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Every business faces risks, whether you run a small shop or manage large-scale projects with multiple vendors. One slip, accidental damage to a client’s property, or an advertising dispute can lead to expensive claims or lawsuits. That’s why general liability insurance is the foundation of a solid risk management plan. In this guide, Vertikal RMS explains what general liability insurance is, what it covers (and doesn’t), how it works, and why it’s so critical for protecting your business and reputation.
General liability insurance, sometimes called commercial general liability (CGL), helps protect your business from the financial consequences of third-party claims. It covers the costs if your company is found legally responsible for accidental injuries, property damage, or certain legal disputes related to advertising.
For example, if a customer trips and falls inside your store, or if an employee accidentally damages a client’s expensive flooring while painting a room, general liability insurance can help cover medical expenses, repair costs, legal defense, and settlements.
A typical general liability policy provides coverage for:
Understanding additional insured requirements becomes critical when contracts require you to extend your coverage to clients or property owners.
While general liability insurance covers a wide range of risks, it does not pay for:
  Injuries or illnesses sustained by your employees (covered by workers’ compensation)  Damage to your own business property or equipment (covered by commercial property insurance)  Professional mistakes or financial loss due to bad advice (covered by professional liability insurance)  Accidents involving company vehicles (covered by commercial auto insurance)  Intentional acts or illegal activities
Combining general liability with other policies helps ensure you’re fully protected.
General liability insurance is one of the most commonly required coverages for a reason:
Most businesses benefit from general liability coverage, especially if they:
  Interact with clients, customers, or the public on-site  Perform work at customer locations  Lease or own commercial property  Promote their products or services through advertising  Hire subcontractors or independent contractors
If you work with vendors, check what the subcontractor insurance requirements are to protect your projects. From retail shops and restaurants to contractors and service providers, general liability insurance helps manage risk and comply with contract obligations.
The cost of general liability insurance depends on factors like:
  Your industry and the level of risk associated with your operations  Size and annual revenue of your business  Location and number of employees  Your past claims history  The coverage limits and deductibles you choose
On average, small businesses might pay anywhere from a few hundred to a few thousand dollars annually. Industries like construction or manufacturing often pay more due to higher risk exposure.
Most general liability policies come with:
It’s important to know that general liability insurance is typically written on an occurrence basis. This means it covers claims for incidents that happen during the policy period, even if the claim is filed later. This is different from a claims-made policy (common in professional liability insurance), which covers claims only if the claim is made while the policy is active.
General liability forms the base layer of coverage but works best alongside other policies, such as:
  Workers’ Compensation Insurance: Covers employee injuries and lost wages.  Commercial Property Insurance: Protects your building, equipment, and inventory.  Professional Liability Insurance: Covers claims related to professional mistakes or negligence.  Commercial Auto Insurance: Covers vehicles owned or operated by your business.Combining policies gives your business more complete protection against various risks. Different industries face different risks, so check out the vendor insurance requirements by industry to see what coverage your business type needs.
Clients, landlords, and other partners often require proof that you have general liability insurance before they sign a contract or lease. This proof comes in the form of a Certificate of Insurance (COI).
A COI summarizes your coverage details, policy limits, and the insurer’s contact information. It’s not the policy itself but shows that valid insurance is in place. Providing up-to-date COIs helps avoid project delays and demonstrates your professionalism. Learn more about how to request certificates of insurance from vendors to ensure proper documentation.
To get the most value from your general liability coverage:
At Vertikal RMS, we help businesses take control of risk and insurance tracking. CertFocus by Vertikal RMS makes it simple to collect, verify, and manage COIs from contractors and handle vendor compliance efficiently, so you never have to worry about expired certificates or compliance gaps. With Vertikal RMS, you can:
  Automate COI collection directly from insurers  Get notified when a certificate is missing or out of date  Confirm that vendors meet your general liability requirements  Use COI tracking software to manage certificates with a secure, searchable system  Stay organized and audit-ready at all timesGeneral liability insurance is a smart investment that protects your business from the everyday risks that come with working with customers, operating in public spaces, or marketing your services.
Vertikal RMS goes further by managing certificates, ensuring vendor compliance, and supporting your risk management solutions - so you can focus on what matters most. Ready to simplify how you handle general liability and risk management? Contact Vertikal RMS today.
