There are plenty of calamities that can put a serious dent in your bottom line. For instance, your employee liability insurance might spill a can of white paint on merchandise. Or a customer might get hurt after tripping on a rug in your store. Or you could be sued for reputational harm due to something you or your employee said.
General liability insurance covers a small business from these types of problems (and more). It’s an essential coverage type for small business owners.
What Is General Liability Insurance?
General liability insurance protects a business against claims of bodily injury and property damage from customers and clients. These types of claims may result from your company’s products, services or operations. Without general liability insurance, you could end up paying out of your business’s income and, in a worst-case scenario, even go bankrupt.
General liability insurance is sometimes called “business liability insurance” or “commercial general liability insurance.
Other types of liability insurance for small businesses
While general liability insurance is a core coverage type, it doesn’t cover everything. You may need additional types of liability insurance for your small business to cover any gaps in coverage. Here are some common types of liability insurance to consider:
Commercial auto insurance. The liability portion of your commercial auto insurance covers accidental injuries and property damage caused to others while you or your employees are driving a work vehicle. Your personal car insurance policy won’t cover business use of a vehicle.
Commercial umbrella insurance. This adds an extra layer of protection above the liability limits on your other insurance policies. For example, if a claim exceeds your general liability limits, commercial umbrella insurance can kick in to cover the overage.
Cyber liability insurance. This covers your small business for a cyber breach, which could include sensitive information like your client’s credit card numbers, driver’s license numbers, Social Security numbers and health records. Cyber liability insurance is also called cybersecurity insurance or cyber risk insurance.
Professional liability insurance. This covers your small business for claims of mistakes in professional services, such as inaccurate advice, misrepresentation, negligence and violation of good faith and fair dealing. Professional liability insurance is also called errors and omissions insurance.
Product liability insurance. If your small business creates, sells, manufactures or distributes a product, product liability insurance covers your small business for bodily injuries and property damage for claims such as design defects, improper warning, manufacturing defect and marketing defect.
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