General liability insurance for the claims customers and clients bring.
The policy behind most certificates of insurance, in plain terms: what it pays, where it stops, and how limits and endorsements work. A licensed agent can line up quotes when you want them.
Quick answer: General liability insurance responds when someone says your business injured them or damaged their property, including the cost of defending that claim, subject to the policy’s terms, limits, and exclusions. Most policies also include products and completed operations, personal and advertising injury, and small medical payments. Your own property, your employees’ injuries, your vehicles, and professional mistakes sit on separate policies.
Most liability claims against a small business start the same way: someone says your premises, your product, your crew, or your advertising hurt them. A commercial general liability policy, often shortened to CGL, is built to answer that claim. The insurer typically investigates, hires and pays for your defense, and pays a settlement or judgment up to your limits. On the standard occurrence form, defense costs are paid on top of the limits rather than out of them, though some policies differ, so that line on yours is worth a look.
The parts of a general liability policy
The standard form groups these into three coverages: bodily injury and property damage (Coverage A), personal and advertising injury (Coverage B), and medical payments (Coverage C). Your declarations page shows the limits, including a shared each-occurrence limit for bodily injury and property damage and a separate aggregate for products and completed operations.
| Coverage | What it answers | A claim it might see |
|---|---|---|
| Bodily injury | Physical injury to someone who isn't your employee, caused by your premises or operations | A delivery driver trips over a hose at your shop |
| Property damage | Physical damage to property that belongs to someone else | Your painter's ladder cracks a client's window |
| Products and completed operations | Injury or damage traced to something you sold or work you finished | A railing you installed gives way months later |
| Personal and advertising injury | Libel, slander, wrongful eviction, or using another company's advertising idea | A competitor says your flyer copied their slogan |
| Medical payments | Modest medical bills for an injured guest, usually without anyone proving fault | A visitor needs an urgent-care visit after a fall |
| Damage to rented premises | Fire damage you cause to space you rent from a landlord | A toaster fire scorches your leased storefront |
What general liability usually handles, and what it leaves out
Usually handled
- Slip-and-fall injuries at your location or a job site
- Damage your work causes to a customer's property
- Injuries traced to a product you sold or made
- Legal defense for a covered lawsuit, even a groundless one
- Libel, slander, and advertising injury claims
Usually not handled
- Injuries to your own employees (workers' comp)
- Your own building, tools, or inventory (commercial property or a BOP)
- Cars and trucks used for the business (commercial auto)
- Errors in professional advice or design (errors and omissions)
- Redoing your own faulty work, as opposed to the damage it causes
Three endorsements contracts ask for most
Landlords, general contractors, and clients often write these into agreements. Each one changes who the policy protects or how it responds, and each is added by endorsement.
Additional insured
Extends your policy’s protection to another party, such as a landlord or general contractor, for claims arising from your work for them. It’s the most common request on a certificate of insurance.
Waiver of subrogation
Gives up your insurer’s right to recover a paid claim from the other party to the contract. Job-site agreements and commercial leases frequently ask for it.
Primary and noncontributory
Means your policy pays first and won’t ask the other party’s insurer to share the loss. It’s often requested alongside additional insured status.
General liability rates vary by location and by trade
Carriers price general liability by your class code, revenue or payroll, the limits you choose, your claims history, and where you operate, and many policies are adjusted after an annual premium audit. Choose your state for local details.
What contractors and owners ask us about general liability.
Is general liability insurance required by law?
For most businesses, no statute requires it, though some licenses carry their own insurance rules. In practice the requirement tends to come from contracts: commercial leases, general contractors, property managers, and event venues often ask for proof of coverage before work starts.
How much general liability coverage do businesses usually carry?
A common structure is $1 million per occurrence with a $2 million general aggregate, largely because that’s what many leases and contracts ask for. Larger contracts or higher-risk work may call for more, often through an umbrella policy on top. Your contracts are the place to start.
What's the difference between occurrence and claims-made coverage?
An occurrence policy responds to injury or damage that happens while it’s active, even if the claim arrives years later. A claims-made policy responds only to claims reported while it’s active, so switching carriers or closing a business can leave a gap unless tail coverage is added. Most small-business general liability is written on an occurrence basis.
Does general liability cover my subcontractors?
It depends on the policy and the contract. Many carriers expect subcontractors to carry their own general liability and to name you as additional insured. Uninsured subs can be added to your premium at audit, which is why collecting their certificates before work starts comes up so often.
What is a certificate of insurance?
A one-page summary, usually on the ACORD 25 form, that shows your policy numbers, limits, and dates and lists whoever asked for it as certificate holder. It shows coverage exists, but on its own it doesn’t add anyone to your policy. Additional insured status comes from an endorsement.
Does general liability pay to fix my own work?
Typically not. Standard forms exclude damage to your own work once it’s finished, though there’s an exception when a subcontractor did the damaged work. Damage your work causes to other property or to people is the part the policy addresses, subject to its terms. That distinction comes up often in construction claims.
NPN #20649362 · Rock Meadow Insurance Services · Last updated
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