If you run a small business in Raleigh, sooner or later someone will ask you for proof of general liability insurance. It might be the landlord for a storefront off Glenwood Avenue, a property manager in North Hills, a general contractor hiring you for a job in Wake Forest, or a corporate client in RTP sending over a vendor packet. General liability is the policy most businesses start with, and it's also one of the most misunderstood.
This guide explains what general liability insurance does, where its gaps usually are, how limits and certificates work, and what to have ready when you shop. It's general information, not a quote or legal advice. Every policy has its own terms, and the right setup depends on your business.
What general liability insurance covers
Commercial general liability, often shortened to CGL or GL, protects your business when someone outside the company claims you hurt them or damaged their property. Most policies are built around a few core coverages.
Bodily injury and property damage
This is the heart of the policy. A customer slips on a wet floor in your shop. A cleaning crew knocks over and breaks a client's expensive lamp. A handyman's ladder falls and dents a homeowner's car. If your business is legally responsible, general liability can pay for the injury or damage, and it typically pays for your legal defense too, even when a claim turns out to have no merit.
Products and completed operations
If you sell products, or your work keeps going after you leave the job site, this coverage matters. A bakery in Cary whose product makes someone sick, or a contractor whose installed railing fails months after the job wrapped up, may face claims long after the sale or the work. Products and completed operations coverage is designed for those situations, and it often has its own aggregate limit.
Personal and advertising injury
This covers certain non-physical harms, such as claims of libel or slander, or using someone else's advertising idea in your marketing. It has specific definitions, so it doesn't cover every online or advertising dispute, but it's a useful layer for businesses that market heavily.
Smaller pieces worth knowing
Many policies also include medical payments coverage, which can pay small medical bills for someone hurt at your premises regardless of fault, and damage to premises rented to you, which can help if you accidentally damage a space you lease, such as a fire in your rented suite. These sublimits are usually much smaller than the main limits, so it's worth checking them against your lease.
What general liability usually doesn't cover
Most surprises with general liability come from assuming it covers everything. These are the most common gaps, and the policy that usually fills each one.
- Your own property. General liability covers damage to other people's property, not your building, equipment, tools or inventory. That's commercial property insurance, often included in a business owners policy. Tools that travel to job sites are often covered under inland marine coverage.
- Professional mistakes. If a client says your advice, design or service cost them money, that's usually errors and omissions insurance, also called professional liability.
- Employee injuries. Injuries to your own workers fall under workers compensation. North Carolina generally requires it once a business regularly employs three or more people. Our workers comp guide for Raleigh employers covers the details.
- Vehicles. Accidents in cars, trucks or vans used for the business are generally excluded from general liability. You'll usually need business auto insurance, which our commercial auto guide explains.
- Data breaches and cyber attacks. Customer data exposure, ransomware and similar events are usually handled by cyber liability insurance.
- Employment claims. Claims of wrongful termination, discrimination or harassment by employees fall under employment practices liability insurance.
- Intentional acts and your own faulty work. Policies generally exclude intentional harm, and many don't pay to redo your own defective work, even if they may cover damage it causes to other property.
Understanding limits
A general liability policy usually lists several limits. You'll often see an each-occurrence limit, which is the most the policy pays for a single incident, and a general aggregate limit, which is the most it pays for all covered claims during the policy period. Products and completed operations often carry a separate aggregate.
A common structure in contracts and leases is $1 million per occurrence and $2 million aggregate, but that's a market convention, not a rule. Some clients require more, some require less, and some ask for specific endorsements. If a contract asks for higher limits than your general liability provides, a commercial umbrella policy can often add another layer over your liability, auto and employer's liability coverage.
Most small business general liability policies are written on an occurrence basis, which means the policy in force when the injury or damage happened responds, even if the claim comes in later. Some are written on a claims-made basis, which works differently, especially when you change companies. Ask which kind you have.
Certificates of insurance and additional insureds
When a landlord or client asks for proof of insurance, they're usually asking for a certificate of insurance, often an ACORD 25 form. It lists your coverages, limits, policy numbers and dates. It's a snapshot. It doesn't add coverage on its own.
Many contracts go further and ask you to name the client or landlord as an additional insured, sometimes with wording like "primary and non-contributory" or "waiver of subrogation." Those requirements are handled by endorsements on your policy, and some policies include them automatically for written contracts while others need them added. Send your agent the actual contract language before you sign, so you know whether your policy matches. Current Shadow Lake clients can request a certificate online.
How general liability is priced
Insurance companies look at things like your type of business and what you actually do, your revenue or payroll, where you operate, how long you've been in business and your claims history. A home-based bookkeeper and a roofing contractor have very different liability risks, so their prices aren't comparable. Describe your operations accurately. Leaving out part of what you do to get a lower price can lead to a denied claim later.
If you work from home, our guide to home-based business insurance in Raleigh explains why a homeowners policy usually isn't enough. Contractors should also read our contractors insurance guide.
What to have ready for a quote
- A clear description of what your business does, including any side services
- Annual revenue and payroll estimates, and number of employees
- Business address, and whether you work at customers' locations or job sites
- Years in business and any past liability claims
- Any lease or contract insurance requirements you need to meet
- Your current policy's declarations page, if you have one
Talk with a Raleigh independent agency
Shadow Lake Insurance is an independent agency in North Raleigh. We compare general liability and package policies from the insurance companies we represent, read your lease and contract requirements with you, and help you fill gaps before a claim finds them. We work with businesses in Raleigh, Cary, Wake Forest, Garner, Morrisville and across the Triangle. For a broader overview, see our guide to essential business insurance for Raleigh companies.
Shadow Lake Insurance 8398 Six Forks Road, Suite 202, Raleigh, NC 27615 (276) 597-9844
Ready to compare? Start a general liability quote, request a quote for your whole business, or call our office.
Sources
- North Carolina Department of Insurance, business insurance information
- North Carolina Industrial Commission, workers' compensation information
- U.S. Small Business Administration, get business insurance
Coverage subject to policy terms, conditions, and underwriting. This article is general information, not a description of any specific policy, a quote or a promise of coverage or savings. Review your policy or talk with us about your situation.