General liability insurance can provide protection against the resulting expenses if your business is held responsible for injuring a third party or damaging their property. Although valuable, this coverage is not typically required by any state or federal law. However, there are many circumstances where you might need general liability insurance. Keep reading to learn more.
To Work in Certain Industries 
In some cases, you may have to carry general liability insurance if your business belongs to a certain industry. Generally speaking, if you deal with people on a daily basis throughout your business’s operations, you will likely need general liability insurance.
In addition, you may also need general liability insurance to obtain certain licenses to operate. Be sure to check your industry’s requirements when looking to start a business or get a license in a certain field, as you may need general liability coverage, among other insurance policies.
Who Needs General Liability Insurance?
Even without a requirement, essentially every business needs general liability insurance—including restaurants, retail stores, offices and more. After all, practically every business that has a physical location or frequently interacts with others faces general liability exposures.
General liability insurance can offer much-needed protection amid costly accidents. If you invite customers into your commercial property and someone is injured, for example, this coverage can help cover the injured customer’s medical payments and any associated legal expenses.
What Does General Liability Insurance Cover?
General liability insurance typically offers the following forms of coverage:
- Bodily injury liability coverage—This coverage can compensate expenses stemming from injuries that a third party may face on your business’s property. Namely, it can cover medical costs related to such injuries.
- Property damage liability coverage—This coverage can reimburse costs related property damage that a third party may experience due to your business’s actions.
General liability insurance can also help protect your business against lawsuit costs related to third-party bodily injuries or property damage—such as defense costs, court fees and settlement expenses.
What Does General Liability Insurance Not Cover?
General liability insurance is intended to cover non-professional, negligent accidents. Apart from general liability insurance, your business may need to secure additional coverage to protect against other liability concerns.
Be sure to ask your insurance agent about extra liability coverage your business may need, such as:
- Professional liability coverage—Professional liability insurance covers claims regarding professional negligence. If your business or employees offer a specialized or professional service, you will need professional liability insurance. This may be required for you to receive certain professional licenses.
- Liquor liability coverage—Liquor liability insurance covers claims against the business concerning the selling or manufacturing of alcohol. If someone purchases alcohol from your business, becomes intoxicated and gets into a fight which causes injuries, for example, liquor liability insurance can protect you against a related lawsuit. This insurance is often required for businesses that plan on selling or manufacturing alcohol or to obtain a liquor license.
- Directors and officers liability (D&O) coverage—D&O insurance covers key employees of the business in case of a claim regarding their activities on a board of directors or as a representative of the business. This insurance can cover claims such as fraud, misrepresentation, mismanagement and more.
How Much Is General Liability Insurance?
The cost of general liability insurance varies depending on several factors—including your location, industry, claims history, coverage limits and deductible.
Consult a trusted insurance agent for more information on general liability coverage. No two businesses are the same and you will need a policy tailored for your business.