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General Liability Insurance for IT Professionals

General Liability Insurance for IT Professionals

Get a quote on General Liability Insurance

For IT businesses that regularly host visitors or perform work at other locations, General Liability Insurance is a critical coverage to consider. General Liability Insurance can cover your business for unintentional third-party injury or damages.

What is General Liability Insurance?

General Liability Insurance, also called Commercial General Liability Insurance or CGL, is a common type of business insurance that covers accidental damage to third parties. If your business unintentionally causes property damage, bodily injury, personal injury, or advertising injury, the insurance company will pay for any resulting legal fees and damages. This insurance can help protect your company if someone else is harmed by your business and sues.


It’s important to note that General Liability Insurance only provides coverage for claims made by third parties, such as clients, vendors, or landlords. It does not cover damages to your business, property, or employees.

Why do IT professionals need General Liability Insurance?

If your IT firm performs services at other locations or has meetings with clients at your offices, there’s always a chance that an accident could occur. Even if your business does not typically require your employees to visit other locations or host clients, it probably receives deliveries or requires the services of technicians at times. If an incident involving personal injury or property damage occurs and your company is sued, it can result in costly legal fees and settlements, which CGL can cover.

General Liability Insurance covers risks that almost all companies are exposed to and provides a layer of financial security that can provide business owners with some peace of mind. Although it’s not legally required, many clients and leases may require businesses to have CGL, and holding the coverage may also give your customers more confidence in your business, knowing that you’ve taken the prudent step of securing basic insurance coverage.

What does General Liability Insurance cover?

General Liability Insurance typically provides coverage for three categories of claims: property damage, bodily injury, and personal and advertising injury. CGL covers damages, medical payments, and legal and defense costs related to these lawsuits. A primary benefit of General Liability Insurance is that it allows your business a financial cushion in the face of a lawsuit so that you can continue to operate without being bogged down by legal costs.

Property Damage

If you or your employees accidentally damage another person or company’s property, CGL will cover the costs of replacement or repair.


IT professionals should note that this coverage only applies to physical damage to property and would not apply to electronic forms of property, including data or software programs. It’s also important to remember that General Liability Insurance does not provide coverage for damage to your own business property, only for damage to the property of others. You would need commercial property insurance to cover your business’s property.

General Liability Insurance also excludes personal property belonging to others that is under your care, custody, or control. If your business centers on working with others’ property, you may want to consider additional coverage.


For IT businesses that want to protect against such incidents, consider adding voluntary property damage, which should cover the standard CGL exclusion for personal property that is under your care, custody, or control. For businesses that take temporary possession of customers’ property, like an electronics or computer repair business, consider bailee’s customer insurance.

Bodily Injury

If a person who isn’t one of your employees is injured on your property or during the course of your business operations, CGL will pay for damages. This might include medical expenses, pain and suffering, lost wages, funeral expenses, and legal fees if a suit is filed.


Products and Completed Operations

If your company makes a product or provides a service that is found to cause property damage or bodily injury, Commercial General Liability Insurance typically provides coverage under the products and completed operations hazard. This coverage specifically applies to property damage or injuries that take place away from your business’s premises and are caused by your product or completed work. If the incident occurs on your premises or while your work is in progress, it would be covered by the bodily injury and property damage sections of your CGL policy.

Products and completed operations coverage does not cover damage to your product or completed work itself; it only applies if the product causes damage to a customer’s other property.


Personal & Advertising Injury

The personal and advertising injury portion of CGL differs from property damage and bodily injury coverage in that it covers actions that may be intentional but cause unintended consequences. The most relevant examples for IT businesses are slander or libel and copyright infringement. False arrest, wrongful eviction, and malicious prosecution also fall into this category of CGL insurance. It’s important to remember that CGL covers personal and advertising injury claims only if the offenses were committed unknowingly. For example, if your business published false statements while aware that they were false, you would not be covered by CGL.


Legal Defense

If a claimant sues your company for a reason covered by your CGL insurance policy, the insurer will pay for your attorney fees, court costs, expert witness fees, and other expenses for defending the case. They will defend your case up the limits of your insurance policy. Legal fees typically do not count against the limits of insurance.


Medical Payments

If an accident causing bodily injury happens on or adjacent to your property or is caused by your operations, your CGL insurance will pay medical expenses up to the insurance policy’s medical expenses limit, regardless of fault. This part of CGL coverage differs from bodily injury coverage, which pays if your company is found to be at fault. Medical payments can help avoid lawsuits by paying for first aid, ambulance service, and other medical or dental services that may be required if someone is injured on your property, even if your business is not at fault.

What are the exclusions to General Liability Insurance?

Commercial General Liability Insurance has a number of common exclusions. They include:

What are the limits of General Liability Insurance?

The limits of liability are the maximum amount the insurance company will pay for losses during a policy year. You can choose the limits of your policy with your insurance company; higher limits will require higher premiums.

CGL insurance policies typically have a per occurrence limit as well as a per year maximum. The per occurrence limit is the maximum the insurer will pay for a single incident, while the per year maximum is the amount the insurer will pay for all incidents over a single year.


Pricing and Quotes

AdvisorSmith found the average cost of General Liability Insurance for IT businesses was $418 per year. This average cost was based on IT businesses with up to $500K in revenue for coverage of $1 million per occurrence and $2 million in aggregate.

Pricing for General Liability Insurance is based upon the unique risks your business faces. Insurers consider factors such as:

Businesses with higher risks will have higher premiums than those deemed lower risk. For example, a computer repair business with a history of multiple claims will probably have higher liability premiums than one with relatively few past claims. Premiums also rise as you increase the limits of insurance. Different insurance companies have different models for rating risks, so it is worth comparing pricing across different insurers.

In order to get an accurate estimate on pricing, it’s best to get a quote from a reputable insurance company. Below we’ve highlighted a few of our trusted partners who offer General Liability Insurance:

ProviderGeneral LiabilityBusiness Owner's PolicyProduct Liability

Final Word

Although CGL is not legally required, most companies carry some level of risk for the incidents it covers. No matter how careful you are, accidents can occur and cause bodily injury or property damage, leading to costly lawsuits, damages, and settlements. If you want to protect your company from potential financial losses relating to these common risks, Commercial General Liability Insurance is helpful. Whether your company meets with clients and works at customers’ offices regularly or just has occasional visitors, CGL insurance can give you and your clients confidence that your business will be able to handle unforeseen circumstances.

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