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.

General Liability Insurance is a type of insurance that can cover lawsuits against contractors, as well as damages to third-party property or injury to a third-party. The policy can also cover expenses for legal defense and court fees.

Several states require contractors to carry general liability insurance. In addition, lenders often require it, as well. While some states may not require it, it is generally a good idea for any business. Purchasing general liability insurance can save you a considerable amount of money in the long run, as you will have a peace of mind knowing that you are protected should a claim arise.

Contractors should consider several important details before securing their insurance coverage. These details will help them avoid gaps in coverage and get the best deal possible.

If you are a contractor, it’s a good idea to find out exactly what your state requires, as well as what it isn’t. Some states have a specific list of minimum requirements for coverage, but the requirements vary considerably. For example, Pennsylvania doesn’t require general liability coverage, and Georgia requires only minimal coverage.

Many insurance carriers will write a general liability policy on a standardized form. However, these policies may be limited to certain trades or projects, or they may simply not offer enough coverage to address your needs. There are other ways to customize your policy and avoid the same coverage limitations.

Some insurers will offer you endorsements to enhance the benefits of your policy. Examples include a data breach coverage add-on, which will cover costs related to customer notification or improving security. Other endorsements are available that will help you protect your assets.

One type of endorsement is the claims-made coverage, which pays for damages if you are deemed legally responsible for a claim that occurs during the policy period. Depending on the carrier and the circumstances, this can be an expensive addition to your general liability coverage.

Another option is the equipment add-on, which can provide you with the coverage you need to protect your business’s assets from theft or damage. This is especially valuable for businesses that don’t operate out of commercial buildings.

While there are many different types of insurance available, general liability insurance is a basic but essential protection for any contractor. It can also be an important part of a contractor’s overall risk management strategy. No matter your business’s size or the number of risks you face, you should be able to find the right policy to meet your needs.

Once you know what your state requires, you’ll be able to select the most appropriate coverage for your business. To get a quote from a Nationwide agent, visit their website. They have a great deal of experience in insuring a variety of businesses, from small home improvement contractors to large construction companies. You can also speak to a licensed agent for more information.

While a general liability policy can address the most common types of business claims, it isn’t designed to address all risks. That’s why a contractor should shop around for the best policy to fit his or her particular needs.


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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