General liability insurance protects a business against claims that it caused bodily injury or property damage to someone outside the business, such as a customer, vendor, or passerby. It is one of the most common commercial insurance coverages and is often the foundation of a business's insurance program.
What does general liability actually cover?
General liability, sometimes called commercial general liability or CGL, responds to third-party claims arising from your business operations, products, completed work, or premises. The Insurance Information Institute (III) describes it as coverage that "protects your business from financial loss should you be liable for property damage or personal and advertising injury caused by your services, business operations or your employees." In practice, that covers bodily injury and property damage to someone else, such as a customer slipping in your store or a contractor damaging a client's floor. It also covers personal and advertising injury, meaning claims like libel, slander, or copyright issues tied to how you market or communicate. And it covers the legal defense costs of fighting those claims, which usually apply even if the claim turns out to be groundless. Most policies also include limited medical-payments coverage for a non-employee injured on your premises, paid without needing to prove your business was at fault.
Example
A customer slips on a wet floor in a retail store and breaks their wrist. The customer sues the store for medical bills and lost income. The store's general liability policy covers the store's legal defense costs and, if the store is found liable or settles, the resulting payout, up to the policy's limits. If instead an employee had slipped on the same wet floor, that would be a workers' compensation claim, not a general liability claim, since general liability only responds to injuries and damage affecting people outside the business.
When it applies
General liability does not cover injuries to your own employees (that is workers' compensation), damage to your own property or equipment, or claims that your professional advice or services caused someone a financial loss (that is professional liability, sometimes called errors and omissions). It generally excludes pollution and liquor-related claims unless you add a specific endorsement. Many small and mid-size businesses buy general liability bundled with property coverage inside a business owners policy rather than as a stand-alone policy; larger or higher-risk businesses often carry it as its own commercial general liability policy instead.
Related terms
Related: business owners policy, workers' compensation, errors and omissions. See also: what general liability limits a Georgia small business should carry, the difference between general liability and professional liability, and commercial insurance.
Sources
Insurance Information Institute (III), "Commercial General Liability Insurance." iii.org/article/commercial-general-liability-insurance, accessed 2026-07-25.