What is general liability insurance?
General liability insurance (commercial general liability, or CGL) protects a business against third-party claims of bodily injury, property damage, and advertising injury caused by the business's operations, products, or premises. It's typically the first policy a small business buys and is often required to sign a commercial lease or client contract.
General liability insurance — formally commercial general liability (CGL) — is the foundational business insurance policy. The Insurance Information Institute (III) describes it as coverage for a business's legal liability for bodily injury, property damage, and personal or advertising injury arising from its operations, products, or premises.
What general liability insurance covers
- Bodily injury: A customer slips and falls in your store, or a client is hurt on your job site.
- Property damage: Your work crew accidentally damages a client's property during a job.
- Products-completed operations: A product you sold or a job you completed causes injury or damage after the work is done.
- Personal and advertising injury: Claims of libel, slander, or copyright infringement in your marketing.
- Legal defense costs: Attorney fees and court costs if you're sued over a covered claim, even if the claim is later found meritless.
What it does NOT cover
General liability doesn't cover your own employees' injuries (that's workers' compensation), professional mistakes or negligent advice (that's professional liability / errors-and-omissions), your own business property or equipment (that's commercial property insurance), or your own vehicles (that's commercial auto). Most small businesses stack GL with one or two of these depending on their operations.
Key facts on general liability insurance
- A CGL policy pays defense costs and damages, up to policy limits, for covered third-party bodily injury or property damage claims. — III — Commercial General Liability Insurance
- The U.S. Small Business Administration lists general liability as the baseline coverage most small businesses need before signing a commercial lease or major client contract. — SBA — Insure Your Business
Key takeaways
- General liability covers third-party bodily injury, property damage, and advertising injury claims against your business.
- It's usually the first policy a small business buys, and commercial leases + client contracts often require proof of it.
- It does not cover employee injuries, professional errors, or your own property — those need separate policies.
- Premiums vary widely by industry risk, revenue, and coverage limits — get quotes tailored to your specific operations.
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