General Liability Insurance

The standard form has three insuring agreements:

• Coverage A, bodily injury and property damage. Injury to people and damage to their property caused by an occurrence during the policy period, for which you are legally liable. This is where slip and fall, falling objects, pool and playground injuries and fire spreading to a neighbor's building are paid.
• Coverage B, personal and advertising injury. A defined list of offenses, several of which matter to landlords: wrongful eviction, wrongful entry into a room or dwelling a person occupies, invasion of the right of private occupancy, false arrest, malicious prosecution, and libel or slander.
• Coverage C, medical payments. Small medical bills for people hurt on the premises, paid without anyone proving fault. It is a claim prevention tool as much as a coverage: paying an emergency room bill quickly often ends a claim before a lawyer is involved. It does not pay tenants hurt in the part of the premises they normally occupy.

On top of the limits, the standard form pays defense costs as supplementary payments, which means the cost of defending a suit does not reduce the amount available to settle it. That is one of the most valuable features of the form and one of the first things a restrictive policy removes. Some surplus lines forms pay defense within the limit, so every dollar spent on lawyers is a dollar less for a settlement or verdict. A defense within limits form is not wrong for every account, but the buyer should know which one they have.

The form also covers liability you take on by contract in an insured contract, such as a lease or an easement, and it extends insured status to employees, property managers acting as your real estate manager, and others named by endorsement.

The standard exclusions remove exposures that belong on other policies:

• Injury to your own employees. Excluded, and handled by workers comp and employers liability for your own staff.
• Autos. Vehicles you own, hire or borrow belong on the auto policy; hired and non-owned auto is a separate coverage.
• Your own property. Damage to property you own, rent or occupy, and to property in your care, custody or control, such as a customer's car at a wash, which garagekeepers insurance for customer vehicles covers.
• Pollution. Most pollution is excluded, with narrow exceptions for smoke from a hostile fire and heating equipment fumes inside a building.
• Liquor. Liability for serving or selling alcohol is excluded for businesses in that trade, and needs its own liquor liability policy.
• Expected or intended injury, professional services and employment practices. Each belongs on a different policy: professional liability for care and management errors and employment practices liability insurance for staff claims.
• Data and privacy. Current ISO forms exclude injury arising from the access to or disclosure of personal or confidential information, which is why cyber liability written as a separate policy is the policy that answers a data breach.

Endorsements added by the carrier often matter more than the standard exclusions. Habitational and hospitality policies commonly carry some of the following: an assault and battery exclusion or a low sublimit, an abuse and molestation exclusion, a firearms exclusion, an animal or dog liability exclusion, a habitability exclusion, a designated premises limitation that restricts coverage to listed locations, and contractor conditions that void coverage for injuries to a contractor's workers unless certificates and hold harmless agreements are on file. An assault and battery exclusion on an apartment or hotel policy removes much of the negligent security exposure, which is often the largest one the property carries.

General liability is rated on an exposure base that fits the class: the number of units for apartments, gross sales for hotels, car washes and dealerships, and square footage or rental income for buildings leased to others. The carrier applies a rate by class and territory, then adjusts it for loss history, security and amenities. At the end of the policy term the carrier may audit the exposure and adjust the premium if units or sales differed from the estimate.

The declarations page shows six limits, and each does a different job:

• Each occurrence. The most paid for one accident, commonly one million dollars.
• General aggregate. The most paid for all claims in the policy year, other than products and completed operations. A per location aggregate endorsement gives each property its own aggregate, which matters for an owner with several sites.
• Products and completed operations aggregate. Claims from goods you sold or work you finished, relevant for dealers and anyone who repairs equipment.
• Personal and advertising injury, damage to premises rented to you, and medical expense. Smaller limits for the narrower coverages.

Limits are usually set by what leases, loan documents and management agreements require, then raised through an umbrella. The deductible or self insured retention matters as well: many habitational accounts now carry a per claim retention that the owner pays before the carrier, and a retention that includes defense costs is a larger commitment than it looks.

State law and venue move the price too. Maryland's pure contributory negligence rule bars recovery by a plaintiff even slightly at fault, which holds claim values down. Ohio's cap on non economic damages (Ohio Revised Code section 2315.18) limits the tail carriers price for. Georgia's 2025 tort reform package tightened the standard for holding an owner liable for third party criminal acts on the premises.

Liability underwriters read the premises the way a plaintiff's lawyer would after an injury. Expect questions on:

• Security: lighting in parking areas and walkways, cameras, access control, security patrols and the crime score for the address.
• Amenities: pools and their fencing, gates and lifeguard or signage arrangements, playgrounds, fitness rooms, dog parks and anything with water or height.
• Maintenance: written inspection and repair logs, snow and ice removal procedures, and who is responsible for them.
• Contractors: whether every contractor provides a certificate, names you as additional insured and signs a hold harmless agreement before starting work.
• Tenants: whether commercial tenants carry their own liability and name you as additional insured, and what the lease says about indemnity.
• Claims: five years of loss runs with detail on open claims, reserves and any assault, security or pool claims.

Underwriters treat the contractor file as a proxy for how the property is run. An owner who collects certificates, checks the additional insured wording and keeps the file current is transferring risk to the contractor's carrier, and the underwriter prices the difference. In New York, where Labor Law sections 240 and 241 apply, owners carry near absolute liability for gravity related injuries to workers, many carriers exclude those claims, and the contractor's insurance becomes the owner's main protection.

A liability claim usually starts with an incident report, a letter from a lawyer or a lawsuit. The policy requires notice as soon as practicable, and suit papers must go to the carrier immediately, because the deadline to answer a lawsuit is short and a missed deadline can produce a default judgment. The carrier investigates, decides whether the claim falls within the policy, and appoints defense counsel.

If there is doubt about coverage, the carrier may defend under a reservation of rights, which means it pays for the defense while keeping the right to deny payment of a judgment later. A reservation of rights letter deserves careful reading, and in some states it entitles the insured to independent counsel. Where a contractor or tenant should carry the claim, the claim should be tendered to their carrier under the additional insured endorsement, and that tender is only as good as the certificate and endorsement collected before the work started.

Settlement is the carrier's decision within the limit, and most policies give the carrier the right to settle without the insured's consent. A claim that threatens to exceed the limit puts the carrier on notice to settle within it where it reasonably can, and the umbrella carrier should be told early. Owners help their own case by preserving evidence: video, maintenance logs, incident reports and photographs taken on the day. Surveillance video overwritten before anyone saved it is a common and expensive loss.

Every property owner carries this line, and the exposure varies more by class than any other.

For apartment owners facing negligent security and slip claims, the main questions are assault and battery terms, pool and playground controls, and whether the policy covers every building on the schedule. Hotel owners with guests, pools and bars on site add liquor liability, guest property and the security questions that come with public access. Associations responsible for common areas and amenities carry the exposure for walkways, pools and clubhouses that the board controls, separate from the liability each unit owner carries inside their unit.

Management firms acting for owners are covered on the owner's policy as real estate manager for the managed property, but need their own policy for the firm's operations. Dealers who sell and repair machines carry products and completed operations exposure that most property owners never see, because a machine they sold or serviced can injure someone years later.

Alcohol changes the exposure and the market. In South Carolina, where liquor liability requirements and joint and several rules drove up costs (South Carolina Code section 61-2-145 on liquor liability insurance), coverage for businesses serving alcohol became expensive and at times unobtainable.

• An assault and battery exclusion nobody noticed. Common on habitational and hotel policies, and it removes the claim a property with security problems is most likely to face.
• A designated premises limitation. A newly acquired building, or a vacant lot, is not covered until it is added.
• Contractor conditions not met. Coverage for a contractor's injured worker depends on certificates and agreements that were never collected.
• Defense inside the limit. A one million dollar limit that is really one million dollars less legal fees.
• No umbrella, or one that does not follow. A large verdict above the primary limit, or an excess layer with exclusions the primary does not have.