General Liability Insurance

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What is general liability insurance?

General liability insurance, also referred to as ‘commercial general liability’ (CGL) insurance or ‘business liability insurance,’ protects a business against the risk of accidents like bodily injury and property damage that happen to a third party.

CGL is the most essential insurance for a business. If you don’t have it and something happens while you’re on the job, one big claim could cost enough to put you out of work. With general liability insurance, you’ll have the protection you need to stay focused on building your business.

What does general liability insurance cover?

You should consider purchasing general liability insurance coverage if you work with clients on a face-to-face basis, or at a client’s place of work, your own place of work, or a third-party location. It provides the investigation and defense of claims as well as paying for damages if you are responsible for things like:

  • Bodily Injury – Slippery when wet. General liability insurance coverage protects against claims of physical injury to a third party.
  • Property Damage – CGL also offers coverage for damages to another entity’s property. If you don’t own it and you break it, CGL can help.
  • Personal and Advertising Injury – Say it ain’t so. Claims that you publicized something damaging to the reputation of another party.

Who needs general liability insurance?

As a small business owner, you probably interact with third parties regularly. From your clients to the average bystander, there’s always the risk that an accident happens. It might be something as simple as a slip and fall in your office. Or you could be offsite at a client’s premises, only to accidentally damage their property.

The reality? Any business that interacts with third parties should strongly consider commercial general liability insurance.

Learn more about general liability in a Q&A with our CIO. Check it out.

“General liability protects against accidents which cause bodily injury or property damage.”

The content on this page has been verified by
Terri Hitchcock, JD
Chief Insurance Officer, Thimble
Terri has 38 years of industry experience and knows a thing or two about insurance, so she reviewed and approved everything on this page.
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Why is general liability insurance important?

General liability insurance is important for many businesses. Some professions need proof of insurance to secure a state-issued permit or license. Additionally, some contracts will require showing general liability coverage prior to awarding the work.

Even if not required, a general liability policy helps show prospective clients that you are a legitimate business. You know accidents happen but are protecting those involved.

No matter your profession, general liability can help protect you from the financial consequences of a third-party accident.

How much does general liability insurance cost?

The cost of a CGL policy is based on just a few things: what you do, where you work, how long you need coverage, and the size of your team. On average, small business owners typically pay around $30/month~ or $360 per year.1 As with any policy, the cost is subject to change based on your specific business’s details, but policies arranged by Thimble start at $17 a month.

When it comes to third parties—like your clients and customers—they can be quick to sue you for things that go wrong and cause damage, even if they aren’t your fault. Not so fun. For that reason and so many more, the cost of a general liability insurance policy is negligible when you compare to what it’s worth—up to $2 million in third-party damages that would come out of your pocket.

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What other kinds of business insurance do I need?

While general liability insurance is designed to protect your business against bodily injury, property damage, and personal injury claims, you may want to consider a number of other coverage types depending on the nature of your business.

Professional liability insurance

Designed to protect against errors & omissions claims—i.e., allegations that you have failed to provide the appropriate professional services, which resulted in monetary or reputational damage. Professional liability is essential for a range of professionals, from consultants to photographers.

Equipment insurance

Protects the equipment you own and use for work, from a lawn mower to a camera. Business Equipment Protection is a type of property insurance that covers your stuff.

Business Owner’s Policy (BOP)

Designed for small business owners who need a few types of coverage. BOP is usually a bundle that includes coverage for damage to owned property, liability, and business interruption insurance.

Workers’ compensation

Essential if your business has employees or workers of any kind. This coverage applies to medical expenses and lost wages associated with work-related injuries and illnesses.

General Liability FAQs

Is general liability insurance required by law?

General liability insurance is not always required by law and you won’t necessarily get in legal trouble at the federal or state level for not carrying CGL insurance. However, there are other potential consequences like losing work because clients want to hire someone that’s insured or suffering financial damages from a lawsuit. In a nutshell, while not always required by law, general liability insurance is a must-have.

How do I show proof I have a general liability policy?

Once you have general liability coverage, you’ll receive a policy and any necessary Certificates of Insurance (COI) you might require. Your COI, often known as an ACORD 25, Certificate of Liability Insurance, is a standard document that proves you’re insured. It includes details like the types of liability coverage (general liability, professional liability, etc.) you have in force, the applicable policy limits, and the duration of your policy. This is typically the document you need to show your clients to prove that you’re ready to get to work. With Thimble, you’ve got instant access to your COI after purchase and can make and send unlimited copies all with a click of a button.

Does general liability protect my store, office, or physical location?

No. If you own or rent a physical location you need a commercial property insurance policy. Unlike general liability which provides third-party coverage, commercial property insurance protects your property (first-party coverage).

What is an Additional Insured?

An Additional Insured is someone who wants to be protected under your CGL policy with respect to liability arising out of your actions or operations . In many cases, this is the company or organization hiring you, because they want to ensure that if anything goes wrong while you’re working on their behalf, they will be defended and covered under your insurance.

How are general liability claims handled?

Claims are handled on behalf of Markel Insurance Company or National Specialty Insurance Company. If you need to file a claim, please follow the contact instructions listed on your policy. Read more here.

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