General Liability Insurance (Commercial General Liability)
General liability insurance covers statutory damages claims by third parties arising in connection with the operation of a policyholder's business.
Comparison profile
- Trigger
- Occurrence
- Insured interest
- The policyholder's statutory liability for bodily injury, property damage, and resulting financial loss caused to third parties in connection with the insured business operations.
- Rating basis
- Turnover, Payroll or number of employees, Industry and activity classification, Selected limit per occurrence and annual aggregate
- Typical limits
- A per-occurrence limit with an annual aggregate, often as a combined single limit for bodily injury and property damage.
- Typical deductibles
- A per-claim deductible, typically modest for SME risks and higher for industrial or hazardous operations.
- Target segments
- SME, Industry, Retail and services, Multinational programmes
Insured events
- Bodily injury or property damage caused to visitors, customers, or passers-by
- Damage caused by employees in the course of their duties
- Damage arising from completed work or delivered services
- Tenant's or occupier's liability for the business premises, where included
- Product-related claims, where insured as a module
Key exclusions
- Pure financial loss without bodily injury or property damage
- Intentional acts
- Damage to property owned or hired by the policyholder
- Professional errors arising from advisory or design services
- Gradual environmental pollution damage, unless separately insured
Concept
General liability insurance covers a company’s statutory liability for bodily injury, property damage, and resulting financial loss suffered by third parties in connection with the insured operations, for which the policyholder is liable under general civil liability rules.
Scope of Coverage
Coverage regularly includes both assessing the question of liability and defending against unfounded claims (defense function) as well as indemnifying valid claims for damages (indemnity function). Typical coverage modules include general operational liability, product liability, and optionally environmental liability and extended product liability.
Relevance for Companies
General liability insurance is among the most existentially important insurance policies for companies of any size, since a single large loss — for example from a defective recall or a severe bodily injury — can threaten a company’s financial substance without adequate insurance coverage.
Comparison and delineation
General liability insurance is the broad base layer of a company’s liability programme and is regularly complemented rather than replaced by specialised covers: product liability extends the same protection to defects in goods placed on the market, environmental liability fills the gap left by the general policy’s limited treatment of gradual pollution and public-law remediation costs, and umbrella insurance sits above the general liability limit to provide additional capacity or drop-down protection once it is exhausted. Professional indemnity insurance, by contrast, is not complementary but distinct, since it addresses pure financial loss from advisory or design errors rather than bodily injury or property damage.