What is the purpose of general liability insurance?

General liability insurance primarily serves to protect a business from legal claims arising from bodily injury, property damage, and personal injuries that occur in the course of the business's operations. This type of insurance is designed to cover incidents that may result in lawsuits, such as accidents that happen on business property or due to the business's operations.

The focus of general liability insurance is on safeguarding the business from various risks that can result in financial loss due to legal claims. It typically covers physical injuries to third parties as well as damage to their property, ensuring that the business can manage potential legal expenses and settlements without incurring significant out-of-pocket costs.

While it can be easy to think of property coverage or potential misconduct in a business context, these areas are typically addressed by different types of insurance. Employee illness or injury, for instance, is more of a concern for workers' compensation insurance, while claims regarding directorial misconduct would fall under directors and officers (D&O) insurance. Hence, the correct choice accurately reflects the broad protective aims of general liability insurance in a business environment.