WHAT IS COMPREHENSIVE
GENERAL LIABILITY INSURANCE?

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Comprehensive general liability insurance

Comprehensive general liability insurance is the older term for commercial general liability insurance, or simply, general liability insurance.

If you’re out shopping for business insurance, you’ve almost certainly come across general liability insurance. You may have also seen “comprehensive” general liability insurance. So what’s the difference?

We’ll let you in on a little secret: comprehensive general liability and general liability insurance are the same thing.
That’s the short answer. (For the longer answer, read on.)

Comprehensive general liability insurance vs. general liability insurance

Simply put, comprehensive general liability insurance is the older term for commercial general liability insurance, or simply, general liability insurance. While you’ll still see it here and there, it’s going out of style.

Increasingly, you’ll see insurance providers offering general liability coverage (without the “comprehensive”). Why did insurers abandon the term “comprehensive” when describing general liability insurance? As you know, insurance is all about minimizing risk. While you purchase insurance to protect your business from liability, insurers need to protect themselves from liability, too.

Specifically, they need to be careful about the words they use to ensure they’re not promising to cover all forms of risk. When people see the word “comprehensive” in an insurance policy, they might assume it means all forms of liability are covered. That’s understandable. After all, the dictionary defines “comprehensive” as “covering completely or broadly; inclusive.”

There’s no insurance policy in the world that can protect you “completely” from all forms of risks. If insurance was truly comprehensive, then the insurer would have to provide coverage for any type of accident or lawsuit. In order for them to afford that, premiums would skyrocket. So, to minimize their risk—and to keep rates affordable—insurers limit their policy terms and coverage.

Think of it this way: you have health insurance for your medical care and auto insurance for your car. You wouldn’t expect your auto insurance to cover your annual physical.

In the same way, you need different types of insurance to protect your business. General liability insurance (now known as commercial general liability insurance) is typically the first type of insurance every business owner purchases. General liability insurance protects you from costs related to liability because of accidents or negligence suffered by a third party that result in bodily injury or property damage, and the lawsuits that can arise from such accidents.

So, what’s general liability insurance, exactly?

General liability insurance may not be “comprehensive,” per se, but it protects your business from the costs of a wide range of third-party claims, including those involving personal injury and property damage. To compare comprehensive vs. general liability insurance, let’s break down examples of what’s covered, and what’s not.

What’s covered by general liability insurance?

General liability insurance protects your business from costs relating to damages arising out of liability for claims of bodily injury, property damage, or personal and advertising injury suffered by a third party. Here are a few examples.

Bodily injury to a third party: Let’s say you’re a handyman. You often perform your work in your client’s home, with your tools and equipment spread on the floor. Someone in your client’s household trips and gets injured, and they sue you for medical bills. General liability insurance can help cover the cost of those bills, along with any defense costs if they take you to court.

Property damage suffered by third parties: If, in the course of your work as a handyman, something gets damaged in your client’s home, they could also hold you responsible. General liability insurance provides coverage for property damage accidents, too.

Personal and advertising injury to third parties: These claims arise from instances where a third party claims you did something that damaged their reputation. Maybe you used your client’s name and photo in your advertising materials without their consent, and now they’re suing you. Again, general liability insurance offers protection for claims of personal and advertising injury. Now think for a moment about the number of third parties your business encounters on a daily basis. From clients and customers, to landlords and vendors, it adds up quickly.

That’s why a general liability policy is a good idea for any business. General liability insurance coverage can pay for damages related to third party claims of bodily injury, property damage, or personal and advertising injury, along with providing associated claim investigations and related defense.

What’s not covered by general liability insurance?

If you caught on to the fact that we keep repeating the phrase third party, you’ve got a good eye. That’s because general liability insurance coverage is limited to third party liability.

It does not protect you from liability claims brought by your own employees, or provide coverage for accidents that resulted in your own property, vehicles, or equipment getting damaged. You need separate business insurance policies for that type of protection, namely workers’ compensation insurance, commercial property insurance, and commercial auto insurance.

General liability insurance also does not protect you in instances where you’ve made a professional mistake, such as if you’re a marketing consultant and you gave your client bad advice. That’s what professional liability insurance, also known as errors & omissions insurance, is for.

What about comprehensive personal liability vs. general liability insurance?

You may also see the word “comprehensive” tacked on to personal liability insurance. This type of insurance often shows up as part of a homeowners insurance policy, a personal liability policy or a personal umbrella policy.

Like commercial general liability insurance, these provide protection for the policyholder against claims brought by third parties. In the case of personal liability insurance, however, individuals are protected from claims of property damage or bodily injury suffered by third parties in their home, such as a mailman getting hurt while delivering a package or while they are pursuing personal activities off their premises.

While general liability insurance is designed to protect businesses, personal liability insurance is designed to protect individual consumers. As we saw with commercial general liability insurance, the individual (and members of their household) are not protected if they end up being the one who gets injured, or suffers property damage. That’s where health insurance, and the property portion of homeowners or dwelling fire portion of those policies come into play.

General liability insurance and your business

As you can see, comprehensive general liability insurance is just another term for general liability insurance. The word “comprehensive” has pretty much been removed to more accurately reflect what this type of insurance covers: third-party claims related to bodily injury, property damage, or personal and advertising injury.

Dealing with third parties is part and parcel of doing business. If you have a small business, you need general liability insurance. Protect yours with the general liability insurance arranged by Thimble. We cover over 140 different professions, from landscapers to event organizers.

Click the big green “Get a Quote” button. Then tell us your ZIP code, type of business, and how long you need coverage for, and you’ll see your instant quote. Look it over, purchase your coverage, and get protected in less than 60 seconds. Seriously! It’s that easy.

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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