Comprehensive General Liability insurance is a term you may come across as you’re shopping around for the right policy. It can be confusing since some policies are referred to as Comprehensive General Liability while others are referred to only as General Liability. Let’s break down what that means, and what this type of insurance does.
Comprehensive General Liability insurance is the same thing as regular General Liability insurance - so don’t make the mistake of thinking there are any differences between what they cover. It’s rarely called “Comprehensive” anymore because the word is a little misleading. There’s no such thing as a completely “comprehensive” insurance policy since every policy has limits and coverage exclusions.
General Liability is one of the first types of policies a business owner should purchase, as it covers you in cases of third-party injury and damages. For example, if a customer slips and falls at your business, insurance would reimburse any costs, including legal fees, if they were injured and sued you for medical expenses or other damages.
This type of coverage can also be purchased as part of a Business Owner’s Policy, or BOP, which means it’s bundled with property business interruption coverages.
General Liability insurance covers third-party claims surrounding personal injury, property damage, and advertising injuries (or copyright infringement). As a business owner, you may deal with many third parties, including your customers, competitors, and vendors. Every time a non-employee visits the premises, and every time you interact with a third party in the course of doing business, there’s risk of injury or damage you could be liable for.
For example: if you cause a leak in your office space that damages the building, your landlord could sue you for property damage. In another scenario, a business could bring suit against you if they feel like you copied their logo or other advertising materials, even if it was unintentional. General Liability policies cover a broad assortment of liability claims, including both of these.
General Liability insurance covers third-party liability claims, but not claims brought by employees. To protect employees who may be injured or fall sick on the job - and to protect your business from resulting lawsuits - you’ll need Workers Compensation insurance.
General Liability also doesn’t cover damage to your property or automobile-related accidents. So, if you accidentally spill water on your laptop, you would need to make a claim under your Commercial Property insurance. And if you operate a vehicle in the course of doing business, you’ll want to consider Commercial Auto insurance.
Additionally, this type of insurance won’t cover you if you’re sued for making a professional mistake. That could be, for example, if you are a lawyer and you give a client incorrect legal advice. For those types of situations, you’ll need Professional Liability insurance, also known as Errors & Omissions (E&O).