General liability is an essential coverage for most companies, as it protects the business's assets in the event of a lawsuit. General liability insurance can be purchased separately or as part of a business-owner's policy (BOP), which packages property and liability insurance into one policy.
Variables that impact the amount of coverage and premium include perceived risk and the state in which the business operates.
Under a general liability insurance policy, the insurer is obligated to pay the legal costs of a business in a covered liability claim or lawsuit. Covered liability claims include bodily injury, property damage, personal injury, and advertising injury (damage from slander or false advertising). The insurance company also covers compensatory and general damages.