General Liability Insurance
General liability (GL) insurance covers a business against third-party claims of bodily injury, property damage, and personal or advertising injury. It is the single most common commercial insurance policy — virtually every business needs it, and virtually every commercial lease, vendor contract, and government license requires it. Standard GL policies follow the ISO Commercial General Liability (CGL) form and are written with limits of $1 million per occurrence and $2 million general aggregate.
Why General Liability Insurance Matters for Independent Agents
General liability is the policy that gets quoted more than any other in a commercial agency. Whether a prospect is a solo landscaper, a 50-employee restaurant, or a tech startup leasing its first office, the conversation almost always starts with "I need general liability." For agents, GL is both a relationship starter and a cross-sell foundation — once you write the GL, you're positioned to add workers' comp, commercial auto, umbrella, and professional liability.
The quoting process for GL is also where agents lose the most time. A single GL submission requires completing the ACORD 125 and ACORD 126 forms, then entering that same data into each carrier's portal individually. For an agent quoting through Hartford, Progressive Commercial, and Hiscox, that means entering the business name, address, class code, revenue, and loss history three separate times. On a busy day with five new submissions, that's 15 portal logins and 15 rounds of data entry — before a single quote comes back.
Understanding GL pricing factors helps agents set client expectations early. Carriers rate GL primarily on revenue or payroll (depending on the class code), claims history, years in business, and the specific ISO class code assigned to the operation. A cleaning service and an electrical contractor with identical revenue will see dramatically different GL premiums because the underlying risk profile is fundamentally different — contractors in higher-hazard class codes consistently pay multiples of what lower-risk service businesses pay.
How General Liability Insurance Works
The standard CGL policy covers three categories of claims:
- Bodily injury and property damage (Coverage A) — A customer slips on a wet floor in your client's store, or a plumber accidentally damages a homeowner's hardwood floor during a service call. Coverage A responds to these third-party claims.
- Personal and advertising injury (Coverage B) — Covers claims like libel, slander, false arrest, and copyright infringement in advertising. A marketing agency accused of using a competitor's copyrighted tagline would trigger Coverage B.
- Medical payments (Coverage C) — Pays small medical expenses (typically up to $5,000) for third parties injured on the business premises, regardless of fault. This is a goodwill coverage designed to resolve minor incidents before they become lawsuits.
GL policies are written on an occurrence basis, meaning they cover incidents that happen during the policy period regardless of when the claim is filed. This is a critical distinction from claims-made policies used in professional liability — and one that agents should explain clearly to clients.
Standard GL limits follow a common structure:
| Limit Type | Typical Amount |
|---|---|
| Each occurrence | $1,000,000 |
| General aggregate | $2,000,000 |
| Products/completed operations aggregate | $2,000,000 |
| Personal/advertising injury | $1,000,000 |
| Damage to rented premises | $100,000 |
| Medical expense | $5,000 |
Many clients need higher limits. Landlords frequently require $2 million per occurrence in leases, and general contractors often demand $5 million or more from subcontractors through additional insured requirements. When GL limits aren't sufficient, agents layer a commercial umbrella policy on top.
GL does not cover the business's own property, its employees' injuries (that's workers' comp), professional mistakes (that's E&O), or vehicles (that's commercial auto). New agents sometimes assume GL is "all-purpose business insurance" — it's not. Explaining these gaps is where agents add real value and open the door to writing additional lines.
Related Terms
- Business Owner's Policy (BOP) — Bundles GL with commercial property coverage at a discount for eligible small businesses
- Umbrella Insurance (Commercial) — Provides additional limits above the underlying GL policy when $1M/$2M isn't enough
- Commercial Package Policy — Combines GL with other coverages in a customizable format for businesses that don't qualify for a BOP