General liability insurance refers to a type of insurance coverage designed to provide financial protection for businesses in the event that they cause harm or are accused of causing harm to individuals or their property.

No matter the size or type of business, it is usually necessary to have general liability insurance coverage. This type of insurance can be purchased from any major commercial insurance company, either as a standalone policy or as part of a business owner’s policy.

Here are some of the best options for small-business owners to get general liability insurance, as well as how it works and additional details on coverage.

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What is General Liability Insurance?

General Liability insurance provides coverage for claims made by third parties for injuries or property damage. This type of insurance is crucial for safeguarding a company’s financial assets in case of a lawsuit, making it a vital component of risk management strategies.

General Liability Insurance is an essential type of coverage that offers great protection for businesses facing lawsuits. It does not, however, protect against damage to the insured company’s property perse.

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What Does General Liability Insurance Cover?

General liability insurance is a form of coverage that assists in protecting businesses from the financial burden of potential claims that may arise during their everyday operations. Without this insurance, businesses would be responsible for paying these costs themselves.

A general liability insurance policy can help cover claims that your business caused:

• Third-party property damage
  • If you or your employees provide services at a client’s residence, there is a possibility that your business may cause damage to their property. By obtaining property damage liability coverage, you can ensure that the costs of repairing or replacing someone else’s belongings, which were damaged by your business, are covered.
• Advertising injury
  • If your business uses someone’s photo in your advertisements without their permission, you can be sued for copyright infringement. This means that a photographer has the right to take legal action against you.
• Third-party bodily injury
  • In the event that a customer sustains an injury from slipping and falling while at your store, they have the option to file a lawsuit against your business. Fortunately, your insurance policy provides coverage for bodily injury liability, which can assist in covering the medical expenses incurred by the customer.
• Reputational harm
  • If someone decides to take legal action against your business due to defamatory statements made by you or your employees, general liability insurance can provide coverage for the expenses incurred in defending your business in court.

It is important to note that general liability insurance does not cover all types of claims. For instance, it does not offer assistance to businesses facing claims related to:

• Employees who experience injuries or illnesses while on the job may be eligible for coverage through workers’ compensation insurance. This type of insurance can assist in covering their medical expenses and any ongoing care costs they may incur.
• If there is any harm caused to your business property, you can rely on commercial property insurance to provide assistance.
• Professional liability insurance provides coverage for mistakes made in the professional services offered by your business.

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What Are the Types of Liability Insurance?

In addition to GLI, there are other types of liability insurance that most insurance companies recommend:

• Employment practices liability insurance
  • General liability insurance is a type of coverage that can assist in paying for your expenses related to legal defense, settlements, or judgments if an employee, whether current or former, files a lawsuit against you for issues such as harassment, discrimination, or wrongful termination in relation to their
• Management liability insurance
  • General liability insurance is a crucial form of coverage that safeguards your business’s directors and officers from expensive claims.
• Commercial auto insurance
  • General liability insurance is designed to provide coverage for you and your employees while driving a vehicle for business purposes. It ensures protection against potential risks and accidents that may occur on the
• Commercial umbrella insurance
  • General liability insurance is designed to provide extra coverage beyond your current liability policies, allowing you to cover the costs of high-value claims.

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Why Do You Need General Liability Insurance?

Liability claims are not uncommon and can be quite costly. In fact, within the next decade, it is likely that 4 out of 10 small businesses will have to deal with a liability claim. Slips and falls are the main reason for emergency room visits, and the average cost of such claims is $35,000.

If a claim escalates to a lawsuit, the average cost to defend and settle can exceed $75,000. Without general liability insurance, your business would have to bear these expenses on its own, which could potentially lead to the closure of your business.

Additionally, having general liability insurance may be a requirement when collaborating with other businesses. Some companies may request proof of insurance, typically in the form of a certificate of insurance.

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What is the difference between Public Liability and General Liability Insurance?

General liability insurance is a type of insurance that provides coverage for a wide range of claims related to bodily injury and property damage. It protects your business from potential risks associated with your work or the products you produce or supply.

This insurance is designed to cover any potential liabilities that may arise from working with or selling to the general public, whether you are directly interacting with them or operating in a public space.

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General liability insurance costs

Insureon, an insurance marketplace, states that the average monthly premium for general liability insurance is $42.

The cost of general liability insurance can vary significantly based on factors such as the nature of your business, its location, the size of your workforce, and any previous claims you may have.

For example, according to Next, a yoga teacher typically pays a monthly premium of $15, while contractors have a higher monthly bill of $88 for their general liability insurance.

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General liability insurance policy limits

In most general liability insurance policies, there are usually two figures mentioned: the per-occurrence limit and the aggregate limit. Generally, if you opt for higher limits, your premiums are likely to be more costly.

General liability insurance provides coverage for various claims that may arise against a business. The per-occurrence limit refers to the maximum amount that the insurance company will pay for a single claim. In a standard general liability policy, there is typically a per-occurrence limit of $1 million. This limit encompasses both the expenses incurred for legal proceedings and

The aggregate limit refers to the maximum amount that an insurance company will pay out within a specific timeframe, usually a year. For a general liability insurance policy, the aggregate limit is commonly set at $2 million. This limit is reset every year, provided that the policy is occurrence-based.

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Best General Liability Insurance for Small Business

Most insurance companies offer general liability insurance, including the top providers who allow you to easily obtain a quote and buy a policy online for quick coverage. Here are 8 Best General Liability Insurance for small businesses in 2024.

1. Next Insurance

If you require general liability insurance in a timely manner, you have the option to obtain a quote and purchase a policy online within minutes from Next. The company offers general liability insurance policies starting at $11 per month, which also includes coverage for product liability.

2. Chubb

Chubb offers a Business Owners Policy (BOP) that can be conveniently purchased online by businesses with revenue below $1 million. Along with coverage for business interruption, Chubb’s policy also includes extra expense coverage, which can provide support to your business during the recovery phase after an accident or disaster.

Despite holding a significant market share, Chubb has received fewer complaints regarding their general liability insurance compared to what was anticipated by state regulators, as per NerdWallet’s analysis.

3. Thimble

Thimble provides the option of purchasing general liability insurance on a monthly basis or for specific events, making it a suitable choice for businesses that primarily seek coverage to meet contractual obligations. Thimble states that they offer insurance policies starting at $17 per month.

4. Nationwide

Besides providing general liability insurance, Nationwide also provides specialized coverages such as surety and fidelity bonds. These specialized coverages are particularly essential for construction companies, cleaning businesses, and other specialty firms. While you can obtain a quote online, purchasing a policy will require assistance from one of Nationwide’s agents.

5. Hiscox

As a business insurance provider, Hiscox includes general liability insurance in their range of coverage options. However, if you provide advice to clients in exchange for a fee, it is also recommended to have professional liability insurance.

Hiscox’s policies offer coverage for work conducted globally, ensuring protection wherever you operate. Both general liability and professional liability insurance can be conveniently obtained through Hiscox’s online platform, allowing you to easily request a quote and make a purchase.

6. The Hartford

When it comes to insuring your business, it’s beneficial to work with business insurance agents who take the time to understand your company’s needs. They have the expertise to search for the appropriate coverage on your behalf.

If you prefer the guidance of a professional rather than purchasing insurance independently, The Hartford is a great place to begin. You can easily obtain a quote for general liability insurance and various other types of coverage through their online platform.

7. Huckleberry

If you require assistance, Huckleberry provides live chat and phone support. However, you have the option to obtain a quote and complete the application process entirely online, which typically takes five minutes or less for the majority of customers.

Once you have paid for your policy, you will receive an instant certificate of insurance that can be shared. Huckleberry offers both general liability insurance and a Business Owner’s Policy (BOP) that includes business interruption coverage.

Additionally, the BOP provides various endorsements, such as liquor liability, professional liability, equipment breakdown, and a restaurant endorsement. Moreover, Huckleberry offers other essential coverages for small businesses, including commercial auto insurance.

8. Farmers

If your business requires general liability insurance with substantial coverage, but does not require professional liability insurance or already has it from another provider, Farmers is an excellent choice.

With Farmers, you can enjoy per-occurrence and aggregate annual limits of up to $10 million. Additionally, they offer various discounts, such as a 15% discount for being a corporation and several multi-policy discounts.

In addition to General Liability Insurance, Farmers provides other insurance options such as commercial auto, workers’ compensation, commercial property insurance, and coverage for cyber liability and employment practices liability. To buy your policy, it is necessary to have a conversation with an agent.