What General Liability Insurance Does and Doesn’t Cover

General liability insurance can be a crucial financial safeguard for businesses against various claims arising during normal operations. Understanding what this insurance covers—and what it doesn’t—is essential for any business owner.

What General Liability Insurance Covers

General liability insurance typically covers the following:

• Third-party bodily injury—If a customer or third party is injured on your business premises or because of your business activities, general liability insurance can help cover medical expenses and legal fees associated with the injury.
• Third-party property damage—This insurance can financially protect your business if it causes damage to someone else’s property. For example, if a contractor accidentally damages a client’s building, the insurance may help cover repair costs.
• Personal and advertising injury—Claims related to defamation, copyright infringement or deceptive advertising practices are covered under general liability insurance. This may include legal defense costs and any settlements or judgments.
• Legal defense costs—If your business is sued, general liability insurance may help cover the costs of legal defense, including attorney fees, court costs and settlements.

What General Liability Insurance Doesn’t Cover

General liability insurance typically does not cover the following:

• Professional errors—General liability insurance does not cover claims related to professional mistakes or negligence. For these types of claims, businesses need professional liability insurance.
• Employee injuries—Injuries sustained by employees while working are not covered by general liability insurance. Workers’ compensation insurance is required to cover these types of claims.
• Intentional acts—Any intentional acts of harm or damage caused by the business or its employees are excluded from coverage. Insurance policies typically cover only accidental or unintentional incidents.
• Automobile accidents—General liability insurance does not cover accidents involving company vehicles. Businesses need commercial auto insurance for these types of incidents.

Learn More

For general liability insurance guidance near you, contact Clearwater Partners.

This blog is intended for informational and educational use only. It is not exhaustive and should not be construed as legal advice. Please contact your insurance professional for further information.