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Is General Liability insurance required by law?
General liability insurance is often the first type of coverage purchased by new business owners, but it’s not typically required by law.
However, some agencies might require coverage before issuing a professional license or permit. This is common in construction.
Clients might also ask for proof of insurance before they will work with you.
What is the difference between Professional Liability and General Liability?
This question comes up a lot. That’s why we wrote a detailed overview of general liability vs. professional liability.
Here’s a quick overview:
Professional liability insurance and general liability insurance offer similar benefits but there is one major difference — professional liability insurance can help cover professional mistakes and accusations of neglect. It's often related to advice you provide to a client or customer, not accidents in the workplace.
General liability insurance coverage can provide financial protection for accidents that are more physical, such as property damage and injuries involving people who are not your employees.
Learn more about the difference between professional liability and general liability.
What is General Liability aggregate?
General liability aggregate is a common insurance industry term you'll run into when exploring options for this coverage.
It's the maximum amount of money an insurance company will pay out during your policy period, which is usually one year.
If your business has expensive claims, you might hit your aggregate limit. In that case, you would be responsible for paying out of pocket to cover the remaining expenses.
Note that the aggregate limit is different from the “per occurrence” limit, which is the maximum amount your policy pays out per claim within the term of your policy.
For example, if you have a general aggregate liability limit of $300,000 and you’ve already made three claims in your policy term (usually a year) for $100,000 each, you’ve reached your aggregate limit and your insurance company won’t cover any additional claims.
It’s important to know your aggregate limit when you purchase general liability insurance. If you exceed your limit during your policy term, you will be responsible for paying for any expenses out of pocket that exceed the limit.
Learn more about aggregate limit of liability.
Does General Liability insurance cover property damage?
General liability insurance can cover expenses related to property damage, but only to property that does not belong to you.
Commercial property insurance can help protect the physical items you need to operate your business:
- Business equipment
- Furniture and furnishings
- Physical structures.
A business owner’s policy (BOP insurance) combines general liability insurance and commercial property insurance into one package that is usually less expensive than buying the coverage separately.
Learn more about BOP insurance.
Does commercial General Liability insurance cover automobile liability?
General liability insurance does not cover automobile liability or any expenses related to business or personal driving.
Commercial auto insurance can help cover expenses If you drive for business reasons:
- Injuries if you are responsible for an accident
- Property damage to other people’s property
- Repairs for your vehicle
- Towing and rentals if your vehicle is damaged
Learn more about commercial auto coverage.
Does commercial General Liability insurance cover theft?
General liability insurance doesn’t cover the theft of your own possessions but it might cover the theft of customer property.
If you’re repairing a garage door for a homeowner and someone steals her bike while you’re out back, general liability could help pay for a replacement.
But if any of your personal or business items are stolen, you won’t be covered without additional insurance.
You can bundle tools & equipment insurance with your NEXT Insurance general liability coverage if you are a contractor or own a cleaning business.
Will General Liability insurance protect me if my tools get stolen?
If you’re a contractor or own a cleaning business, tools & equipment insurance can protect your belongings if they are damaged or stolen.
Commercial general liability alone won’t provide tools and equipment coverage.
You might consider adding tools and equipment coverage if you work frequently at different locations because it will provide financial protection for your equipment wherever you go.
For example, if there’s a water leak at the new house you’re building and your power tools get soaked, your insurance could help pay for new tools.
Learn more about tools & equipment insurance.
Does General Liability insurance cover employee injuries?
General liability insurance can help pay for expenses if your business is accused of causing an injury, but injuries to you or your employee are not included.
Workers’ compensation insurance can help pay for medical expenses and lost wages if an employee is hurt on the job.
Most states legally require you to purchase coverage as soon as you hire an employee. It also provides benefits for business owners if they get hurt on the job if they purchase optional business owner’s coverage.
Learn more about workers’ compensation insurance.
Is General Liability insurance tax deductible?
General liability insurance premiums can typically be deducted from your taxes. It’s important to consult with a licensed accounting professional to make sure you qualify.
The IRS categorizes payments you make for this type of insurance to be both an “ordinary and necessary” business expense so be sure to keep a file of how much you pay every year for your policy.
How much General Liability insurance do I need?
Our small business insurance isn’t one-size-fits-all. Each business is unique and has different insurance needs.
The coverage you need depends on several factors, including:
- The type of work you do
- How many employees and subcontractors you have
- The level of risk your company faces
- The state where you work
- When you complete an instant quote online with Next, you can review options and adjust limits to your preference.
When will I get my policy documents and proof of insurance?
With NEXT, it can take less than 10 minutes to purchase coverage and you’ll have instant access to policy documents and your certificate of insurance (COI).
You can access your documents and COI 24/7 online or in the NEXT app for iPhone or Android.
Learn more about our digital certificate of insurance.
How do I make a General Liability insurance claim?
You can file a claim anytime and from anywhere online or in the NEXT app.
You’ll be asked to share the details of what happened and to provide relevant photos and documentation. We strive to make claims decisions within 48 hours so you can get back to focusing on your work.
Check out our claims page for more details.
How quickly are general liability claims resolved?
Often, claims decisions are made within 48 hours, although some claims require more time.
The specific details of the claim, how bad the damage is, how many people are involved, the availability of information and other factors all contribute to the decision process.