Imagine this: A customer slips and falls in your store. A client sues you for copyright infringement. A faulty product damages someone’s property. Without general liability insurance (GLI), these scenarios could bankrupt your business.
In this guide, we’ll break down everything you need to know—from what GLI covers to how much it costs—so you can protect your business without overpaying.
What Is General Liability Insurance?
General liability insurance (GLI) is a policy that protects your business from:
✔ Bodily injury claims (e.g., a customer gets hurt on your property)
✔ Property damage (e.g., you accidentally break a client’s laptop)
✔ Personal & advertising injury (e.g., defamation or copyright issues)
Who needs it? Almost every business—especially those with:
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Physical locations (retail stores, offices)
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Client interactions (contractors, consultants)
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Public exposure (advertising, social media)
What Does General Liability Insurance Cover?
1. Bodily Injury Liability
Covers medical bills and legal fees if someone gets hurt because of your business.
Example: A delivery person trips over a loose cable in your office and breaks an arm.
2. Property Damage Liability
Pays for repairs or replacements if your business damages someone else’s property.
Example: A plumber accidentally floods a client’s home.
3. Personal & Advertising Injury
Protects against lawsuits over:
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Defamation (false statements harming someone’s reputation)
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Copyright infringement (using unlicensed images in ads)
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False advertising claims
Note: GLI does not cover employee injuries (that’s workers’ comp) or professional mistakes (that’s E&O insurance).
What’s NOT Covered by General Liability Insurance?
GLI is broad but has key exclusions:
✖ Employee injuries → Requires workers’ compensation insurance
✖ Professional errors → Requires errors & omissions (E&O) insurance
✖ Auto accidents → Requires commercial auto insurance
✖ Intentional damage or criminal acts
Smart Move: Consider a Business Owner’s Policy (BOP)—it bundles GLI with property insurance at a discount.
How Much Does General Liability Insurance Cost?
Costs vary based on:
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Industry risk (Construction pays more than accounting)
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Business size (More employees = higher premiums)
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Location (Urban areas often cost more)
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Coverage limits ($1M per incident is standard)
Average Costs:
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Small businesses: $500–$1,200/year
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High-risk businesses: $2,000+/year
Tip: Pay annually (not monthly) to save ~10% on premiums.
How to Choose the Right Policy
1. Assess Your Risks
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Do clients visit your location? → Prioritize slip-and-fall coverage
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Run ads or social media? → Ensure strong personal/advertising injury coverage
2. Compare Quotes
Get at least 3–5 quotes from insurers like:
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Nationwide
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Hiscox
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The Hartford
3. Check the Insurer’s Reputation
Look for:
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AM Best “A” or higher ratings
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Few customer complaints (check BBB or Trustpilot)
4. Review Policy Limits
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Per-occurrence limit: Max payout per incident
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Aggregate limit: Max payout per year
Example: A $1M/$2M policy = $1M per claim, max $2M yearly.
3 Common Mistakes to Avoid
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Underinsuring → A single lawsuit can exceed low limits
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Ignoring Exclusions → GLI won’t cover everything
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Not Updating Coverage → Expanding your business? Adjust your policy!
Final Thoughts: Better Safe Than Sued
General liability insurance isn’t just a “nice-to-have”—it’s a financial lifeline for your business. A single claim could cost thousands (or millions) without it.
Next Steps:
1️⃣ Get quotes from multiple insurers
2️⃣ Ask about bundling discounts (e.g., BOPs)
3️⃣ Review your policy annually
For more business tips, visit Akolay Book News.