Best Commercial General Liability Insurance in 2024

The general liability (GL) insurance meaning and how it applies to businesses shouldn’t be confused with liability auto insurance coverage. While both pay for damages and injuries caused to another party, the general liability insurance definition only applies to businesses and business owners.

Though general liability differs from auto liability, it still provides liability protection for commercial vehicles. However, you may want commercial auto insurance for more well-rounded coverage.

Why does a business need general liability insurance coverage? This policy protects you if someone gets injured or dies on your business property or if someone gets hit by a company vehicle. It also protects against damages caused by your business products or services.

Keep reading to learn the differences between general and auto liability and when you might need to buy business auto insurance. This guide breaks down the general liability insurance coverage definition so you can decide if this policy provides enough coverage for your business and commercial vehicles.

What is general liability insurance?

General liability insurance covers your business when someone gets injured or dies using your product or services on your property or someone gets struck by a company vehicle. The policy also protects your business if customers, clients, or other business entities sue you.

However, the definition of general liability coverage doesn’t include your own personal or business property or any electronic or digital property. The policy also won’t cover employee injuries — businesses need business insurance and worker’s compensation policies for that coverage.

Typically, these are the three areas of general liability insurance coverage:

• Bodily injury and property damage. Covers injuries, sickness, death, or tangible property damage caused by your business products or services.

• Personal and advertising injury. Protects you and your business from malicious prosecution, libel, slander, false eviction or imprisonment, or if you get sued.

• Medical payments coverage. Covers medical bills for accidental injuries on your business property regardless of fault.

General liability policies also provide minimum automobile liability insurance for business vehicles, but you’ll need to shop around for cheap commercial auto insurance quotes if you want full coverage while on the job.

What is the difference between general liability and auto liability insurance?

One of the biggest differences is that general liability insurance is only for businesses. However, auto liability is available to individuals and businesses. Business owners also don’t need a separate commercial auto liability policy if they cover their business vehicles with general liability.

Additionally, the law doesn’t require general liability insurance, whereas nearly every U.S. state requires auto liability coverage for its drivers. So, business owners must buy enough coverage to meet their state’s minimum car insurance requirements if they don’t purchase general liability coverage.

Finally, auto liability coverage is limited to auto collisions and only covers damages you cause to another driver or pedestrians in a car accident. General liability covers injuries or death on your business property or those caused by your products and services.

What is the difference between general liability and business insurance?

Like auto liability, general liability coverage is limited and doesn’t apply to your business property. For example, you can’t file a claim with your general liability insurance if your business gets robbed, vandalized, or damaged. So, you need business insurance to protect your tangible and digital property in case of a loss.

Business insurance — or a business owner’s policy (BOP) — can provide income replacement, data loss restoration, and faulty equipment coverage, and additional protections against dishonest employees.

Business insurance provides the same liability coverage as a general policy, and it extends to your own property, including the building your business operates in and any company equipment.

Another big difference between general liability and business insurance is that BOP doesn’t offer the same auto liability protection. Some insurers provide BOP riders with commercial vehicle coverage, but you’ll incur higher rates.

How much does general liability insurance cost?

General liability insurance rates vary based on the business type and its location. Business size also impacts your rates, with bigger companies often paying higher rates.

For example, the more employees and commercial vehicles you have, the more likely your business will file a claim. Personal variables also affect your rates. If you have a history of filing insurance claims, you may have difficulty finding affordable general liability insurance quotes.

On average, general liability insurance costs $50 per month for $2 million in coverage.

Most insurance companies offer general liability limits of $1 million per incident but no more than $2 million per year. If you make additional claims or exceed policy limits, your insurance rates will rise at the next renewal.

Who needs general liability insurance?

It’s in the best interest of every business owner to consider general liability insurance. This coverage type will protect you from paying out of pocket if you or your business get sued for bodily injury or property damage.

If you’re unsure if you need general liability coverage, ask yourself the following questions:

• Is my business open to the public?
• Do I make deliveries?
• Have I hired temporary or part-time employees?
• Do I create advertising materials for my business?
• Do I use social media professionally for my business?

If you answered yes to one or more of the questions above, it’s a good idea to compare general liability insurance quotes and find a policy soon. Otherwise, you risk paying legal settlements, lawyer fees, and more out of pocket.

What You Need to Know About General Liability vs. Auto Liability Insurance Coverage

General liability and auto liability don’t provide the same kind of coverage, though general liability can cover vehicles you use for your business. However, the main difference between the two policies is that auto liability coverage is limited to auto collisions and general liability provides broader protections for business owners.

When do you need business auto coverage? If you have business vehicles and choose not to list them on your general liability policy, you’ll need to buy commercial auto coverage. Some companies may also offer a business add-on to your personal auto policy, but this feature isn’t available in every state.

When you know what kind of business and commercial auto insurance you need, you can start exploring your options for general liability coverage.

Start by comparing quotes from local insurance companies to see which offers the best rates in your area. To see which coverages fit your budget, you should also compare commercial auto and general liability quotes side-by-side.