General liability insurance: what it covers and what it doesn’t

Quick gut check

Your gut check

Your drill gets stolen overnight. Does general liability usually pay to replace it?

The quick version

General liability addresses certain claims about harm to other people or their property.

Does general liability insurance cover your tools?

Generally, no: protecting property you own is a different job from covering liability for damage to someone else’s property.

Someone steals your drill: Your business lost its own equipment. Protecting it is a separate property coverage issue.
Your drill damages a customer’s floor: Someone else wants your business to pay for damage. General liability can help with a covered claim.¹²

What does general liability insurance cover?

Someone says your business caused harm and wants you to pay. General liability can help with the costs of a covered claim, including legal defense.

Your drill damages a customer’s floor. They want you to pay for repairs. That’s a property damage claim.
A customer trips over your drill and gets hurt. They want you to pay for their injuries. That’s a bodily injury claim.
A competitor says your advertisement defamed them. Certain libel or slander claims fall under personal and advertising injury.

These illustrate the types of claims—not a guarantee that every incident is covered.¹

What does general liability not cover?

“General” can sound like “everything.” It isn’t. Your own property, employee work injuries, professional mistakes, and business auto risks commonly sit outside standard general liability coverage.

For example, a client saying your advice cost them money is different from a client getting hurt in your office.¹

How much does general liability insurance cost?

There is no reliable price for a business described only as “small.” Industry, location, and risk exposures affect the quote. The activities insured and the limits you choose matter to the comparison, too.

Keep the work description consistent when comparing proposals. Otherwise, you may be comparing apples to oranges.¹

Match coverage to the work you do

In the drill example, damage to a customer’s floor was the liability problem. Now think about your own work: how could someone get hurt or their property get damaged?

When you ask for a quote, describe the work in plain words: “We install cabinets in customers’ homes. Sometimes we cut and fit them on-site, and sometimes we hire another installer to help.”

Ask whether the policy covers those activities. Protecting your own tools is a separate property coverage issue.

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This is general educational information. Examples illustrate concepts; they are not accounts of actual claims. A licensed agent can evaluate your needs and the available policy terms. Coverage, eligibility, and requirements depend on your circumstances.