General liability insurance

Definition

The policy covering claims the business injured someone or their property.

Why It Matters

This is the cover a lender and a landlord both name, and the one a commercial customer asks to see before signing. It has to be bound in the buying entity by the closing date, which means starting the application weeks earlier: an insurer underwrites the new owner, not the old policy. Buying the business does not carry the seller's policy across, and a gap of even a day is a day of trading uninsured.

In numbers: A $1M per occurrence and $2M aggregate policy is the common requirement, and on a trades business at this site's deal floor it runs roughly $1,500 to $4,000 a year depending on payroll and claims history.