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: A client stops into your office for a meeting and trips and falls over a garbage can that was left in the middle of an aisle, breaking his wrist. General liability insurance would likely cover the medical claims of the injury.

Example 2: While advising a client of their financial opportunities, one of your employees makes a mistake while explaining an annuity clause. General liability may be able to help cover the expenses should the client demand compensation for any ensuing losses.

Example 3: A client decides that your marketing campaign is dishonest or otherwise fraudulent. General liability will help cover the cost of fighting this claim in court, as well as pay any potential settlement costs.

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, financial consultants 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 Financial Consultants 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 financial consultants should obtain: 

Commercial Property Insurance

Property insurance covers the physical grounds, the structure of the building, and the contents within. Financial consultants typically have a variety of expensive computer equipment, and this insurance can help cover the cost of replacing or repairing it if it is damaged in a covered event like a fire or storm.

Professional Liability Insurance

Financial consultants have an extremely sensitive job, considering they give advice about a very personal matter. Professional liability insurance is available to help cover legal costs in case a client feels that the advice they were given caused them harm, whether it’s a result of negligence or an unexpected swing in the

Types Of Coverage Some Financial Consultants May Need

In addition to the policies outlined above, there are a few other types of coverage your financial consultant 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

Commercial umbrella insurance for a financial consultant firm may not be mandatory, but it is highly recommended. Umbrella insurance provides the additional financial resources needed to defend yourself against major legal claims when your general liability policy’s limits are reached.

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.