What is General Liability Insurance – Meaning, Cost & Benefits

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Every LLC business will need a liability insurance policy so as to ensure that under no circumstances, the business owners will have to bear the costs of the damages, be it the bodily injuries, property damage, invasion of privacy, legal defense costs, and others. But what is general liability insurance? This page will tell you everything.

general liability insurances

Several types of commercial umbrella insurance plans are there, including professional liability insurance and workers’ compensation insurance. However, it is the liability business insurance that acts as the most important coverage plan for any kind of LLC, be it a foreign LLC, a domestic LLC, a single-member LLC, and so on.

What is General Liability Insurance?

While opening a limited liability company (LLC), you should be aware of the several business risks associated with the business. Amongst these, it is the liability risks that every business owner should be concerned about. This is where the general liability insurance plan comes into the role play.

A liability insurance policy will help you to cover the costs of injuries incurred on your employees or on yourself or the other members while being on the business property. Apart from this, the liability property insurance policy will also cover the legal costs that you might have to bear while fighting against a lawsuit or paying for penalties levied on you.

Risks Covered by General Liability Insurance

Professional liability insurance will cover some of the risks that will be present for your business. Here is the list of all the risk factors that come under the coverage plans of the liability policies.

  • Bodily injuries will include any kind of physical injury caused to your employee. It will also include a third-party bodily injury within your business property
  • Property damage, either to your or your client’s property under your supervision
  • Medical expenses for any treatment done for injuries gained within your business premises
  • Advertising injury caused by your advertisements to any other business or client
  • Legal defense fees

How Much General Liability Insurance Costs

The average general liability insurance cost will depend on the state where your LLC is situated. However, the general limit for liability insurance coverage ranges between $300 and $1000 per year. The exact business liability insurance cost will depend on several factors, which we have discussed below.

Variables Affecting General Liability Insurance Fee

  • If your business is exposed to greater risks than others, your liability insurance cover will cost you more.
  • Location of the business, generally based on the ZIP code
  • The number of employees you have and the annual payroll amount
  • Amount of coverage that is payable per incident related to your business
  • Total coverage amount payable per policy period
  • Deductibles

How to Get General Liability Insurance for LLC

It is not an easy task to get the liability insurance coverage plan for the businesses. Many factors must be considered when you will choose commercial insurance for protecting your liabilities and assets.

  1. Collect the required information and documents

    Your first task for buying general liability insurance is to gain more information pieces about the same. You need to ask about the requirements your business must meet to take this insurance policy. Besides, you also need to know the documents you have to submit at the time of applying for the commercial liability insurance plan.

  2. Hire a commercial agent

    For having management liability insurance, you need to look for a professional agent working in a popular private insurance company. As a responsible business owner, you need the agent’s help to understand the details of the insurance coverages that will help you in saving operating expenses.

  3. Determine the needs of your business

    For getting the certificate of insurance, all the businesses need to determine the needs. For example, if you deal with cars, you will need commercial auto insurance. For LLCs having a huge number of employees, compensation insurance is a must. If the company deals with manufacturing, insurance for contractors will be ideal. You can also look for insurance cover theft if you want to protect the tangible assets of your business.

  4. Evaluate the liability insurance options

    No matter how many common insurance policies you have looked at so far, you need to decide which particular liability and life insurance policy will be perfect for your business. Let’s say you want to cover work-related injuries, but the policy you have chosen provides benefits for bodily injury liability. In this case, the policy wouldn’t be suitable for you. This is why for choosing the type of insurance, you need to understand the options.

  5. Get the quote for the liability insurance.

    Lastly, you need to get the liability insurance quotes to understand what the limits of insurance are, how much you need to pay as a premium. The benefits you will get as employers, and so on.

Benefits of General Liability Insurance for LLC

Following are the areas which will be covered under your policy as per the general liability insurance definition.

  • Liability claim of assets
  • Employee injuries
  • Copyright infringement injuries of other businesses
  • Auto insurance policy plans
  • Coverage for damages to your property
  • Accident and slander coverage
  • Personal injury liability coverage
  • Company advertising injury

What is General Liability Insurance for Contractors

General Liability insurance protects the small business owners from lawsuits and aids in completing contracts and leases. it also covers business risks like customer property damage, advertising injury, etc.

There are a few different ways to obtain a general liability insurance policy for contractors. Contractors can purchase their own policy or they can purchase one through a client. Both of these methods will give the contractor a certificate of insurance that demonstrates their level of coverage. However, it is usually more affordable for the client to add the contractor to their own general liability policy. This is called an “additional insured” and will cover the contractor for the duration of the project.

Another way to protect your business from lawsuits is to purchase errors and omissions insurance. This is also known as professional liability insurance and can cover expenses if you are sued for an error. Additionally, most states require contractors to purchase commercial auto insurance to cover the costs of accidents and property damage. This type of insurance is important because personal auto insurance will not cover the costs of driving to and from job sites.

Nationwide is a large insurance provider with a lot of experience working with contractors. Their policy is designed to be flexible and tailored to each individual company. In addition to offering a contractor general liability policy, Nationwide also offers equipment and tool coverage. This coverage is particularly beneficial for larger construction companies with complex coverage needs.

General liability insurance is important for contractors because it protects them against damages caused by third parties. However, it can also leave them vulnerable to lawsuits. If you decide to cancel your GL policy and then face a claim for a completed operation, it could leave you exposed to a lawsuit.

While a general liability insurance policy is an essential part of a contractor’s risk management strategy, it is important to remember that it does not cover every potential risk. In fact, contractors often face many different types of claims during normal operations. General liability insurance for contractors can provide coverage against injuries, property damage, and advertising claims.

Costs vary depending on several factors, including the type of business and number of employees. For instance, the average premium for a general liability policy for a small business is $50 per month, which is quite affordable when compared to premiums for larger companies. In addition, a clean claims history will help lower costs.

General liability insurance is one of the most common forms of commercial insurance. Contractors can easily compare quotes from almost any insurer. However, some insurers use endorsements to limit the types of projects that they cover. Moreover, a general contractor may only be covered for certain trades if they list them on the policy application.

General liability insurance for contractors can cover a wide variety of different risks, such as injuries to clients or loss of property. The policy may also cover medical expenses for clients. If the contractor is sued for a breach of contract, the policy could also cover these costs.


How should I know my insurance policy limit?

When you take the insurance to cover your business operations, you need to understand the limits applicable to different companies and professional services. Based on the type of business and the normal business operations, the limit will vary.

Will my general liability insurance cover the medical costs?

Yes, your insurance plan will cover the medical claims for an injury that your employees might receive. Apart from this, the policy will also cover work-related personal injury.

Are replacement costs of stolen or damaged products included in the policy?

Yes, the policies will also cover the business interruption expenses caused due to theft or damage to products your LLC business deals in.

In Conclusion

It is important to have insurance while running your business. You never know when and what kind of risks can emerge. General Liability Insurance is one such protection for your LLC that will protect your assets and business if such unpleasant threats occur. I have listed down the details of General Liability Insurance as much as possible in this article. Share your feedback with us in the comment section below.

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