What Commercial General Liability Insurance Actually Covers

Introduction: Why General Liability Insurance Matters for Businesses

Commercial general liability insurance, often called CGL insurance, is one of the most important policies a business can carry. It protects your business from everyday risks that can lead to costly lawsuits, even if you operate carefully. From customer injuries to accidental property damage, general liability coverage helps ensure one unexpected incident doesn’t threaten your business’s financial stability.

This article explains what commercial general liability insurance actually covers, how it works, and why most California businesses rely on it as a foundational layer of protection.

What Is Commercial General Liability Insurance?

Commercial general liability insurance protects businesses against third-party claims for bodily injury, property damage, and certain legal costs related to business operations. It applies when someone outside your business claims they were harmed due to your business activities.

CGL insurance does not cover employee injuries or professional mistakes, but it plays a critical role in protecting against everyday liability risks.

What Does Commercial General Liability Insurance Cover?

Bodily Injury Claims

CGL insurance covers injuries to customers, vendors, or visitors that occur because of your business operations.

Examples include:

• A customer slipping and falling at your location
• A visitor injured during a meeting or site visit
• A delivery person hurt on your premises

Coverage includes medical expenses, legal defense costs, and settlements if your business is found responsible.

Property Damage Claims

If your business accidentally damages someone else’s property, general liability insurance may cover the cost of repairs or replacement.

Examples include:

• Damaging a client’s property while performing work
• Accidentally breaking equipment at a customer’s site
• Causing damage during setup, installation, or cleanup

This coverage applies only to third-party property—not your own business property.

Legal Defense and Settlement Costs

Even if a claim against your business is unfounded, legal defense can be expensive. Commercial general liability insurance helps cover attorney fees, court costs, and settlements related to covered claims.

Legal costs are often the most financially damaging part of a lawsuit, making this coverage especially valuable.

Personal and Advertising Injury

CGL insurance may also cover claims involving non-physical harm, such as:

• Libel or slander
• Copyright infringement in advertising
• False advertising claims
• Reputational harm caused by marketing activities

This protection is particularly important for businesses that advertise, publish content, or promote services publicly.

What Commercial General Liability Insurance Does Not Cover

While CGL insurance is broad, it does not cover everything. Common exclusions include:

• Professional errors or negligence
• Employee injuries or illnesses
• Damage to your own business property
• Auto-related accidents
• Cyber incidents or data breaches
• Intentional acts

Separate policies are required for these risks.

Who Needs Commercial General Liability Insurance?

Most businesses benefit from general liability insurance, including:

• Small businesses and startups
• Contractors and service providers
• Retailers and restaurants
• Home-based businesses
• Freelancers and consultants

Many landlords, clients, and vendors require proof of general liability insurance before working with a business.

How Much Coverage Do Businesses Typically Need?

Coverage limits vary based on industry and risk exposure. Many businesses carry general liability limits designed to protect against serious injuries or property damage claims. Choosing limits should reflect the size of your operations, client requirements, and potential lawsuit exposure.

How eWay Insurance Helps Businesses Get the Right Coverage

At eWay Insurance, we help California businesses understand and secure general liability coverage by:

• Explaining coverage limits and exclusions clearly
• Matching policies to your industry and operations
• Comparing multiple carriers for competitive pricing
• Helping meet landlord and client insurance requirements
• Ensuring coverage works alongside other business policies

Our focus is protecting your business without unnecessary complexity or cost.

Frequently Asked Questions

Is general liability insurance required by law in California?
No, but it’s often required by landlords, clients, or contracts.

Does general liability cover employee injuries?
No. Employee injuries are covered by workers’ compensation insurance.

Does general liability cover mistakes in my work?
No. Professional errors require professional liability insurance.

Does general liability cover product-related injuries?
Yes, product-related bodily injury claims are typically included.

How often should general liability coverage be reviewed?
At least once a year or whenever your business operations change.

Final Thoughts

Commercial general liability insurance covers some of the most common and costly risks businesses face—customer injuries, property damage, and legal defense costs. While it doesn’t cover everything, it’s a critical foundation for protecting your business and maintaining credibility with clients and partners.

eWay Insurance helps California businesses secure general liability coverage that fits their risk profile and supports long-term success. If you’re unsure whether your current policy provides adequate protection, now is the time to review your coverage and make sure your business is prepared.