What Is General Liability Insurance? A Plain-English Guide

If someone asks whether your business is insured, they're almost always asking about general liability insurance. It's the foundation of business coverage — and it's the one most clients, venues, and GCs will ask to see before they work with you.

What general liability covers

GL insurance pays for three main types of claims:

• Bodily injury to a third party — a client slips at your worksite, a bystander is hurt by your equipment, a customer trips over your tools
• Property damage to someone else's property — you break something at a client's home, your equipment damages a venue, your vehicle scratches a car
• Personal and advertising injury — claims of libel, slander, or copyright infringement in your advertising

GL also pays your legal defense costs — even if the claim against you turns out to be unfounded. That's one of its most valuable features.

What GL does NOT cover

This is just as important to understand:

• Your own property — damage to your tools, equipment, or vehicle isn't covered. That's inland marine or commercial auto.
• Your employees' injuries — that's workers' compensation.
• Professional mistakes — if a client claims your advice or service caused them harm, that's professional liability (E&O).
• Intentional acts — GL doesn't cover deliberate damage or fraud.

Who needs general liability insurance?

Almost every service business needs GL. You need it if:

• You visit clients' homes or businesses to perform work
• Clients or vendors visit your location
• You work at events, venues, or job sites
• You have a contractor's license (most states require it)
• You sign commercial contracts or work with GCs

How much does GL cost?

For most solo service business owners, general liability runs $400–$900/year. Factors that affect your rate:

• Your industry (roofers pay more than dog walkers)
• Annual revenue
• Number of employees
• Location/state
• Claims history

Disclaimer: This guide is for informational purposes only and is not legal, tax, or insurance advice. Always verify specifics with a licensed professional in your state.