In this 10‑minute YouTube video, Hunter Nelson of Nelson Insurance Agency explains commercial general liability (GL) insurance for small‑to‑medium businesses. He begins by differentiating GL from auto, home, life, and health policies, then outlines what GL actually covers—business operations, bodily injury, property damage, medical payments, damage to rented premises, products/completed operations, and personal/advertising injury. He details common exclusions (auto, pollution, workers’ compensation, cyber, liquor, umbrella, etc.) and stresses that any other policy that already provides coverage will typically exclude that risk from GL. Nelson discusses the importance of accurate rating and class codes, warning against material misrepresentation and explaining how mis‑stated business activities can void a policy. He gives concrete examples for electricians, plumbers, contractors, and truckers, illustrating “your‑work” exclusions and premises‑rented limits. The video also covers cost considerations, noting that cheap online policies often have limited coverage while reputable carriers can offer better protection at comparable prices. He emphasizes the value of a knowledgeable insurance agent to interpret policy language and ensure proper coverage. The video concludes with a call to action: visit the agency’s website for quotes, like and subscribe, and contact the agency for further assistance.
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Hey guys, I am Hunter with Nelson Insurance Agency. I'm going to go over general liability insurance here today. Our agency is based out of Sioux Falls, South Dakota. Pretty much all we do is commercial insurance. Uh, we'll do the home and the auto, life and health, everything kind of packaged for the commercial clients. Commercial insurance is just business insurance, right? So I'm going to get into general liability, what that is. It's going to be a lot different than just your auto insurance. Auto insurance, a little bit more simple to understand. If you guys have commercial auto or personal auto insurance, if the driver and the vehicle on the policy is covered for X amount of dollars, and here's the liability limit on it. But general liability is a little bit different. So let's get into it. I'm gonna break that down here for y'all. All right, so general liability, there's rating factors and there's coverage factors into it, and they both can have some say in what actually gets covered into a, in, in a claim. Okay. General liability insurance, a lot of people just call it business insurance. I have commercial insurance, whatever the case is. It is basically the broadest and most restrictive policy out there at the same time. What it means is general liability is going to cover business operations, right? That's what it, that's what it just is. It's covering everything. It's not like auto where you get into an accident, it covers you on the road. It's obviously not going to cover your employee falling out of their chair and hurting their back because it's auto insurance, right? So what general liability does is your business operations are so broad, it's going to cover most things that the business does besides if it's excluded. And well, how do you know if it's excluded? For one, you guys should have a good insurance agent that's gonna be reading the policy for you and looking at those little, that little policy language that's going to exclude stuff. But also, if there's another policy that exists, 9 times outta 10, it's not gonna cover it on your general liability. So general liability is not gonna cover you driving to the bank or to a job site or to drop off a load because auto insurance exists. It's not gonna cover your tanker spilling diesel into the ground because pollution exists. It's not gonna cover your employee getting hurt because work comp exists. It's not gonna cover above the limits what's said in the policy because an umbrella exists. I can go on and on and on, but if other things exist, it's not going to cover it. So there's no cyber insurance, there's no employment practice liability insurance if you fire somebody, there's no liquor liability— there's no liquor insurance because liquor liability exists. General liability is going to cover your basic business operations besides of another policies there. Now if you guys go and get an insurance policy and rate yourself wrong Does that mean it only covers for what you're rated for? So for example, if I'm an insurance agency and I have general liability, and tomorrow I decide to start building decks or open up a trucking company, is that going to exclude it? Technically, the policy language is not going to probably have those operations excluded. It does. There's too many industries, too many different things to say. I'm going to exclude anything that's not insurance. But what it is going to do is it's going to say material misrepresentation or insurance fraud is excluded. It will void the policy like it never existed. You guys will not have coverage. So what, what is material misrepresentation? How does that kind of come about? You might not be purposely misrepresenting what's on your policy by telling your agent or getting insurance online. But if I say I am an electrician and I go do junk removal on the weekends, that's technically misrepresentation because electrician is pretty much going to have a lot less claims than a junk removal guy. It's weird, but that's the case. Another example is plumbing and you're doing roofing, right? So what do you do if you do multiple different things? Most insurance policies have what these are called class codes. A class code is a code, uh, given to an industry or a type of work. And so it's going to vary a little bit. It's not like there's one for electrician, but if you're an electrician that does outside work versus inside work, if you're going over 100 feet, stuff like that, there's different class codes. But you want to make sure you have multiple class codes in your policy if you're doing multiple different things. And really, just as a smart business owner, you shouldn't be doing too much I'm not going to open up a trucking company under the same S corp that I have my insurance agency in. I'm going to have different businesses for that. And so sometimes people call me and they're doing a million different things. It's almost impossible to get you insurance for that because really you should have multiple different businesses. Now, as a contractor, you're going to have a couple different things. You have a couple different services that might be semi-related. That's where you have multiple class codes or industries listed on your insurance. So as long as you are honest with the insurance company or the insurance agents, you are rated accurately. Now there's no misrepresentation. There's gonna be most likely coverage for it. And what do the little exclusions look like in the policy? Like I just gave an example for an electrician. Anything that might get too risky depending on your insurance, they're gonna exclude that stuff. So a lot of electrician policies for contractors, uh, or general liability policies for electricians. Uh, are going to exclude over a certain foot or certain amount of feet in the air. They are going to exclude certain things like general— like contractors typically have the your work exclusion. Insurance is not meant to be a maintenance policy. It's not meant to just cover stupid negligence. And so if you go into a house and you send your first day guy on the job there alone to rewire the whole house, like obviously this is a stupid example. But you do that, he does a horrible job and it needs to be replaced. Insurance isn't going to cover it because the your work exclusion excludes it because they don't want just blatant negligence. It should just be a backup. I'm going to cover it. I don't have to sweat it type of policy. What it's going to do though is, yeah, it's a big claim. I'm not going to cover your work. But if you go rewire a brand new house or you go wire a brand new house, Place burns down. It just got moved into whatever the case is. The forty thousand for electrical work will be excluded, but the other four hundred thousand for us the house will be covered most times in that scenario. So there's all sorts of little things in those policies. If you guys are a trucker, you know typically premises are going to be excluded because trucking general liability is so cheap. If you got a big shop with tons of dispatchers and tons of people in and out. It's not going to cover it for $250 a year as a rider on your personal, on your commercial auto policy. So you would probably get a standalone general liability policy in that scenario. Um, all sorts of different things, right? So what is general liability supposed to cover then? If there's all these things that are excluded and it's all this, and sometimes it is really cheap, what is it supposed to cover? Well, the better the insurance company you guys have, the more it's going to cover. You guys going online and buying insurance through Next, Hiscox, uh, you know, any of that type of stuff, you're gonna get what you pay for. When it's $50 a month for your business, it's probably not gonna be great coverage. Now, it doesn't mean expensive insurance is always better. You want to pay more because it's always better, right? My insurance was— I was paying $2,200 a year for just my general liability. My general liability is the cheapest policy my insurance agency Because what are people going to do? Slip and fall. And that's where I have my claims come from. So my E&O insurance, professional liability, is obviously way, way more expensive because I give advice for a living. My cyber is a lot more because I carry a lot of people's personal information in my systems. My auto insurance is more because I'm a younger guy and I drive a decent amount. So, but general liability is very cheap. And so I actually saved 60% of my general liability policy, kept almost all the same coverages, and it was way better. So it did work out really well, but it's through a very reputable insurance company. It's very picky on who they work with. And so I got into a good program, I got cheaper insurance. It was a great policy. So the, you get what you pay for doesn't always apply with insurance, but it is a good rule of thumb. You guys wanna have insurance agents gonna tell you this stuff, right? So general liability is typically 8 coverages built into it. Bodily injury and property damage. What that means is what it, what it sounds like. You injure somebody, you, you harm somebody with their per— like their body, it covers that, right? So slip and fall, somebody walks in insurance agency, slip and fall and breaks their arm, it's gonna cover that. Property damage, if I have a landscaping business, I chip a rock into a, into a window, it's $2,000, for example, to replace. It's going to cover that. That's bodily or that's property damage. It's going to cover medical payments. Medical payments, it's a liability policy most of the time for liability. Some, I should say some of the time, a lot of it gets drug into demands for money, lawyers coming in. And so medical payments is that, hey, don't sue me. Here's $5,000 to cover your health insurance deductible to fix the window, the simple quick payout. That's why it's $5,000 instead of $1 million because $1 million is typically lawsuit money. So it's Quick, don't sue me. Let's settle this thing before I get put out of business because you get a lawyer, right? You have damage to premises rented. Now I rent the space that I'm in, in this building. I have $100,000 in coverage. It does not provide $100,000 in coverage. I do not need $1 million in coverage if I burn this place down. It only covers it for venues 7 days or less. I'm renting somewhere out. It's not supposed to be a renter's policy. The landlord carries insurance on it. And it's not gonna do a whole lot more than that. It's very cheap, like dollars a year, and pretty useless coverage if you ask me. Products, completed operation. Products, what it sounds like, you go build a product, create a product, manufacture a product, you get sued from it. This comes in for manufacturers. Completed operations. I am a contractor. I go hang a chandelier. Chandelier falls on the homeowner. That's completed operation after I leave. That's where completed operation comes in. Personal injury and advertising injury come in there. Also another coverage for general liability, personal injury insurance. Now you have bodily injury, which is physically harming somebody. Personal injury is verbally harming somebody. It's slander, it's defamation. They sue you because I talked down on their business. These guys suck, don't use them, blah blah blah. Like I'm not saying Next Insurance and his cocks are bad. If you don't need a whole lot of coverage and price is your main concern, they're great. If you guys want a little more attention and don't want to go out of business because you don't know what's on your policy, I'd go get insurance agent. Advertising injury is going to be anything related to advertising. Now there's lots of exclusions on this stuff. If you guys go say, hey, call me. I guarantee you it'll be a dollar for my first job I do for you guys, for example. Uh, and it's not you— oh, I changed my mind, it's actually gonna be $1,000 to, you know, build this deck for you. Uh, you know, they might not cover that, probably not going to cover that, but it does relate to advertising. So hopefully it's not too long-winded, hopefully it's not too confusing. It's general liability. That's the world of insurance and lawyers for you. It's a legal contract that's 100 and some pages long, typically 150, maybe 100 pages. It's not easy stuff. So if you guys got questions on general liability, you guys would like a quote, anything on those lines, please go check out my website in the bio. Please shoot us a call. Again, we're Nelson Insurance Agency. We're licensed in 42 states. Happy to help. Please like, subscribe so I can keep making videos like this. I appreciate it.
