What’s the Difference Between Premises Liability Insurance vs General Liability Insurance?

• 15.7% would try to get a loan from a financial institution
• 11.2% don’t know what they’d do
• 10.8% don’t believe there is a potential for expensive losses or damages to their businesses
• 8.6% would try to borrow money from family or friends
• 7.5% would declare bankruptcy
• 4.9% would sell their businesses

None of these perspectives is a practical plan to safeguard their financial wellbeing. Resolving even one legal dispute, accident, or injury to a customer or other third party could cost tens of thousands of dollars.

Let’s face it: there are downsides to owning a business. Any number of things can go sideways unexpectedly, and as the business owner, the onus is on you to deal with those situations, such as:

• A customer or delivery person visiting your store or office stumbles over uneven carpeting or flooring and tumbles to the ground. They fracture a wrist or ankle and demand you pay for their medical expenses.
• Your shop is burglarized in the middle of the night, and office equipment, electronics, and merchandise are stolen.
• A sudden and violent windstorm descends on your community and severely damages the roof of your warehouse.
• One of your employees accidentally damages expensive furniture while doing form or installation work inside a customer’s home or while making a delivery.

Different types of insurance coverages exist for each scenario above to provide protection or financial support for such possibilities.

Among them are premises liability and general liability insurance. Each covers different liability aspects related to your business property and operations. Here’s a quick breakdown of what these two essential coverages provide:

What Is Premises Liability Insurance?

Although there may be some overlap between the two, premises liability insurance is not the same as general liability insurance.

Sometimes referred to as basic liability, premises liability insurance provides financial support for third-party bodily injuries to customers or visitors that occur on a commercial property or at a home-based business because of unsafe conditions. In either scenario, think of the areas where you and your staff work, including:

• An office, studio, warehouse, or retail store
• The walkway and entrances to your business property
• The land around your business property
• The driveway and parking lot at your property

However, because it’s limited in scope, premises liability doesn’t cover third-party injuries to others that occur elsewhere than your business property.

What Is General Liability Insurance?

General liability insurance, or commercial general liability insurance, is broader in scope, and includes premises liability insurance. It covers third-party bodily injury or third-party property damage on your business property and elsewhere, such as at a client’s location.

Its coverage is more extensive. It includes premises liability and a host of other protections such as product liability, contractual liability, and tenants’ legal liability insurance. 

Because general liability offers more comprehensive protection, it also costs more than a premises liability policy. Furthermore, it provides financial support if you are sued for damages by paying for your legal fees and any out-of-court settlement or compensation awarded to the plaintiff by the court.

How Does Premises Liability and General Liability Insurance Cover Shared Properties?

If you are a tenant of a mixed-use commercial building or a retail plaza and don’t own the commercial space where your business operates, you need either premises liability or general liability insurance.

Although your landlord may be responsible for maintaining common areas of a shared property, such as lobbies, corridors, walkways, and entrances, check the terms of your lease to be sure.

How to Get Low-Cost Business Property Insurance

Protect your assets and finances with a low-cost, customized business insurance policy from Zensurance.

Fill out our online application for a free quote in less than five minutes.

Our licensed brokers will shop our partner network of more than 50 insurers to find the policy that best suits your needs. They can also answer any questions you have to ensure your protection.

– Updated September 4, 2024.