What Does General Liability Insurance Coverage Include?

No business is completely safe from unexpected risks. A single lawsuit, accident, or mistake can lead to financial losses that many businesses aren't prepared to handle.

Even a minor incident—like a customer slipping in your store or accidental property damage—can result in costly legal claims. 

As businesses become more aware of these risks, the demand for liability coverage continues to grow. In fact, the general liability insurance market is projected to reach $217.60 billion by 2029, highlighting the increasing need for financial protection against unexpected claims.

In this post, we’ll break down what general liability insurance is, what it covers (and doesn’t cover), why it’s essential for businesses, and how much it costs.

What is General Liability Insurance?

General Liability Insurance (GLI) is a business insurance policy that protects your company from financial losses due to lawsuits related to bodily injury, property damage, or advertising harm.

If a customer, client, or third party sues your business for these reasons, GLI helps cover legal fees, medical costs, and settlements.

Who Needs General Liability Insurance?

General Liability Insurance is important for businesses of all sizes, but it’s especially important for those that:

• Interact with customers, clients, or vendors in person.
• Own or lease a physical space, such as an office, store, or warehouse.
• Provide services on client property, like contractors or landscapers.
• Advertise through print, digital, or social media.
• Manufacture, sell, or distribute physical products..

What Does General Liability Insurance Cover?

General liability insurance covers claims from third parties—such as customers, vendors, or clients—who experience injury, property damage, or reputational harm because of your business.

Below are the key protections general liability insurance provides:

1. Bodily Injury

If a customer, client, or visitor gets injured at your business location or due to your operations, GLI helps cover:

• Medical expenses: Pays for hospital bills, ambulance fees, and follow-up treatments.
• Legal fees: Covers attorney costs if the injured party sues your business.
• Settlements or judgments: Helps pay for court-ordered damages if your business is found responsible.

Example: A shopper slips on a wet floor in your store and breaks their wrist. General liability insurance covers their medical invoices and any lawsuit they file against your business.

2. Property Damage

If your business accidentally damages someone else's property, GLI covers the cost of repairs or replacement. This applies whether the damage happens at your business location or on a client's property.

• Repair costs: Pays to fix damaged items, equipment, or buildings.
• Replacement costs: Covers the cost of replacing property that cannot be repaired.

Example: A contractor accidentally breaks a client’s expensive glass table while working on a home renovation. General liability insurance covers the repair or replacement cost.

3. Legal Defense Costs

Even if your business is not at fault, lawsuits can be expensive to fight. General liability insurance helps cover:

• Attorney fees: Pays for legal representation in court.
• Court expenses: Covers filing fees, expert witnesses, and investigation costs.
• Settlements or damages: Pays if your business loses a lawsuit or agrees to a settlement.

Example: A customer claims they got food poisoning from your restaurant and sues. Even if your business did nothing wrong, you still need to pay for legal defence. GLI helps cover those costs.

4. Advertising Injury

Your business can face lawsuits for using copyrighted materials or making misleading claims in advertisements. General liability insurance covers:

• Copyright infringement: Protects if your business accidentally uses another company's logo, slogan, or images without permission.
• Libel or slander: Covers legal costs if a competitor claims your business made false or damaging statements.

Example: A photographer sues your company for using their image in an ad without permission. General liability insurance helps pay for legal expenses and potential damages.

5. Reputational Harm

If your business is accused of harming another company’s reputation, you may face a lawsuit. General liability insurance helps cover:

• Defamation lawsuits: Pays for legal costs if another business sues for false statements.
• Public relations costs: Helps with crisis management to restore your business reputation.

Example: Your business publishes an advertisement that unintentionally includes false information about a competitor, leading to a lawsuit. General liability insurance helps cover your legal defence.

General liability insurance ensures that your business can resume operating without the financial strain of lawsuits, settlements, or property damage claims.

What General Liability Insurance Doesn't Cover?

General liability insurance (GLI) provides broad protection, but it does not cover every type of risk your business might face. Understanding these exclusions helps you avoid coverage gaps and determine if you need additional insurance policies.

Here’s what general liability insurance does not cover:

1. Employee Injuries

GLI does not cover medical expenses or lost wages if your employees get injured while working. Businesses need workers' compensation insurance to cover:

• Medical treatment: Pays for hospital bills, rehabilitation, and doctor visits.
• Lost wages: Compensates employees who miss work due to injuries.
• Disability benefits: Provides financial support if an employee is permanently injured.

2. Damage To Your Own Business Property

GLI covers damage to other people’s property but does not protect your office, equipment, or inventory. Businesses need commercial property insurance to cover:

• Fire damage: Pays for repairs if a fire damages your office or warehouse.
• Theft or vandalism: Covers stolen or damaged business property.
• Natural disasters: Provides protection from storms, floods, and earthquakes (depending on the policy).

3. Professional Errors & Negligence

GLI does not cover financial losses caused by mistakes in your professional services. Businesses offering consulting, financial, legal, or medical services need professional liability insurance (also called errors & omissions insurance) to cover:

• Client lawsuits: Protects against claims of negligence, inaccurate advice, or poor service.
• Financial losses: Covers damages if a mistake causes a client to lose money.

Example: An accountant miscalculates a company’s tax return, leading to IRS penalties. General liability insurance won’t cover the lawsuit—professional liability insurance does.

4. Auto Accidents Involving Business Vehicles

GLI does not cover accidents involving vehicles used for business purposes. Businesses need commercial auto insurance to cover:

• Vehicle repairs: Pays for damage to company cars, trucks, or vans.
• Medical expenses: Covers injuries to employees or other drivers.
• Liability claims: Protects against lawsuits from accidents caused by your employees.

Example: A delivery driver crashes into another car while making a shipment. General liability insurance won’t cover the damages—commercial auto insurance does.

5. Cyber Attacks & Data Breaches

GLI does not protect businesses from losses caused by hacking, data breaches, or cybercrimes. Companies that store customer data or conduct business online need cyber liability insurance to cover:

• Data recovery: Pays for restoring lost or stolen customer information.
• Legal costs: Covers lawsuits from affected customers.
• Notification expenses: Helps inform customers of a breach, as required by law.

Example: Hackers steal customer credit card data from an online store. General liability insurance won’t cover the costs—cyber liability insurance does.

6. Intentional Harm Or Illegal Acts

GLI does not cover claims if your business intentionally causes harm or breaks the law. This includes:

• Fraud: Misleading customers or falsifying financial records.
• Assault or harassment: Lawsuits related to workplace misconduct.
• Discrimination: Legal claims from unfair hiring or firing practices.

Example: A business owner knowingly sells defective products that harm customers. General liability insurance won’t cover the lawsuit because the harm was intentional.

Choosing the right liability coverage can be overwhelming, especially when different risks require different policies. At TWFG Khan Insurance, we simplify the process by helping you find the right mix of coverage to fully protect your business.

Whether you need general liability, professional liability, commercial auto, or cyber liability insurance, we provide customized policies tailored to your industry. Our team works directly with top-rated carriers to secure comprehensive coverage at competitive rates.

How Much Does General Liability Insurance Cost?

The cost of general liability insurance depends on several factors, including your business type, size, and risk level. Most small businesses pay between $40 and $70 per month, but costs vary significantly based on coverage limits and industry-specific risks.

Understanding these cost factors can help you find the right coverage without overpaying. The factors that affect general liability insurance costs:

• Industry and risk level: Businesses in high-risk industries, such as construction and manufacturing, pay more because they face a higher chance of accidents and lawsuits.
• Business size and revenue: Larger businesses or those with higher revenue usually pay more because their operations involve more people and higher risks.
• Coverage limits: Standard policies start with $1 million per occurrence and $2 million aggregate, but businesses needing higher limits will pay more.
• Claims history: Businesses with past liability claims or lawsuits may face higher premiums due to increased risk.
• Business location: Insurance costs can be higher in states or cities with more lawsuits or expensive legal settlements.

Average General Liability Insurance Costs by Industry

How Can You Lower Your General Liability Insurance Costs?

• Bundle policies: Combine general liability with other policies, like a business owner’s policy (BOP), to save on premiums.
• Reduce risks: Implement workplace safety programs and train employees to prevent accidents and liability claims.
• Choose the right coverage limits: Avoid overpaying for unnecessary coverage while ensuring you have enough protection.
• Compare quotes: Work with an insurance expert like TWFG Khan Insurance to find the best rates and coverage options.

Get the Right General Liability Insurance With TWFG Khan Insurance

Finding the right general liability insurance can feel overwhelming, but you don’t have to do it alone. At TWFG Khan Insurance, we specialize in helping businesses like yours secure the right coverage to protect against lawsuits, accidents, and financial risks.

Here's why businesses choose TWFG Khan Insurance:

• Customized coverage: Every business faces unique risks, and a one-size-fits-all policy will not provide complete protection. We take the time to understand your operations, industry, and potential liabilities to build a policy that meets your specific needs.
• Access to top carriers: We partner with highly rated insurance providers, ensuring you get competitive rates and strong coverage. Our relationships with multiple carriers allow us to find the best options without compromising on quality.
• Expert guidance: Insurance policies can be complex, and choosing the right coverage can be confusing. Our experienced team explains your options clearly, helping you make informed decisions that keep your business fully protected.
• Fast and hassle-free quotes: We know time is valuable. That's why we simplify the process, providing quick, accurate quotes with minimal paperwork. Our goal is to get your business covered without unnecessary delays.

No matter your industry, having the right liability insurance can save your business from costly lawsuits and unexpected claims. Get a quote with us and protect your business today with a customized general liability policy from TWFG Khan Insurance.