Is Public Liability the Same as General Liability?

Understanding different types of liability coverage is important for managing business risk. Businesses interact with customers, vendors, and the public, creating various exposure points. Adequate insurance protects against financial burdens from accidents or injuries involving third parties. This article clarifies common business insurance terms and how different policies address liability risks.

What General Liability Insurance Covers

General liability insurance protects businesses against claims of bodily injury, property damage, and personal and advertising injury to third parties. This foundational coverage in the United States addresses incidents on business premises, at a client’s location, or from business operations. For example, if a customer slips on a wet floor and is injured, general liability insurance can cover medical expenses and legal costs.

It also covers property damage, such as an employee accidentally damaging a client’s furniture. Beyond physical harm, it includes protection against personal injury claims like libel, slander, or reputational harm. Advertising injury, such as copyright infringement, is also covered. While not federally mandated, general liability insurance is widely adopted in the U.S. due to the broad risks it mitigates.

What Public Liability Insurance Covers

Public liability insurance covers claims for bodily injury or property damage suffered by members of the public due to a business’s operations or products. This includes customers, visitors, or passersby. It is commonly used outside the United States, in countries like the United Kingdom, Australia, Canada, and New Zealand. For example, if a delivery person trips over equipment outside a business and is injured, public liability insurance could cover medical expenses and legal fees.

It also covers damage to neighboring property, such as an explosion at a construction site damaging an adjacent building. Incidents where a product sold by a business causes injury or damage to a third party are also covered. The core focus remains on protecting the business from third-party claims arising from its activities.

Understanding Terminology Differences

While “public liability” and “general liability” are often used interchangeably, their distinction is geographical. In the United States, “general liability insurance” is the overarching term, encompassing what other countries call “public liability.” U.S. insurers have transitioned to more comprehensive “general liability” coverage. This means a U.S. general liability policy typically includes public liability protections, plus additional coverages like personal and advertising injury.

For example, a U.S. general liability policy covers a customer slipping and falling on business premises, a scenario public liability insurance addresses elsewhere. “Public liability” is often a component within a broader general liability policy in the U.S., or simply a different name for the same core coverage depending on the country. Therefore, U.S. businesses should seek general liability insurance for comprehensive third-party protection. Review policy documents carefully to ensure all risks are addressed.