Key takeaways
- General liability covers third-party claims, someone outside your business alleging bodily injury, property damage, or advertising injury.
- It is the coverage clients, landlords, and vendors most often require proof of before they'll work with you.
- It does not cover your own property, your employees' injuries, professional mistakes, or cyber, those need separate policies.
- For most Texas small businesses it's the first policy to put in place, and it's usually inexpensive relative to what it protects.
General liability is the policy most people picture when they think ‘business insurance,’ and also the one most misunderstood. It’s foundational, it’s usually required, and it’s often the first coverage a business buys, but what it does and doesn’t do surprises a lot of owners. Here’s the plain-language version.
What general liability covers
General liability responds to third-party claims, meaning someone outside your business, a customer, a client, a passerby, alleges your operations caused them harm. It covers three broad categories: bodily injury, property damage, and personal or advertising injury. When a claim lands, the policy pays for your legal defense as well as any settlement or judgment, up to your limits.
| Category | A real-world example | What the policy pays |
|---|---|---|
| Bodily injury | A customer slips on a wet floor in your shop | Medical costs, legal defense, settlement |
| Property damage | Your crew damages a client’s flooring on a job | Repair or replacement, defense, judgment |
| Personal & advertising injury | A competitor claims your ad was defamatory | Defense and damages up to your limit |
The three things general liability responds to
Who actually needs it
Almost every Texas business, and most DFW landlords, clients, and vendors will require proof of it before they’ll sign. If customers visit your premises, you work on other people’s property, or you market a product or service, general liability is the baseline. It’s also usually inexpensive relative to the exposure it covers, which is why it’s the first policy most owners put in place.
Property coverage protects your stuff. General liability protects you when someone else is harmed, and those are two very different bills.
What it does not cover
This is where owners get caught out. General liability doesn’t touch your own property, your employees’ injuries, your professional advice, employment disputes, cyber events, or vehicles used for work. Each of those is a separate coverage. A common and costly assumption is that a general liability policy or a BOP automatically handles all of it, it doesn’t.
- Your building, inventory, and equipment, that's commercial property.
- An employee hurt on the job, that's workers' compensation.
- A claim that your advice or work cost a client money, that's E&O.
- A data breach or ransomware event, that's cyber.
General liability is the foundation, not the whole house. It belongs in nearly every program, but on its own it leaves real gaps. The right move is to start here, then build deliberately around the specific way your business creates risk.
Frequently asked questions
Third-party claims of bodily injury, property damage, and personal or advertising injury, plus the legal defense, settlements, and judgments that come with them, up to your policy limits. Think a customer slipping on your premises, or your work damaging a client’s property.
The state doesn’t mandate it for most businesses, but it’s effectively required in practice, most commercial leases, client contracts, and vendor agreements demand proof of it before they’ll do business with you.
Your own property (needs commercial property), employee injuries (workers’ comp), professional mistakes or bad advice (E&O), employment claims (EPLI), cyber events (cyber), and vehicles used for work (commercial auto). GL is foundational, not comprehensive.
For most small businesses it’s one of the more affordable policies, priced on your industry, revenue, and risk profile. The cost is almost always small relative to a single liability claim, which is why it’s the first policy most owners put in place.
Want a second set of eyes on your coverage?
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Written by Kristi Howton
Founder, Infinity Group Insurance