What does 'general liability insurance' cover?

General liability insurance is designed to protect contractors and businesses from claims related to bodily injury and property damage that occur in the course of their operations. This type of insurance covers instances in which a third party is injured, or their property is damaged as a result of your business activities, such as through accidents that occur on the job site.

For instance, if a visitor at a construction site trips over equipment and gets injured, or if a contractor accidentally damages a neighbor's property while performing work, general liability insurance helps cover the costs associated with these claims, including legal fees and any settlements or judgments.

It is distinct from other forms of insurance, such as workers' compensation, which would cover employee injuries, or automobile insurance, which covers vehicle-related incidents. Personal health insurance is also separate and pertains specifically to employee health needs, while damages due to natural disasters could be covered under different insurance policies, such as property insurance.