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What is Commercial General Liability Insurance?

Thursday, November 17th, 2011

If you operate a business in Maine, you may be asked for a certificate of insurance to prove that you have liability coverage. Some people think about liability insurance when they first start their business; others don’t think of it until someone asks for proof.

What Does General Liability Insurance Do?

GL insurance protects your business’ assets against lawsuits for:

Bodily Injury caused by your actions, or that happen on your premises.
Property Damage that you cause to the property of others.
Personal Injury, such as slander, libel or invasion of privacy.
Products and Completed Operations Liability – in case your product or work harms someone or their property.

How Much Business Liability Insurance Do I Need?

Liability insurance protects your assets. So, you should at least carry enough to protect the net worth of your business. You may also be required to carry a certain limit of liability coverage in order to perform work for a certain client. A $1 million per-occurrence limit is common. Higher limits are available, as are commercial umbrella policies, which provide even higher limits.

What General Liability Insurance Does NOT Protect Against

Professional Liability, such as improper design, malpractice, errors or omissions. You need separate Maine professional liability insurance to get this coverage.
Employment Practices Liability, such as wrongful termination, sexual harassment or employee benefits liability. You should purchase Maine Workers’ Compensation and Employment Practices Liability Insurance if you have these exposures.
Auto Liability. You should purchase Maine Business Auto commercial vehicle insurance if your company owns vehicles. If your company owns no vehicles, you should add Hired and Non-Owned Auto Liability coverage to your GL policy.
Pollution Liability. If your business uses pollutants, you should purchase separate insurance for this.