General Liability Insurance

The claims that come from outside your business: someone else's injury, someone else's property, and the contract nobody will sign without proof of coverage.

Who It Is For

Nearly every business, and some of them by contract.

General liability is a common necessity for most businesses. If people who are not on your payroll come into contact with your premises, your work or your products, the exposure exists whether or not the policy does.

Any business that meets clients at its own location or at theirs.
Any business with physical access to a client's building, equipment or systems.
Businesses that make or sell a product that leaves their control.
Anyone who has been asked for a certificate of insurance before a contract, lease or purchase order could be signed.

Business premises covered by an Oxford Risk general liability policy

Coverage Overview

The damage you can see is the easy part. General liability is for the harm your business does to everyone else.

When you look around a business, the obvious things to protect are the building, the equipment and the people on payroll. General liability is for the less obvious exposure: injury to people outside the business, and damage to property that belongs to someone else. Those are the claims that arrive with a lawyer attached.

It is the foundation of a commercial program. Most other business policies are defined partly by what general liability does not do, and almost every contract that asks a business for insurance is asking for this policy first.

What the policy generally covers

Bodily injury to people who are not your employees: the customer, the visitor or the passerby hurt on your premises or by your work.
Property damage to property you do not own, whether it happens at your place or at theirs.
Personal and advertising injury, which reaches claims such as libel, slander and reputational harm. An employee defaming a client falls here rather than under bodily injury.
Medical payments, which can settle a small injury bill promptly without waiting for anyone to establish who was at fault.
The cost of defending a covered claim, which the policy generally pays even when the allegation turns out to be groundless.
Products and completed operations, meaning the claim that arrives after the product left the shelf or the job was finished.

What it is not

Professional advice. A claim that you advised a client badly or performed a service poorly is not a general liability claim. That is what errors and omissions coverage is written for.
Injury to your own employees, which belongs to workers compensation and employers liability.
Damage to your own building, stock and equipment, which is commercial property, and damage to your own work or product, which the policy treats as a business risk rather than an insurable accident.
Anything involving a vehicle, which belongs on a business auto policy.
Pollution, which general liability excludes and which is written as environmental coverage where it is needed.
Data and network exposures, which current policies address through cyber liability rather than here.

How the limits are arranged

A per occurrence limit, which is the most the policy pays for any one claim.
An aggregate limit, which is the most it pays across the whole policy term no matter how many claims there are.
Coverage written on an occurrence basis, so the policy in force when the injury happened is the one that responds, even if the claim arrives years later.

Commercial umbrella coverage attaches above these limits, which is why the two decisions are usually worth making together.

Real Exposures

Where general liability claims actually come from.

Ordinary events with disproportionate costs.

A visitor is injured on your premises. A slip in the entryway, a fall on a stair, a customer struck by something that was not secured. The injury can be modest and the claim can still involve medical treatment, lost wages and counsel on the other side.
Your work damages someone else's property. Coverage follows the work off your own site. A job that floods the floor below, a delivery that puts a forklift through a client's wall, a repair that fails and ruins what was around it.
The claim has no merit and still has to be defended. The policy generally pays to defend a covered claim, and the cost of defending an allegation does not depend on whether the allegation was true. Without coverage, the defense is funded out of the business.
A product causes harm after it leaves. Products and completed operations claims can arrive long after the sale or the final walkthrough. That is one reason the coverage is written so the policy in force when the injury happened is the one that answers.
A contract requires coverage you do not have. Leases, customer agreements and subcontracts routinely set a required limit and ask to be named as an additional insured. Work that begins before that is in place leaves the business carrying an obligation it agreed to and cannot pass on.

Two businesses on the same street can need very different general liability policies.

Classification has to match what you actually do. The policy is underwritten and rated on a description of your operations. Work that has drifted away from that description, a new service line or a new kind of jobsite, is a common reason a claim meets an argument at the wrong moment.
Set the limits against the contracts you sign, not the premium. The per occurrence and aggregate figures are choices. Where customers or landlords specify a required limit, the policy and any umbrella above it have to satisfy the highest one in the file.
Additional insured status is a specific request. Naming another party on your policy is done by endorsement, and the wording matters as much as the fact. A certificate is evidence of the arrangement, not the arrangement itself.
Know where the line with professional liability falls. If part of what you sell is judgment, advice, design or a professional service, general liability will not answer for it. That gap is closed with errors and omissions coverage, not by raising the general liability limit.
What drives the cost. Industry type, location and the size of the business, because the exposure behind each is different, along with the limits chosen and the claim history on the account.

Does general liability cover my own building and equipment?

No. It pays for injury to other people and damage to property belonging to someone else. Your own building, stock, equipment and tenant improvements are commercial property coverage, written separately or packaged with liability in a business owners policy.

A client says our advice cost them money. Is that covered?

Generally not. General liability answers bodily injury and property damage, not the financial consequences of professional advice or a service performed badly. Errors and omissions coverage, also called professional liability, is the policy written for that.

What is a certificate of insurance, and why does everyone ask for one?

It is a document evidencing that the policy exists and showing its limits, and many contracts require it before work can start. Some also require the other party to be added to the policy as an additional insured, which is a change to the policy itself rather than something the certificate accomplishes on its own.

An employee was hurt at work. Is that a general liability claim?

No. Injuries to your own employees are handled through workers compensation and employers liability. General liability responds specifically to people outside the business.

Is general liability legally required?

It is usually not required by law the way workers compensation and auto liability are. It is very often required by contract, which in practice makes it just as mandatory for a business that wants to sign leases, serve commercial customers or work as a subcontractor.

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Oxford Risk LLC is an independent agency. We represent you rather than a single carrier, which means we can place your coverage with the company whose appetite actually fits your risk. Tell us what you need to protect and an advisor will take it from there.

Call (330) 315-3081
Hours Monday - Friday: 8:00 AM - 4:00 PM
Offices Fairlawn, OH, Cranberry Township, PA, Columbus, OH, Livonia, MI

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