What Is General Liability Insurance? (2024)

FAQs

Is general liability worth it? ›

Your GLI policy can help pay for your legal fees and settlement costs. Without general liability insurance coverage, your business would have to pay out of pocket for costly claims that could come up during normal business operations.

Comprehensive general liability insurance is an outdated term for general liability insurance. Another common name for general liability coverage is commercial general liability (CGL) insurance. It helps protect your business from claims that it caused: Bodily injuries.

General liability insurance helps protect you from claims that your business caused bodily injury or property damage. It can also protect you if someone sues you for advertising injury. Commercial property insurance covers your business' physical location and equipment, whether you own or lease it.

Individual: Named individual and their spouse. Partnership or Joint Venture: Named partnership, named joint venture, partners, members, and their spouse. Limited Liability Company: Named LLC, members, and managers. Organization (Corporation): Named entity, executive officers, directors, and stockholders.

On average, an insurance policy that offers coverage for up to $2 million can cost about $30 a month in premiums.

A $5 million umbrella policy costs around $375 to $525 per year, on average. Every policyholder's umbrella insurance premium will vary based on their personal risk factors, so individuals who own more cars or properties will be more expensive to insure, as will people who are particularly likely to be sued.

When an insurance contract covers multiple parties, cross-liability provides coverage for both parties if one makes a claim against the other. Cross-liability coverage treats the different parties—covered under the same contract—as if they have their own separate policies.

So, if you live in a location with a high level of theft, weather-related damage or other comprehensive claims, your insurer may compensate for the added risk by raising your comprehensive insurance premiums. Your comprehensive premiums also rise when your insurer raises rates across all types of coverage.

General liability covers physical risks, such as bodily injuries and property damage. Professional liability insurance covers more abstract risks, such as errors and omissions in the services your business provides.

If your business is sued for errors made, giving bad advice, not meeting deadlines, or any other type of misstep that could have negatively impacted their partners or customers financially, professional liability insurance will protect you.

Why should a business have liability insurance? ›

As a general rule, you should insure against things you wouldn't be able to pay for on your own. This coverage protects against financial loss as the result of bodily injury, property damage, medical expenses, libel, slander, defending lawsuits, and settlement bonds or judgments.

Business liability insurance protects your small business if you're sued for bodily injury, property damage or other type of loss during normal business operations. This type of business insurance is also known as general liability insurance or commercial general liability insurance.

Under the CGL policy, a corporate parent is not afforded coverage as an insured. Subsidiaries are afforded coverage in limited instances.

Casualty insurance comprises various policy types, including auto insurance, homeowners/condo/renters insurance, burglary and theft insurance, workers' compensation, commercial general liability insurance, public liability, pollution liability, and contaminated product insurance.

General liability insurance may help cover repair or replacement costs if your business accidently damages someone else's property. You might also feel better and could have increased peace of mind knowing your business may be covered just in case an accident happens.

Also known as business liability insurance, general liability insurance protects you and your business from “general” claims involving bodily injuries and property damage. Almost every business has a need for general liability insurance.

Some large businesses may choose to self-insure to save money and control costs for their commercial property, auto and general liability coverages.

Under an occurrence policy, the occurrence of injury or damage is the trigger; liability will be covered under that policy if the injury or damage occurred during the policy period. Under a claims-made policy, the making of a claim triggers coverage.