from home or work with the general public, there are always likely to be third-party risks you face as part of your operational activities.

Without general liability insurance, potential customers may take the absence of a general liability policy to mean you won’t take their project seriously. This reason alone makes general liability insurance a significant asset for your small business.

General liability insurance protects you and your business, as well as your finances and personal assets. Having general liability coverage is not a luxury- it is a matter of “when” not “if” your small business will need it. 

How Much Commercial Liability Insurance Should You Buy?

Every business is different and will have its own needs, and there is not a one size fits all approach to buying general liability insurance for your business.

As we’ve mentioned, clients and landlords might impose a request for a specific dollar amount of liability coverage. However, you should assess your risks and needs with a CGL insurance agent to establish typical coverage limits for your niche.  

During the initial conversation, we would evaluate your individual risk profile, and consider the likelihood of each, along with a potential cost of a lawsuit, property damage, or medical expenses. 

What factors impact the cost of a commercial general liability policy?

The dollar amount of coverage you buy will directly impact the cost of a CGL policy.

However, other factors need to be considered. These are:

  • Company size – the more employees you have, the more liability coverage you will need.
  • The type of work you do – the sector you work in will impact your policy’s cost.
  • State Requirements – find out what is required by your state as a minimum.
  • The particular projects you work on and the clients you work for – pricier projects or government-contracted projects will likely require more general liability coverage than other projects. 
best commercial general liability insurance

To help you assess your business’s risks and the potential costs of those risks, meeting with a licensed agent will help ensure you get the best level of general liability coverage for your company. Our commercial experts are always here to answer any questions, or crunch the numbers to help you find the best general liability insurance for your business.  Contact us now.

Do contractors need to buy commercial general liability coverage?

If you work as a 1099 contractor, you still need to protect yourself in the same way any other business entity would. Liability claims can be costly, and as a contractor, you can be sued for the same amount as any business.

Without this coverage, you will need to utilize savings or personal assets to cover any costs associated with a claim. For most contractors, this financial burden would be difficult to sustain. 

What is covered by an independent contractors liability policy?

Independent contractors’ liability insurance is a type of CGL. It provides coverage for advertising injury, reputational harm, bodily injury, property damage, and more. 

Which insurers offer the best commercial liability insurance coverage?

the hartford general liability insurance

The Hartford — The Hartford can offer small business insurance policies and industry-specific packages, with more coverage inclusions than competitors.

The Hartford’s team of small commercial lines specialists earns high ratings in terms of customer service and claims support.

hiscox general liability insurance logo

Hiscox — Hiscox is excellent for small businesses– think five or fewer employees. Hiscox offers a wide range of coverage types for a variety of industries.

For companies operating out of the home, Hiscox offers discounts on both general liability policies and business owners’ policies. 

nationwide commercial insurance

Nationwide — Nationwide excels in its safety resources and offers all the necessary policies small business owners need– from general liability to workers’ compensation to professional liability and more.

Nationwide also provides business owner’s policies with a higher revenue cut off than most insurers ($5 million per year with Nationwide versus $1 million cut off with many insurers). 

hanover insurance commercial insurance

The Hanover — The Hanover specializes in small and medium-sized businesses, especially in technology industries. The Hanover offers coverage to more than 500 business types in 12 different industries.

The Hanover offers a professional liability product that combines cyber liability coverage to a variety of tech companies and a commercial package including property insurance, general liability insurance, loss of income and extra expense coverage, data breach coverage, and additional endorsement options depending upon the industry. 

liberty mutual commercial insurance

Liberty Mutual — Liberty Mutual has over 100 years of experience working with businesses of all sizes, types, and industries.

Liberty Mutual offers industry-specific risk management resources, making it an excellent option for manufacturers looking for general liability insurance.

Liberty Mutual provides training videos and other safety tools for small manufacturers. These videos and tools serve to help reduce claims and potentially reduce overall costs in that regard.

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