What Does General Liability Insurance Cover?
General Liability Insurance can protect small IT business owners by covering the costs associated with third-party bodily injuries and property damage. Basically, it means that if a client, the delivery guy, or a fellow building tenant gets injured while in your office, your General Liability policy can help cover the legal costs if you’re sued.
General Liability can also help if you inadvertently cause damage or injury while at your client’s office (e.g., you spill a Red Bull on their designer laptop bag or accidentally trip their assistant while you’re on Snapchat).
In addition, General Liability may address…
- Advertising injury lawsuits. Your policy can usually cover claims over false advertising, copyright infringement, trademark infringement, and more.
- Slander (spoken) or libel (written) lawsuits. If you trash talk a client or competitor and they sue you for defamation, your General Liability Insurance may cover the lawsuit costs. Pro tip: it's still wise to avoid social-media feuds.
- Third-party medical bills. If a visitor dislocates their shoulder after a slip and fall on your property, General Liability may help pay for their immediate medical expenses.
Your Commercial General Liability Insurance policy may help pay for:
- Attorney fees.
- Court costs.
- Settlements and judgments.
What General Liability Insurance Can't Cover
General Liability does not cover professional mistakes made by you or your employees. If you're sued over missing a project deadline or going over budget, you'll need Professional Liability Insurance (also called Errors & Omissions Insurance) to cover the claim.
General Liability Insurance also doesn’t cover damage to your own stuff. So if an ill-conceived chair jousting match damages one of your computers, General Liability can't cover the cost to replace it. For that matter, Commercial Property Insurance can't cover property losses stemming from tomfoolery either, so maybe lay off the jousting, okay?
Who Needs Commercial General Liability Insurance?
Even if you are a solopreneur, you may still benefit from General Liability Insurance. Many small IT business owners start out by moonlighting for a few clients and don’t think they need coverage. However, odd jobs and side gigs come with risk, so it’s a good idea to protect yourself. Check out “How Technology Contractors Can Secure General Liability Insurance” for more details on how to snag a policy of your own.
Your contractors may need their own General Liability policy, too. If you regularly hire contractors or freelancers, it’s a good idea to make sure they have their own coverage. For more on this topic, read “When to Ask a 1099 Contractor for Proof of General Liability Insurance.”