Overview of General Liability Insurance
General liability insurance covers claims from people outside your business for bodily injury, property damage you cause, and personal and advertising injury, along with the cost of defending those claims. It does not cover your professional mistakes or your employees’ injuries, which fall to professional liability and workers compensation. In California it is the coverage nearly every commercial contract asks for before work begins, and two provisions of state law shape what it can and cannot do.
General liability is the foundation most California businesses build on. It responds when someone outside your business is hurt or has property damaged, and it stands between a routine accident and a claim that could threaten what you have built. Schneiderman Insurance Agency writes it for contractors, retailers, restaurants, offices and service businesses across the Los Angeles area, and this page covers what we review with each of them.
What does California law fix about a liability policy?
Two things every general liability policy issued here carries whether or not the wording says so. Under Insurance Code section 11580, a liability policy delivered in California is construed to include two provisions. Your insolvency or bankruptcy does not release the insurer. And a person who wins a judgment against you can recover on it directly from the insurer. That second provision is why the policy protects the injured party as much as it protects you: once a judgment exists, the claimant does not need you to pay it. Under section 533, no insurer is liable for a loss caused by the wilful act of the insured, and no policy wording can change that. Negligence, including gross negligence, is insured; a deliberate act is not. That line is the reason an assault by an employee or an intentional trespass falls outside the policy however the claim is pleaded.
The Insurance Code sections here are as published by the California Legislative Counsel at the time of writing. They are amended from time to time, and that office publishes the current text.
What is covered by General Liability Insurance?
What does general liability actually cover?
- Third-party bodily injury, such as a customer who slips in your space.
- Third-party property damage you cause during your work, including damage to a client’s premises.
- Personal and advertising injury, including certain libel, slander and copyright claims arising from your advertising.
- Products and completed operations: injury or damage after the work is finished or the product is sold, which is the part that matters most to contractors and manufacturers.
- Defense costs, which on most forms are paid in addition to the limit and which the insurer controls.
- Medical payments for minor third-party injuries, paid without a finding of fault.
What it does not cover, and where those exposures go. Your own property is commercial property. Damage to the specific work you are performing is excluded by most forms as a business risk. Pollution is environmental liability. Liquor, where you sell or serve it, is liquor liability. And anything a vehicle does on the road is commercial auto.
Things to know about your general liability policy
Why General Liability Insurance is important
Because California clients, landlords and general contractors ask for a certificate of insurance and additional insured status before work starts. What they ask for is governed by a statute most of them have not read. Under Civil Code section 2782, California limits how far a construction contract can make you indemnify the other party for its own negligence. Under section 2782.05, for contracts entered into since 2013, the same limits apply to what a general contractor can require of a subcontractor. Where the line falls in your contract is your attorney’s question. So an additional insured endorsement on your policy protects the general contractor for your work, not for theirs. We read the insurance clause of the contract before we issue the certificate, because the certificate should describe what the policy does, not what the contract wishes it did.
How long after a job can a claim arrive?
For construction work, up to ten years. Under Code of Civil Procedure section 337.15, an action for a latent construction deficiency can be brought up to ten years after substantial completion. A general liability policy responds to occurrences during its policy period. A claim in year eight is a claim against whichever policy was in force when the damage occurred, often the carrier you had three renewals ago. Keeping copies of expired policies is not paperwork for its own sake; it is how a completed-operations claim gets tendered to the right insurer.
The Civil Code and Code of Civil Procedure sections here reflect the statutes as published at the time of writing. The Legislature amends them from time to time, and the Legislative Counsel publishes the current text.
Who needs General Liability Insurance?
Retailers, contractors, consultants, restaurants and office-based businesses all typically carry it. Landlords require it before a lease is signed, clients before a contract is awarded, and general contractors before a subcontractor sets foot on a site. Anyone who hires subcontractors needs to collect their certificates, because a subcontractor without coverage becomes your exposure when their work injures someone. One million dollars per occurrence is the common contract request; it is a market convention, not a legal minimum.
How to get General Liability Insurance?
Tell us about your business and how it operates, including what your contracts require of you. We review your exposures and the options with you, explain what general liability does and does not cover, and walk through the limits so you can decide where to set them. If you hire subcontractors, we review their certificates against your contract and your own carrier’s requirements. Expect a premium audit at renewal; general liability is rated on receipts, payroll or square footage, and the audit reconciles the estimate with what actually happened. At renewal we stay with you, and if a claim comes, we help you tender it to the right policy.
Start Your General Liability Insurance Quote
Schneiderman Insurance Agency makes the process of finding General Liability insurance convenient for you. Tell us about your situation, we review your risks and options with you, we help you put the right coverage in place, and we stay with you at renewal.
Areas we serve
We write general liability insurance across the San Fernando Valley, greater Los Angeles, the Conejo Valley and Ventura County, the Santa Clarita Valley, and the South Bay, from our office in Granada Hills. For local detail, see general liability insurance in Downtown Los Angeles, Burbank, Glendale, Torrance, Chatsworth, and Van Nuys. Or browse all the areas we serve in California.
Injury caused by something you sold is product liability, and limits above the general liability policy come from a commercial umbrella. The wider program is on our business insurance page.
