All businesses need strong commercial insurance coverage, no matter what their size or scope. However, it is small businesses that are often most financially vulnerable to operational liabilities. That’s why it’s all the more important for these businesses to have robust coverage in place.
One overtly essential benefit for every business is general liability insurance. This coverage is designed to specifically protect the business when its mistakes cause harm to others. In some cases, this type of insurance is even required of certain businesses. 
Let’s take a closer look at how this coverage works and what it can do for your business.
The Basics of General Liability Insurance
A general liability policy is often referred to as at-fault insurance. It helps an insured business take responsibility for its actions when it negligently causes harm to others, such as its customers. In other words, this form of coverage can provide protection if a business is found responsible for injuring a third party or damaging their property.
For example, if a customer falls while visiting your commercial property, sustains an injury and sues your business as a result, general liability coverage can help compensate the customer for their medical costs and may be able to reimburse your business for any associated legal expenses.
Even though you might not have intended for such an accident to happen, that doesn’t mean you won’t be responsible for it. Therefore, liability insurance enables you to respond to these challenges without spending incalculable reserve funds. Such a policy can often include several types of coverage:
- Bodily injury coverage applies to third-party injuries sustained on your business’s property or as a result of your business’s activities.
- Property damage liability insurance applies to third-party property damage caused by your business’s actions.
Additionally, your policy may also include other forms of coverage—including completed operations liability coverage and personal or advertising injury coverage. Consult your insurance agent for more information about your specific coverage features.
When Is General Liability Coverage Required?
There are a few instances where a general liability insurance policy might be required of a business. This includes the following:
- Any business that wants to apply for a professional license usually must have general liability insurance for their practice. Professional licenses are generally required for real estate agents, medical practices, lawyers, therapists and more.
- Some small businesses are required to purchase this coverage if they operate from a physical location. Specifically, landlords and mortgage lenders often require clients to purchase general liability insurance.
- If a business wants to enter a contract with a larger company, the larger company will likely ask the business to purchase general liability insurance beforehand.
The cost of general liability coverage depends on the business’ location, industry and policy limits. You may also save money by bundling this insurance with commercial property insurance into a business owners policy (BOP), which combines a variety of insurance policies into one comprehensive package for small businesses. Talk to your insurance agent for more information.