Business Lines · General Liability
General liability insurance in Texas: what it covers, and what it leaves to other policies.
It's the policy every contract and landlord asks for first. It's also narrower than most owners assume.
The short version
General liability (GL) pays when someone outside your business says you injured them or damaged their property — a customer who falls in your store, a client's building damaged by your work, a product that hurts someone. It also covers personal and advertising injury such as libel or slander, and it pays for your legal defense. The limits most Texas contracts and leases ask for are $1M per occurrence and $2M aggregate.
It does not cover your vehicles, injuries to your own employees, professional mistakes that cause only financial loss, or your own property. Each of those is a separate policy. Texas has no general law requiring a business to carry GL — the requirement almost always comes from a contract, a lease, or a lender.
What It Covers
Three coverages on one form.
The standard commercial general liability policy is built in three parts. All three respond to claims from third parties — people who are not you and not your employees.
Bodily injury and property damage
The core of the policy. Injuries at your premises, damage caused by your operations, and claims from your products or finished work — the last two are called products and completed operations.
Personal and advertising injury
Libel, slander, false arrest, wrongful eviction, and certain advertising offenses such as using someone else's advertising idea. No one has to be physically hurt for this part to apply.
Medical payments
A small limit that pays a visitor's medical bills after an accident at your premises, regardless of fault. It exists to settle minor injuries before they become lawsuits.
Legal defense
The carrier hires and pays the lawyer, even when the suit is groundless. On the standard form defense costs are paid in addition to the limit. Some surplus lines policies put defense inside the limit, which is worth checking before you buy.
Coverage Gaps
What general liability does not cover.
Most “I thought I was covered” conversations start with one of these four.
Vehicles
Accidents involving autos you own or operate are excluded. That's commercial auto. If employees run errands in their own cars or you rent vehicles, ask about hired and non-owned auto coverage.
Injuries to your own employees
GL excludes them. That is what workers' compensation is for. Texas lets private employers go without comp, but opting out does not move employee injuries onto the GL policy — a non-subscriber is simply uninsured for them unless it buys separate coverage. Our workers' comp page explains the trade-off.
Professional errors
GL responds to bodily injury and property damage. If your advice, design, or service costs a client money without injuring anyone or damaging anything, that's professional liability, also called errors and omissions.
Your own property
Your building, equipment, inventory, and tools belong on a property policy. Property of others in your care, custody, or control is generally excluded too. The cost of redoing your own faulty work is not covered either.
Limits and Triggers
How the limits actually work.
“$1M/$2M” is two different numbers doing two different jobs.
Per occurrence
The most the policy pays for any one event, no matter how many people are hurt or how many claims come out of it. In a $1M/$2M policy this is the $1M.
General aggregate
The most the policy pays for all claims in the policy period — the $2M. Products and completed operations claims have their own separate aggregate. Once an aggregate is used up, the policy stops paying until renewal.
Per project or per location
By default one aggregate is shared across everything you do. An endorsement can give each job or each location its own. Construction contracts often require the per-project version.
Occurrence vs. claims-made
An occurrence policy covers injury or damage that happens during the policy period, even if the claim arrives years later. A claims-made policy covers claims first made while it is in force, for incidents after its retroactive date. Leave a claims-made policy without buying an extended reporting period, or tail, and later claims have nowhere to go.
Most general liability is written on an occurrence form, and it is the easier one to live with. Claims-made GL shows up mainly in harder-to-place classes. If a quote is much cheaper than the others, check which form it is before comparing prices. When a contract asks for limits above what the GL policy provides, the usual answer is a commercial umbrella or excess policy on top rather than a bigger GL policy.
Contracts and Certificates
The three phrases every contract asks for.
Landlords, general contractors, and larger customers want your policy to protect them from claims caused by your work or your presence. A certificate of insurance shows them the policy exists. It changes nothing on the policy. These three items do, and each has to be endorsed.
- Additional insured — extends your policy to the other party for claims arising from your work or premises
- CG 20 10 and CG 20 37 — the usual construction pair: ongoing and completed operations
- CG 20 11 — the usual form for a landlord or property manager
- Waiver of subrogation — your carrier gives up its right to recover from them after paying a claim
- Primary and non-contributory — your policy pays first and does not ask theirs to share
- Certificate holder — means only that they received a copy
Send us the insurance requirements page of the contract or lease before you sign it. Some policies include these terms automatically whenever a written contract requires them, and some charge for each one. If you work construction jobs, the contractors insurance page covers the endorsement problem in more detail. Existing clients can request certificates through the service center.
Pricing
What actually decides your premium.
GL is priced as a rate multiplied by a measure of how much business you do. Two things set it: your classification and your rating basis.
Classification
Every business is assigned a class code describing what it does, and each class carries its own rate. An office and a roofer of the same size pay very different premiums. The description has to match your real operations — a wrong class means either overpaying or a problem at claim time.
Payroll
The usual basis for contractors and service businesses. Money paid to subcontractors is rated too: at a lower rate when they carry their own insurance, and as if it were your own payroll when they don't.
Gross sales
The usual basis for retailers, restaurants, manufacturers, and distributors.
Square footage
The usual basis for offices and for building owners who lease space to tenants.
The premium you pay at the start is based on an estimate. After the policy period ends the carrier audits the real payroll or sales and bills or refunds the difference. Estimating low to get a cheaper quote only moves the bill to the audit. Claims history, years in business, and the limits and deductible you choose move the price as well.
Straight Talk
Who needs it, and who can buy less.
Anyone with a lease or a contract
Commercial landlords, general contractors, property managers, and larger customers ask for a GL certificate before you move in or start work. For most Texas businesses this is the practical reason the policy exists.
Anyone the public can reach
If customers visit your premises, you work at other people's property, or you make or sell a product, you have the exposure GL is written for, whether or not anyone has asked for proof.
A BOP may do the job for less
A small, lower-hazard business that also has property to insure can often buy a Business Owners Policy, which packages GL and property together. Eligibility depends on the type of business, not only its size.
GL may be the wrong first policy
A consultant, designer, or advisor whose real risk is a client losing money needs professional liability more than GL. Some state-issued licenses and permits carry their own insurance rules, so check with your licensing agency as well.
GL is one line of several. The business insurance page shows how it fits with property, auto, workers' comp, and umbrella coverage.
Before You Ask
What to send for a quote.
The more of this we have up front, the fewer questions come back from underwriting.
- What you do — in plain words, including the work you turn down
- Payroll and sales — estimated for the next twelve months
- Subcontractors — what you pay them and whether you collect certificates
- Locations — addresses, square footage, owned or leased
- Years in business — and your experience in the trade if the company is new
- Current policy — the declarations page, if you have one
- Loss runs — claims history reports from your current and prior carriers
- Contract or lease requirements — the insurance section, word for word
Get Started
Request a general liability quote.
Tell us what your business does and what your contract or lease requires. Attach the requirements if you have them.
Reach us directly
You'll hear back from a real person on our team, not a call center.
Plano, TX 75074
General Liability FAQ
Questions we hear often.
Is general liability insurance required in Texas?
Texas has no general law requiring a business to carry it. The requirement almost always comes from somewhere else: a commercial lease, a customer or general contractor's contract, a lender, or the rules attached to a particular license or permit.
What does general liability insurance cover?
Claims from people outside your business for bodily injury or property damage caused by your premises, operations, products, or completed work. It also covers personal and advertising injury such as libel and slander, a small amount of medical payments for visitors, and the cost of defending you.
What does $1M/$2M mean on a general liability policy?
$1M is the per-occurrence limit, the most the policy pays for any one event. $2M is the general aggregate, the most it pays for all claims during the policy period. Products and completed operations claims have a separate aggregate of their own.
Does general liability cover my employees if they get hurt?
No. Employee injuries are excluded and belong on a workers' compensation policy. Texas lets private employers opt out of workers' comp, but opting out does not shift those injuries onto the general liability policy.
What is the difference between occurrence and claims-made coverage?
An occurrence policy covers injury or damage that happens during the policy period, whenever the claim is made. A claims-made policy covers claims first made while the policy is in force, for incidents after its retroactive date. Leaving a claims-made policy without an extended reporting period can leave later claims uncovered.
What is the difference between a certificate holder and an additional insured?
A certificate holder has received a copy of your certificate of insurance and nothing more. An additional insured has been added to your policy by endorsement and is covered by it for claims arising from your work or premises.
How is general liability insurance priced?
A rate for your business classification is multiplied by a rating basis: usually payroll for contractors and service businesses, gross sales for retailers, restaurants and manufacturers, and square footage for offices and landlords. The carrier audits the real figures after the policy period and adjusts the premium.
Do I need general liability if I already have a Business Owners Policy?
No. A Business Owners Policy already includes general liability along with property coverage. Check that its limits and endorsements meet what your contract or lease requires.