Does General Liability Insurance Cover Theft?

No. General liability insurance does not cover theft of your own property. GL covers third-party claims: bodily injury and property damage to customers, visitors, and other third parties. When someone steals your equipment, tools, or inventory, that is a first-party loss, and it falls under commercial property insurance or inland marine, not GL.

What GL Does Cover Related to Theft

GL does cover one theft-related scenario: if you or your employees are accused of stealing from a client or third party. A client claims your contractor employee stole from their home. The claim against your business for that alleged third-party loss may fall under GL.

But this coverage only applies to the third-party claim against you. It does not pay for what was allegedly taken, and it does not cover the investigation, restitution, or the cost of replacing the client's property. It covers your defense costs if you are sued over the alleged theft.

What Actually Covers Theft of Your Own Property

Commercial property insurance: covers theft of physical assets at your business location. If someone breaks into your office and steals computers, or into your shop and steals tools stored there, commercial property covers the loss. Commercial property is typically included in a Business Owner Policy (BOP).

Inland marine (tools and equipment floater): covers theft of property off your premises, including equipment on job sites, tools in your vehicle, and gear being transported. Standard commercial property policies cover assets at your fixed business location. Inland marine extends that coverage to movable property.

Commercial auto (comprehensive coverage): covers theft of the vehicle itself and, in some cases, items permanently affixed to the vehicle. For tools and equipment inside the vehicle, inland marine is the relevant coverage.

Employee Theft: A Separate Coverage Category

If your own employee steals from you or from a client, that is not covered by GL or standard commercial property. Employee theft requires a crime policy or fidelity bond.

Crime insurance or commercial crime coverage: pays if an employee steals money, securities, or property from your business.

Janitorial surety bond: a specific type of fidelity bond for service businesses (cleaning companies, care workers) that covers theft by employees from clients.

If you run a service business where employees regularly work in client homes or offices, a janitorial bond or employee dishonesty coverage is essential.

Common Coverage Gaps

Tools stolen from a job site: not covered by GL, not covered by standard commercial property (which only applies at your fixed business address). Inland marine covers this.

Equipment stolen from your truck: GL does not cover this. Commercial auto comprehensive may cover items affixed to the vehicle. Inland marine covers tools and equipment stored in the vehicle.

Inventory stolen from your shop: commercial property covers this if your policy includes stock and inventory at the listed business address.

Cash stolen from your register: commercial property typically excludes cash. A crime policy covers cash theft.

Frequently Asked Questions

Someone broke into my business and stole equipment. What covers that?

Commercial property insurance covers theft at your business location. If the equipment was at a job site or in your vehicle, inland marine covers it. Neither GL nor commercial auto (beyond comprehensive for the vehicle itself) covers theft from the premises.

My contractor's tools were stolen from a client's job site. What policy pays?

Inland marine or a tools and equipment floater. Standard commercial property covers equipment at your listed business address. Job site theft is an off-premises loss that inland marine covers.

A client says my employee stole from their home. Will GL defend me?

GL may cover the third-party claim against your business arising from the alleged theft, meaning it can pay for your legal defense. It does not cover what was allegedly stolen or any restitution. Employee dishonesty coverage (fidelity bond) covers losses your employee actually causes to clients.

What is the difference between a crime policy and a fidelity bond?

Both cover employee theft, but the terms are used differently by industry. Commercial crime coverage is the broader term for a business policy covering theft of money and property by employees. A fidelity bond is often used in service industries (cleaning, financial services) to provide client-facing coverage for employee dishonesty. Both are separate from GL and commercial property.

My business inventory was stolen. Does my BOP cover it?

A BOP bundles GL and commercial property. The commercial property component covers theft of inventory at your listed business address if inventory is included in your coverage. Review your policy to confirm that stock and inventory is a covered category and that your coverage limit reflects your current inventory value.

Disclaimer

This article is for informational purposes only and does not constitute insurance or legal advice. Coverage details and costs vary by carrier and individual circumstances. Consult a licensed insurance agent for guidance specific to your situation.

Sources

• Insurance Information Institute, Business Property Insurance
• Insurance Information Institute, Crime Insurance
• NAIC Small Business Insurance Overview