General liability insurance for small business — what it covers and how it's rated

General liability (GL) insurance is the most fundamental commercial coverage — the foundation of nearly every commercial account. It protects businesses from claims of bodily injury, property damage, and advertising injury caused by their operations, products, or premises. Here's what every agent needs to know to place it correctly.

What does general liability insurance cover?

• Bodily injury — a customer slips and falls in your store, or a contractor injures a bystander on a job site
• Property damage — a worker accidentally damages a client's property while performing services
• Products and completed operations — injuries or damage caused by a product you sold or work you completed after the job is done
• Personal and advertising injury — libel, slander, copyright infringement, or false advertising claims
• Medical payments — minor medical expenses for third parties injured on your premises, regardless of fault
• Defense costs — attorney fees and legal costs, even for groundless claims

What GL does NOT cover

• Employee injuries — covered by workers compensation
• Professional mistakes or bad advice — covered by E&O / professional liability
• Damage to the business's own property — covered by commercial property insurance
• Auto accidents — covered by commercial auto
• Intentional acts
• Pollution — typically excluded (requires a pollution liability endorsement or separate policy)

How GL is rated

The rating basis for GL depends on the class of business:

• Gross receipts / revenue — the most common rating basis for service businesses, retail, and restaurants
• Payroll — common for contractors and some service businesses
• Area (square footage) — used for habitational and some retail risks
• Per unit — used for some manufacturing and product risks

The classification code (class code) determines the base rate, and the rating basis determines the exposure units. Getting the class code wrong is one of the most costly mistakes in commercial underwriting.

Standard GL limits

• $1M / $2M — the most common limit structure: $1M per occurrence, $2M aggregate
• $1M / $1M — sometimes required by certain carriers or markets
• $2M / $4M — for larger or higher-risk accounts

Most commercial umbrella policies require a $1M underlying GL limit. Clients with contracts requiring additional insured status often need $2M or higher.

Key intake questions for GL submissions

• Detailed description of all business operations
• Annual gross revenues (split by operation type if multiple)
• Total annual payroll and number of employees
• All business locations and square footage
• Subcontractor usage — annual cost and whether certificates are obtained
• Products sold and annual product revenues
• Prior GL claims in the last 5 years
• Current carrier and expiring premium

How AgencyAssist helps

GL intake is straightforward but detail-heavy — underwriters need precise revenue figures, accurate business descriptions, and complete loss history. Vague answers get declined or rated incorrectly. AgencyAssist walks clients through every GL intake question in plain English and delivers the answers in a format ready for your carrier applications.

Get complete GL submissions without the phone tag

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