5 Things General Liability Insurance Never Covers (#1 is Theft)
General liability does not cover personal theft. It only helps when a person sues you for damage to property, unsatisfactory work and injuries. So, it is crucial to understand the theft gap, whether you are looking for general liability insurance for a small business or you are a sole proprietor.
Many owners assume that small business general liability insurance coverage is an all-in-one safety net. However, there is a major difference between property and general liability insurance. A public liability insurance for small business policy protects you if you cause damage to others. But it rarely covers your own losses.
Does General Liability Insurance Cover Theft? (The Short Answer)
The most common question business owners ask is: Does business liability insurance cover theft? The answer is almost always no.
General liability insurance is designed to protect your business against “third-party” claims. This means it covers bodily injury or property damage you (or your employees) cause to someone else. It is not designed to protect your own business assets from criminals.
Current Statistics: 65% of small business owners cannot accurately describe what public liability insurance covers. Leading many to falsely believe it protects their own gears.
5 Things Your General Liability Policy Won’t Pay For
To stay protected, you need to know where your comprehensive liability insurance small business policy ends.
- Theft of Your Own Property: As mentioned, liability insurance is not for your own property. It only covers damage to other people’s property.
- Employee Injuries: This is covered by Workers’ Compensation insurance, not a General Liability insurance policy.
- Professional Errors: If you give bad advice or make a clerical error, you need Professional Liability, not General Liability.
- Auto Accidents: Business GL insurance policies exclude vehicle accidents. You need Commercial Auto for that.
- Intentional Acts: If you or an employee intentionally damages property or commits a crime, your insurance will not defend you.
For personalized coverage or consultancy, you can contact Smart Apple Insurance Brokers.
GL vs Property Insurance: Which Covers Theft?
Property and general liability insurance are two different protection plans. If you want to be covered when a thief breaks into your shop, you need to look at the differences:
| Coverage Type | What it Covers | Is Theft Included? |
| General Liability | Damages you cause to others | No |
| Commercial Property | Damage to your building/content | Yes |
| Business Personal Property | Stolen tools, gear, and inventory | Yes |
| Crime Insurance | GL insurance cover employee theft | Yes |
According to a current report, 77% of small businesses are underinsured. They are exposed to major risks due to a lack of core coverage beyond basic liability.
How to Find the Right Coverage
Don’t wait until a break-in to realize you have a coverage gap. Finding the right mix of business limited liability insurance and property protection is easier than ever.
- Get a Quote: Always compare general liability insurance quotes for small businesses to ensure you are getting a fair rate.
- Buy Online: You can now buy business liability insurance online in minutes, but make sure to add “Business Personal Property” if you need theft protection.
- Consult an Expert: Ask for a liability insurance quote for a small business that includes “Optional Riders” for theft and crime.
The process of finding the right coverage policy can be overwhelming. Getting it done by an insurance broker makes policies personalized and affordable.
Final Thoughts:
For business, you need more than one policy. For instance, as a construction business, you will need Liability Coverage, Worker Compensation, BOP and Contractor policies. We recommend exploring these policies with the help of an expert. That way, you will stay protected while keeping the insurance bills low.
If you are looking for cheap general liability insurance for small businesses that actually meets your contract requirements, we can help. Protect your future by getting a policy that covers the “5 things” GL leaves behind.
Common “Theft” Questions Answered:
Does commercial general liability insurance cover theft?
No, it covers legal fees and damages if a customer is hurt on your property.
Does general liability insurance cover employee theft?
No. For this, you typically need a specific Crime Policy or Fidelity Bond.
Does liability insurance cover theft of my equipment?
No, your tools and inventory are covered under a different policy called Business Personal Property (BPP).
Can You Get General Liability Insurance as an Individual?
Yes. Many freelancers and contractors operate as sole proprietors. You can easily get GL as an individual.
How much does general liability insurance cost for a sole proprietor?
Prices are often very affordable. But remember, even the best liability insurance for small businesses won’t replace your laptop if it’s stolen from your car.
Why is Liability insurance for a sole proprietorship important?
It’s vital for signing contracts, but always pair it with an “Inland Marine” or “Property” rider if you carry expensive gear.
Alicia Moreau
Alicia F. Moreau is a content writer at Smart Apple Insurance, specializing in clear, engaging, customer-focused insurance content.