What Is General Liability Insurance?

If you run a small business, you’re well aware of how many things can go wrong. Even if they haven’t happened to you personally, you’ve probably heard the horror stories. Whether accidental customer injuries, legal action from competitors or any of a thousand other heartburn-inducing scenarios, the risks and pitfalls of running even a very small enterprise can keep you up at night.

One of the most effective ways to protect your business from potential financial loss is with general liability insurance. Let’s explore how this kind of coverage helps keep small business owners confidently on track to success.

What Is General Liability Insurance

Also known as commercial general liability insurance, general liability insurance protects businesses from financial loss arising from claims of damage or injury caused directly or indirectly by your business operations. It can help cover the costs of legal fees, medical expenses and lawsuit damages from incidents that are not intentional in origin.

General liability insurance typically covers several key areas, including:

Bodily Injury

In the unfortunate event that a customer is injured on your business premises or as a result of your business activity, general liability insurance can help cover the costs of damages, medical expenses and legal fees. For example, a customer could be struck by ice falling from a business’s roof.

Property Damage

If a customer or client's property is damaged as a result of your business activity, general liability insurance can help with the costs of repairs or replacement. For example, if you own a landscaping business and one of your employees accidentally damages a customer’s driveway property while providing service.

Personal Injury

Personal injury of a nonphysical nature to a third party—such as false advertising, libel or slander that results in financial loss—can be covered by general liability insurance. For example, a customer could claim that a business’s advertising materials contain misleading claims that resulted in the customer experiencing financial loss.

Advertising Injury

Copyright infringement or violation of intellectual property rights related to your business's advertising or promotional materials can also be covered by general liability insurance. For example, an advertisement might accidentally include copyrighted material for which the owner seeks compensation.

Without adequate insurance coverage, a business could be severely impaired—or even bankrupted—when held financially responsible for harm arising from occurrences such as these.

What Coverage Does a Small Business Need?

As you can see, selecting the right general liability insurance can be a game changer for a small business. The amount of coverage your business needs will depend on several factors, including the size of your business, the industry you're in and the specific risks your business faces.

But let’s not forget: There are other types of liability insurance, and these coverages can make a big difference when you need it. These include:

Umbrella Insurance

This type of policy provides additional liability coverage beyond the limits of your general liability policy.

Cyber Insurance

This covers financial losses resulting from data breaches, cyberattacks and other digital threats. In the age of advanced digital hazards, this kind of insurance is increasingly popular among business owners eager to protect themselves from rapidly evolving threats.

Product Liability Insurance

This covers claims of injury or property damage resulting from a defective product your business sells or manufactures.

Employment Practices Liability Coverage

An employment practices liability policy helps protect business owners against claims from a customer, client, or vendor alleging discrimination, wrongful termination, harassment (including sexual harassment), or other wrongful employment acts.

Finding the Right Coverage for Your Business

When your focus is keeping the lights on, the shelves stocked and business flowing through the front door, the last thing you want to worry about is life’s little (or big) accidents. General liability insurance can help protect your business from financial responsibility for a host of pitfalls while you keep your attention on the things that matter. Contact a local ERIE agent today to learn how we can help you stay on track and on target with peace of mind.

ERIE® insurance products and services are provided by one or more of the following insurers: Erie Insurance Exchange, Erie Insurance Company, Erie Insurance Property & Casualty Company, Flagship City Insurance Company and Erie Family Life Insurance Company (home offices: Erie, Pennsylvania) or Erie Insurance Company of New York (home office: Rochester, New York).  The companies within the Erie Insurance Group are not licensed to operate in all states. Refer to the company licensure and states of operation information.

The insurance products and rates, if applicable, described in this blog are in effect as of January 2024 and may be changed at any time. 

Insurance products are subject to terms, conditions and exclusions not described in this blog. The policy contains the specific details of the coverages, terms, conditions and exclusions. 

The insurance products and services described in this blog are not offered in all states.  ERIE life insurance and annuity products are not available in New York.  ERIE Medicare supplement products are not available in the District of Columbia or New York.  ERIE long term care products are not available in the District of Columbia and New York. 

Eligibility will be determined at the time of application based upon applicable underwriting guidelines and rules in effect at that time.

Your ERIE agent can offer you practical guidance and answer questions you may have before you buy.


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