What general liability covers
If a customer slips in your shop, your contractor damages a client's wall, or a competitor sues you for using a similar slogan, general liability is the coverage that responds. It pays for legal defense costs and any judgment or settlement up to your policy limits.
Standard limits are $1 million per occurrence and $2 million aggregate. Larger contracts and landlords often require higher limits or additional insured endorsements naming them on your policy.
What it does not cover
General liability does not cover professional mistakes (that is errors and omissions), employee injuries (workers' compensation), damage to your own equipment (commercial property), or auto-related claims (commercial auto). Many small businesses package these into a Business Owner's Policy or a tailored commercial program.
Sizing your coverage
Choose limits based on contract requirements, your assets, and your industry's typical claim sizes. An umbrella policy can extend the underlying limits cheaply once you reach the maximum offered on the primary policy.
Key takeaways
- General liability is foundational but not comprehensive.
- Standard $1M/$2M limits suit many small businesses; verify contract requirements.
- Pair with workers' comp, professional liability, and commercial auto as needed.
- Add an umbrella policy to extend limits inexpensively.
This article is for general educational purposes and is not legal, financial, or insurance advice. Consult a licensed professional for decisions specific to your situation.