About General Liability Insurance

All businesses, regardless of industry, face risks that should be covered by insurance. The most common and comprehensive type of policy business owners invest in is general liability insurance (or CGL).

Some of the risks CGL insurance covers are:

  • Bodily injury
  • Property damage
  • Medical payments
  • Legal defense and judgment
  • Personal and advertising injury

While businesses aren't legally required to carry general liability insurance, operating without it is extremely risky. If your business is sued, you could end up facing fees totaling hundreds of thousands of dollars (or more). Having a sufficient CGL policy in place to help compensate for these damages is the only way to prevent this type of event from devastating your business.

Learn more about the risks covered by general liability insurance.


Example 1: When a guest enters the bank on a rainy day, they slip on a patch of wet floor that lacks a warning sign. General liability insurance should cover the costs of any resulting injuries.

Example 2: An employee miscalculates the amount of money a customer took and accuses them of stealing. General liability insurance should cover your legal defense for any slander charges the customer files against you.

Example 3: You make a mistake in your advertising materials, and a customer sues you for a financial loss they incurred based on the incorrect information. General liability would help cover the customer’s losses or your legal fees to fight their claim in court.

Of course, this is not an exhaustive list of perils a general liability insurance policy will cover, and some conditions may result in a particular peril not being covered. It's always best to talk to your agent in-depth about the specifics of your policy to avoid blind spots in coverage.

Cost Of General Liability Insurance

On average, banks in America spend between $400 - $700 per year for $1 million in general liability coverage.

Check out the chart below for a snapshot of average CGL expenditure across a variety of industries:

Graph showing average price of general liability insurance prices per industry

Several factors will determine the price of your policy. These include your:

  • Location
  • Deductible
  • Number of employees
  • Per-occurrence limit
  • General aggregate limit

You may be able to acquire general liability insurance at a discounted rate by purchasing it as part of a business owner's policy (BOP) rather than as a standalone policy. A BOP is a more comprehensive solution that includes multiple forms of coverage, such as business interruption and property insurance.

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Other Types Of Coverage Banks Need

While general liability is the most important type of insurance to have, there are several other forms of coverage you should be aware of. Below are some other types of insurance all banks should obtain:

Commercial Property Insurance

Commercial property insurance protects the building in which you operate, the grounds within your property, and the business-related equipment you store there. If a fire or major storm damages your building, commercial property insurance would cover the cost of repairing your building and replacing your lost equipment and other business materials so you can recover quickly.

Workers’ Compensation Insurance

Most states require businesses to carry workers’ compensation insurance for their part-time and full-time employees. This coverage protects your employees if they become injured at work or fall ill after a work-related accident. It not only covers an employee’s medical bills and lost wages if they need time to recover, but also any disability or death benefits stemming from a work-related accident.

Professional Liability Insurance

Professional liability insurance protects your employees in the event they make an error on the job. If one of your financial advisors fails to inform a client of a rarely invoked clause on an annuity contract, for example, this coverage likely would pay for any losses the customer incurs due to negligence.

Data Breach Insurance

Banks are a magnet for potential hackers and virtual thieves. If your business loses sensitive information as a result of a data breach, this coverage would help pay to restore your computer network and compensate customers for any related financial losses.

Commercial Crime Insurance

Given the amount of cash stored in banks, commercial crime insurance helps protect your business from both employee and outsider theft. Because a single major event can result in a substantial financial loss, it helps to have as much protection as possible.

Types Of Coverage Some Banks May Need

In addition to the policies outlined above, there are a few other types of coverage your bank may require depending on certain aspects of your operations. Some of these might not apply to you, so be sure to ask your agent which policies are right for your business.

Commercial Umbrella Insurance

While your general liability insurance policy covers most claims, some accidents or lawsuits may be so catastrophic that they threaten to exhaust the limits of your primary coverage. Commercial umbrella insurance protects you from paying out-of-pocket for any legal fees and awarded damages that exceed your primary policy.

Additional Steps To Protect Your Business

Although it's easy (and essential) to invest in business insurance, it should not be your frontline defense. Yes, insurance will compensate for your business' financial losses after an incident occurs, but it's much better to avoid losses altogether.

With this in mind, here are three things you can do to better protect your business:

  • Use legally robust contracts and other business documents. (We offer free templates for some of the most common legal forms.)
  • Set up a limited liability company (LLC) to protect your personal assets. (Refer to our guide for step-by-step instructions on how to form an LLC in your state.)
  • Streamline your business' internal processes. This will remove unnecessary variables from common tasks and create a safe, consistent environment for conducting business.