Premises Liability insurance

Learn more about insurance coverage for accidents in the space where you do business.

Matt Crawford
By Matt Crawford
Published Oct 16, 2023
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What is premises liability insurance?

Premises liability is a legal term that often involves an injury or property damage that was caused by dangerous conditions or negligence at a business property.

Premises liability insurance for businesses can help cover expenses related to accidents that happen to visitors at your business.

Many different types of accidents may be covered by premises liability claims, including:

  • Slip and fall accidents
  • Injuries or damage caused by defective equipment
  • Improper or unsafe installation of fixtures and furnishings
  • Elevator and escalator accidents
  • Dog bites

When do I need premises liability insurance?

Many property owners and business owners consider premises liability insurance when they own or rent commercial property that people other than employees visit, including:

  • Customers/clients
  • Suppliers
  • Delivery services
  • Cleaners

How premises liability works with ‘duty of care’

As the business owner, you are held under the concept of “duty of care,” which means you have a legal obligation to make your business safe for visitors.

When it comes to premises liability and the level of “duty of care,” the law divides visitors to your business into three categories:


Invitees are people you invite or expect to come into your business, such as customers, clients or guests.

They are owed the highest duty of care. You should do your best to ensure that every aspect of your business they interact with is safe.

This goes beyond just eliminating obvious hazards like water on the floor. For example, if a customer comes to your business and sits in a chair and it breaks because of a defect, you could be held responsible for their injuries.


Licensees are people you might not expect, but are welcome at your business. A delivery person or utility worker is included in this category.

They are owed a lower duty of care compared to invitees but can reasonably assume that it’s safe to be on your premises.


Trespassers are people you don’t expect or want on your premises.

Generally, trespassers have no right to sue for personal injury if they get hurt on your property, with one exception being children hurt by an “attractive nuisance.” An “attractive nuisance” is anything that might tempt a minor onto your premises like a pool or trampoline.

Children aren’t allowed to trespass, but if it turns out that they get injured on an “attractive nuisance” that you made no effort to make secure, you could be found responsible for their injuries.

What happens if your business does not meet duty of care requirements

If someone is injured at your business and you are accused of not meeting the duty of care, you could face a personal injury lawsuit.

Premises liability insurance can potentially help with court costs, medical bills and settlements (up to your policy limits).

An important consideration — Each business and accident is unique. Read your policy documents closely when you are shopping for business insurance to make sure you have the premises liability coverage that is best for your business.

Premises liability insurance vs. general liability insurance

You can think of premises liability insurance as a part of general liability insurance.

General liability can help cover injuries and damage to property that doesn’t belong to you at your business (aka your business premises).

So yes, general liability overlaps with premises liability insurance.

For example, if someone trips and falls in your office, your general liability insurance could help cover their medical expenses.

Premises liability insurance coverage is important to consider if you’re running a small business that has visitors of any kind.

For many small businesses, a general liability policy can provide the coverage needed for protection against financial losses after an accident.

How NEXT can help protect your small business

Every business has its own unique risks and hazards. That’s why NEXT offers small business insurance tailored for over 1,300+ business types.

Whether you need general liability, workers’ compensation, professional liability, commercial auto or more, you can create a plan for your business with our fast, tailored and affordable options online.

Plus, save up to 10% when you bundle two or more policies with NEXT.

You can start a quote, customize your options and access your certificate of insurance online in about 10 minutes.

Start your instant quote today.

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Matt Crawford
About the author

Matt Crawford leads NEXT's content team. He's a small business insurance specialist and has worked with business owners throughout his career as a community journalist and content marketer.

You can find him at one of his many favorite local restaurants in the San Francisco Bay Area when he's not at work.

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