General Liability (GL) is the foundation of business insurance — sometimes called "slip and fall" insurance, though it covers much more. If you're a Michigan business owner, here's a complete look at what GL does (and doesn't) cover.
What General Liability Covers
1. Bodily Injury to Third Parties
When someone other than your employee is injured because of your business. Examples:
- Customer slips on a wet floor in your store
- Visitor trips over your contractor's extension cord
- Falling sign injures someone walking past your building
2. Property Damage to Others
When your business activities damage someone else's property:
- Contractor's tools damage client's hardwood floor
- Restaurant fire damages neighboring tenant's property
- Delivery truck driver damages a building (separate from auto liability)
3. Personal and Advertising Injury
Non-physical injury claims:
- Libel, slander, defamation
- Copyright infringement in advertising
- False arrest / wrongful entry
- Invasion of privacy
4. Products and Completed Operations
Claims arising from your products or completed work — usually included in GL:
- Customer injured by your product after sale
- Contractor's completed work fails and causes damage
- Restaurant customer becomes ill from food
5. Medical Payments to Others
Small medical bills ($5K-$10K) for guest injuries, paid without litigation regardless of fault.
6. Legal Defense Costs
The insurer pays your legal defense — usually in addition to the policy limits.
What General Liability Does NOT Cover
Employee Injuries
Covered by workers' comp, not GL.
Auto Accidents
Need commercial auto.
Professional Mistakes
Errors in professional services need Professional Liability (E&O), not GL.
Property You Own or Rent
Your own building, equipment — covered by commercial property.
Intentional Acts
Deliberately harmful actions are excluded.
Liquor Liability
Restaurants and bars need specific liquor liability coverage.
Cyber Incidents
Data breaches need cyber liability.
Pollution
Environmental claims need separate environmental coverage.
How Much General Liability Do You Need?
Standard Limits
- $1M per occurrence / $2M aggregate (most common for small businesses)
- $2M / $4M for larger or higher-risk businesses
- $5M+ for higher-risk industries or large operations
Often Required Limits
- Contractor working on commercial sites: usually $1M+ required
- Working with municipalities: often $1M+ required
- Larger commercial leases: $1M-$2M typically required
Average Cost in Michigan
- Office-based services: $400-$700/year
- Retail (small): $500-$900/year
- Restaurant: $800-$2,000/year
- General contractor: $1,500-$3,500/year
- Specialty trades: Varies widely by trade
Common Add-Ons to General Liability
- Hired and non-owned auto
- Employee benefits liability
- Stop-gap (for workers comp gaps)
- Damage to premises rented
- Waiver of subrogation (when required by contracts)
- Additional insured endorsements (when required by clients)
Why You Should Add an Umbrella
A $5M commercial umbrella on top of $1M GL costs surprisingly little — often $500-$1,500/year — and dramatically expands protection. Modern injury claim verdicts easily exceed $1M.
Get a Michigan GL Quote
Knight Family Agency writes general liability for businesses across West Michigan. Fill out our quote form with your business details and we'll quote it through multiple carriers for the best combination.
Get a Free Michigan Business Insurance Quote
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