When it comes to general liability insurance, a lot of business owners think they’re covered for everything, but that’s not always the case. Let’s clear up some general liability misconceptions to help you understand what this policy really does—and doesn’t—cover.
- “General Liability Covers Everything My Business Faces”
The Truth: General liability protects your business from some major risks, like third-party injuries or property damage, but it doesn’t cover everything. If you need coverage for things like employee injuries or professional mistakes, you’ll need additional policies. - “General Liability Includes Product Liability”
The Truth: If you sell products, don’t assume general liability automatically covers defective product claims. Sometimes it does, but many businesses need separate product liability insurance for full protection. - “I Run a Home-Based Business, So I Don’t Need General Liability”
The Truth: Just because you’re working from home doesn’t mean you’re in the clear. Your homeowners’ insurance won’t cover business-related risks, like if a client gets injured while visiting your home office or using your product. - “It Covers Contract Disputes”
The Truth: General liability doesn’t protect you in the event of a contractual disagreement. If your business relies heavily on contracts, make sure you’ve got the right legal advice or specific coverage to manage those risks. - “General Liability Has Unlimited Coverage”
The Truth: All general liability policies have limits—meaning there’s a cap on what the insurance company will pay per claim and in total. It’s important to know those limits and make sure they’re enough for your business. - “It Covers Damage to My Own Property”
The Truth: General liability covers damage to other people’s property, not your own. If you want to protect your office, warehouse, or equipment, you’ll need commercial property insurance. - “One Policy Covers All My Business Locations”
The Truth: If you operate out of multiple locations, each one needs to be listed on your policy. Otherwise, you might not be covered at a location that’s left off the list! - “General Liability Covers Cyberattacks”
The Truth: General liability won’t protect you from cyber risks like hacking or data breaches. For that, you’ll need cyber liability insurance to keep your business safe from online threats. - “My Small Business Is Too Small to Need General Liability”
The Truth: No business is too small to be sued. Even a small business can face lawsuits that could be financially devastating without general liability coverage. Don’t wait until it’s too late.
General liability insurance is crucial for protecting your business, but it’s just one piece of the puzzle. Clearing up these general liability misconceptions helps you make smarter decisions about the coverage you really need.
