What Every Business Owner Should Know About General Liability
GL is the foundation of most small business coverage and one of the most commonly misunderstood policies in the market. Here's what it actually does for you.
General liability (GL) insurance is the foundation of most small business coverage and one of the most commonly misunderstood policies in the market. Many business owners buy it because a landlord or client requires it, but don't actually know what it does or doesn't cover. Here's a plain-English breakdown.
What GL Insurance Actually Does
General liability protects your business if a third party (a customer, vendor, or bystander) sues you for bodily injury or property damage caused by your business operations, products, or completed work. It covers legal defense costs, settlements, and court judgments. Without it, a single lawsuit could threaten everything you've built.
Key point: GL is third-party coverage. It protects others from harm caused by your business, not your own property or internal operations costs.
What GL Covers and What It Doesn't
Covered:
- →Third-party bodily injury (a customer slips and falls at your location)
- →Third-party property damage (your crew accidentally damages a client's property)
- →Personal and advertising injury (accidental slander, copyright issues in your marketing)
- →Legal defense costs, even if the claim against you turns out to be unfounded
Not covered:
- ✗Damage to your own business property (that's what commercial property insurance covers)
- ✗Employee injuries on the job (that's workers' compensation)
- ✗Errors in professional advice or services (that's E&O / professional liability)
- ✗Intentional acts, fraud, or criminal conduct
How Much Coverage Do You Actually Need?
Most small businesses start with $1M per occurrence / $2M aggregate. But your specific needs depend on your industry, revenue, the size of your contracts, and requirements from clients or commercial landlords. Contractors bidding on public projects may need higher limits or additional insured endorsements to qualify.
Common triggers that increase your coverage needs: signing a commercial lease, contracts over $100K, performing work at customer locations, or operating in higher-risk industries like construction, food service, or healthcare support.
Real-World Situations Where GL Saves You
- →A customer trips and falls at your storefront and files a medical damages claim
- →You complete a renovation and the client later claims your crew caused water damage
- →A competitor claims your advertising copy infringed on their materials
- →A product you sold causes injury to a third party after it leaves your hands
At TMI Agency, we take time to understand your business before recommending coverage limits. We make sure your policy meets contract requirements, protects you from everyday risks, and doesn't leave gaps you didn't know existed. Contact us for a no-pressure coverage review.
Ready to get your business properly covered?
We help business owners find the right GL coverage. No jargon, no pressure.