General liability–what it does and why your landlord/client/vendor requires it

Starting a business? Signing the lease on a new space? Just landed a huge new client? Chances are you’re going to need general liability insurance.

Most of the time, people buy insurance to satisfy a contractual agreement requiring them to carry general liability coverage.

Simply put, general liability protects the business owner against lawsuits relating to:

• Property damage–damage to property that you’re legally liable for (including rented property).

• Bodily injury–Injuries to people who you’re legally liable for (excluding employees, who would be covered under a workers' comp policy).

• Medical payments–bodily injury that occurs during your business operations or on your business premises.

• Defense costs–lawsuits against your company, regardless of fault.

• Personal & advertising injury–claims of slander and libel (excluding professional services, which is where you'd need professional liability).

Even if you're not required to carry GL, any insurance advisor will tell you how important it is to carry. A single accident could result in a lawsuit that will put you out of business (or worse, make you go bankrupt) and, unfortunately, a lawsuit can even arise out of something that was not your fault.

Keep in mind there are also specialized forms of General Liability, such as Contractors’ Liability (for plumbers, roofers, electricians, etc.), Professional Liability (for architects, videographers, stylists, etc.), and Products Liability (for manufacturers, wholesalers, distributors, etc.).