General Liability Insurance - What You Need

Comprehensive General Liability coverage insures a business against accidents and injury that might happen on its premises, as well as exposures related to its products. It will protect you from payments for bodily injury or property damage to a third party, for medical expenses accruing to the underlying incident, for the cost of defending lawsuits including investigations and settlements, and for any bonds or judgments required during an appeal procedure.


No matter how diligently you remove all possible hazards from your business, you could be sued successfully for accidents resulting from simply the carelessness of a customer. General liability insurance is your last line of defense against devastating claims for things over which you may have little or no control.

Amount of Insurance Needed:

How much liability coverage do you need? Generally, experts say, $2 million to $3 million of liability insurance should be plenty. The good news is that liability insurance isn’t priced on a dollar-for-dollar basis, so twice the coverage shouldn't be twice the price. Review the exposures with you agent and have them coordinate with the carrier to implement a risk management program. There are agencies out there that do not actively practice this, in which case, contact me and I will be more than happy to get involved.

The price you pay for coverage depends on the size of your business (measured either by square footage, gross sales or by payroll) and the specific risks involved.  For a restaurant, the food and alcohol sales are separated to generate two rating tiers.  Generally, the higher your alcohol sales and greater the percentage to food, the higher your premium.

Common Exclusions:

One item of note with general liability insurance is that it tends to have a lot of exclusions. Be sure you understand exactly what your policy does and doesn't cover.  Always question your agent or broker about specific scenarios that are a concern for your specific needs.  In a lot of cases, you will hear "it depends"; in which case you need to have your agent run a claims scenario by the underwriter and get the response in writing - like a forwarded email perhaps.  It may seem a little silly at first, but trust me, this is your way of living and you must protect yourself from every angle.

You may want to purchase additional liability policies to cover specific concerns. For example, companies with a board of directors may want to consider “Directors and Officers” liability” (D&O). This type of insurance protects top executives against personal financial responsibility due to actions taken by the company.

Another excellent coverage to consider is Employment Practices Liability (EPL).  This insurance will protect you against any 'personal' suits that may arise.  For instance, sexual harassment, discrimination, defamation, wrongful termination, failure to promote and many more.  In my experience, I have found USLI as well as Philadelphia Insurance to be among the top carriers for EPL.  USLI tends to be a good fit for most businesses whereas Philadelphia can be an invaluable source for bars and restaurants.