Running a business means juggling opportunity and risk every single day. You might do everything right: train your team, follow industry best practices, and keep customers happy. Yet mishaps happen, and you may still find yourself facing a lawsuit or claim. That’s where business liability insurance coverage comes in.
Business liability insurance isn’t a single type of insurance but a number of different kinds of insurance business owners can choose from to protect their businesses.
For instance, you can purchase general liability insurance, which helps protect your business when a third party claims you caused bodily injury, property damage, or certain personal or advertising harms. Without this type of business liability insurance coverage, you could be responsible for paying for damages, legal defense costs, settlements, and court judgments entirely out of pocket.
Below, we break down how a very common type of business liability insurance called general liability works, what it covers (and doesn’t), who benefits from it, how much it costs, and how to decide what coverage makes sense for your business.
At its core, general liability coverage as a type of business liability insurance is designed to protect your business from third-party claims.
A third party is anyone who is not part of your business — meaning not you, not your business partner, and not your employees. Claims can include bodily injury, like someone slipping and falling at a job site or your place of business, as well as accidental property damage and reputational harm, such as libel or slander.
Here’s how a general liability policy typically works using the job-site trip and fall example:
It’s important to note what this coverage is not. Business liability insurance as a general liability policy doesn’t protect your own business property (that’s business personal property insurance and commercial property insurance), and it doesn’t cover mistakes in your work or breaches of contract that caused a client to lose money (that’s errors and omissions insurance). Instead, it’s focused on protecting your business financially and legally when others claim you’re responsible for their injury, damage, or loss. More details on what GL covers and doesn’t cover are described below.
A standard general liability policy includes three primary coverage areas. Understanding these can help you see how broad and practical this type of business liability insurance protection really is.
Bodily injury coverage helps when someone is physically injured and claims your business is at fault. For example:
Medical bills, legal fees, and potential settlements can add up quickly. Bodily injury coverage helps absorb those costs so one accident doesn’t derail your business.
Property damage coverage applies when your business accidentally damages someone else’s property. Common scenarios include:
Instead of having to pay repair or replacement costs out of pocket, you can rely on your general liability policy to help cover these expenses, as well as subsequent legal or settlement costs.
This coverage is often misunderstood, but it can be critical, especially for businesses that market themselves online. Personal and advertising injury coverage can help protect against claims involving accidental:
For example, if a marketing campaign accidentally includes copyrighted content or a competitor claims your ad harmed their reputation, this portion of your policy may help cover legal costs.
Understanding general liability’s limits is just as important as understanding the benefits of this type of business liability insurance coverage. Below are the acts that would not be covered under a GL policy.
If you have a company car, you’ll need commercial auto insurance to pay for any accidents you or an employee might be involved in.
If your own building, equipment, or inventory is damaged, general liability won’t apply. That’s where business personal property insurance comes in, which protects your business assets.
If your business provides professional services or advice, mistakes can lead to financial losses for clients. These claims are covered under professional liability insurance, also known as errors and omissions (E&O) insurance.
Injuries to employees are typically excluded from general liability policies. These are handled through workers’ compensation insurance, which is required by law in most states if you have employees.
General liability policies usually do not cover data breaches, ransomware attacks, or cyber extortion. Businesses that handle sensitive customer data typically need cyber liability insurance.
Insurance is designed to protect against accidents and unintentional harm, not deliberate wrongdoing or illegal activity. Intentional acts and criminal behavior are excluded.
In reality, almost every business faces some level of third-party risk, and at least one type of business liability insurance would be essential. If your business interacts with customers, operates in physical spaces, or advertises, general liability coverage is likely a good start.
While it’s not always legally required, general liability coverage is often mandated by:
It’s especially important for:
Even home-based or solo businesses can face liability risks and benefit from coverage.
Berxi’s business liability insurance includes general liability policies. These start at around $100 per year for certain solo professionals, like personal trainers, and $350 per year for other small businesses.
The best way to find out how much your business liability insurance coverage might cost is to get a quick online quote.
Several key factors impact how much you’ll pay:
If affordability is a concern, there are practical ways to help manage costs:
Berxi makes it easy for small businesses and independent professionals to get the coverage they need — without unnecessary complexity. With transparent pricing, straightforward policies, and a digital-first experience, you can secure business liability insurance that fits your general liability coverage needs and your budget.
As a bonus, Berxi customers save an average of 15% vs. industry standards. Get a quote today — it takes only a couple of minutes, and you might be surprised at how affordable top-quality protection can be.
Business liability insurance describes a number of insurance coverages that a business can purchase to protect against third-party claims. These kinds of insurance policies can include errors and omissions, products liability, cyber, and general liability. General liability insurance is one of the most commonly purchased small business policies. It typically covers bodily injuries not related to malpractice, such as a client (or stranger) slipping and falling on the sidewalk outside your business; damage to a client’s property, such as you spilling coffee all over someone’s computer; and advertising claims or reputational damage.
Not always, but it’s often required by contracts, landlords, or professional regulators.
It can cover employee-related injuries if the business owner purchases a workers’ compensation insurance policy.
Coverage needs vary by industry, contracts, and risk exposure. Many small businesses start with limits of $1 million per claim/$2 million aggregate.
Yes. Home based businesses still face liability risks and often need coverage. For example, even if the bodily injury portion of a general liability policy isn’t as relevant to a smaller business, the personal property and advertising injury coverages could be.
You’re responsible for legal fees, court costs, settlements, and judgments out of pocket.
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The views expressed in this article are those of the author and do not necessarily reflect those of Berxi™ or Berkshire Hathaway Specialty Insurance Company. This article (subject to change without notice) is for informational purposes only, and does not constitute professional advice. Click here to read our full disclaimer
The product descriptions provided here are only brief summaries and may be changed without notice. The full coverage terms and details, including limitations and exclusions, are contained in the insurance policy. If you have questions about coverage available under our plans, please review the policy or contact us at 833-242-3794 or support@berxi.com. “20% savings” is based on industry pricing averages.
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