What Does General Liability Insurance Actually Cover?

Why General Liability Insurance Matters for Your Business

Whether you run a small shop, a freelance business, or a growing service company, general liability insurance is often your first—and most essential—line of defense. It protects your business when accidents happen, claims arise, or legal fees pile up.

Even if you do everything right, one unexpected incident could result in thousands of dollars in damages, legal bills, or settlement costs. That’s where general liability insurance steps in.

What General Liability Insurance Typically Covers

General liability insurance protects against third-party claims—meaning people outside of your business who suffer injury or property damage. Here’s a closer look at what’s usually covered:

1. Bodily Injury

If someone slips, falls, or is otherwise injured on your business property (or due to your operations off-site), this coverage pays for:

• Medical bills
  
• Emergency room visits
  
• Physical therapy or follow-up care
  
• Legal costs if the injured party sues you
  

Example: A customer trips over an extension cord in your office and breaks their wrist. Your policy can cover their medical treatment and your legal defense if needed.

2. Property Damage

If your business operations cause damage to someone else’s property, your general liability insurance can help pay for repairs or replacements.

Example: While installing equipment at a client’s location, one of your employees accidentally breaks an expensive piece of furniture. Your policy can cover the damage.

3. Personal and Advertising Injury

This part of your policy protects against non-physical harm like:

• Slander or libel (spoken or written defamation)
  
• Invasion of privacy
  
• Copyright infringement in your ads or website content
  
• Misuse of another brand’s slogan, design, or concept
  

Example: You run an online campaign that accidentally uses a competitor’s copyrighted photo. If they sue, your general liability policy could cover your legal defense and any settlement costs.

4. Legal Fees and Settlements

Legal defense is one of the most valuable aspects of general liability insurance. Even if a lawsuit is unfounded, you still need to hire an attorney, respond to court filings, and possibly pay to settle the dispute. Your policy covers:

• Attorney fees
  
• Court costs
  
• Settlements and judgments (up to your policy limits)
  

What General Liability Insurance Does Not Cover

It’s just as important to understand what isn’t covered by general liability insurance so you’re not caught off guard. It typically does not include:

• Employee injuries (requires workers’ compensation)
  
• Professional mistakes or bad advice (covered under professional liability or E&O insurance)
  
• Business vehicle accidents (requires commercial auto insurance)
  
• Damage to your own property or equipment
  
• Intentional harm or illegal acts
  

If your business faces these kinds of risks, you may need to add other policies or endorsements to get full protection.

Do You Need General Liability Insurance in California?

While it’s not legally required in California, many landlords, clients, and contractors require proof of general liability insurance before they’ll sign a lease or hire your business. It’s also a smart move if your business:

• Serves clients on-site or visits client properties
  
• Advertises online or through media channels
  
• Handles customer data or interacts with the public
  
• Wants to avoid paying legal or medical expenses out of pocket
  

How eWay Insurance Helps You Get the Right Policy

At eWay Insurance, we know that one-size-fits-all coverage doesn’t work for small businesses. That’s why we:

• Work with dozens of top-rated insurance carriers to find the best price and policy for your industry
  
• Explain exactly what’s covered and what additional protection you may need
  
• Help you get proof of coverage fast—so you can sign that lease, contract, or client agreement with confidence
  
• Adjust your coverage as your business grows or changes
  

Whether you’re a contractor, consultant, retailer, or freelancer, we make sure your business is protected from common risks—without overpaying.

Frequently Asked Questions

1. Is general liability insurance required by law?
No, but it’s often required by landlords, clients, or contracts. It's considered essential for protecting against lawsuits and claims.

2. How much does general liability insurance cost?
Costs vary based on your industry, location, coverage limits, and risk level—but many small businesses pay between $30–$100 per month.

3. Does it cover independent contractors I hire?
Not usually. Independent contractors typically need their own liability coverage. However, you can add coverage for subcontractors in some cases.

4. What’s the difference between general and professional liability?
General liability covers physical injuries and property damage. Professional liability (or E&O insurance) covers claims related to mistakes, negligence, or bad advice.

5. Can I bundle general liability with other coverage?
Yes. Many small businesses get a Business Owner’s Policy (BOP), which combines general liability with commercial property coverage and other protections.

Final Thoughts

General liability insurance is a foundational policy for any small business in California. It covers the unexpected injuries, property damage, and legal headaches that can threaten your company’s survival—whether or not you were at fault.

Let eWay Insurance help you find a policy that fits your business and budget. We make insurance simple, affordable, and effective—so you can focus on running your business with confidence.