General liability insurance is the foundation of almost every business insurance policy. It covers the big, obvious stuff: someone slips and falls at your business, your employee damages a client’s property, a competitor claims your ad infringed on their trademark. For those situations, general liability has your back.
But here’s what doesn’t get talked about enough: general liability has significant gaps. And if you assume it covers everything, you could be blindsided when a real claim comes in.
What General Liability Does Cover (Quick Recap)
- Bodily injury to a third party (customer, vendor, visitor)
- Property damage your business causes to someone else’s property
- Advertising injury (copyright infringement, libel, slander in your marketing)
- Legal defense costs and settlements for covered claims
What General Liability Does NOT Cover
1. Your Own Property
If your building, equipment, or inventory is damaged — by fire, storm, theft, or vandalism — general liability won’t pay a dime. That’s what commercial property insurance is for.
2. Your Employees’ Injuries
If one of your workers gets hurt on the job, general liability doesn’t cover it. Workers’ compensation is what handles medical bills and lost wages for employee injuries.
3. Professional Mistakes
If you give bad advice, make an error in your work, or fail to deliver a service as promised — and a client loses money because of it — general liability won’t cover that claim. You need professional liability (also called Errors & Omissions) insurance for that.
4. Your Business Vehicles
Using a truck or van for your business? General liability doesn’t cover accidents involving your vehicles. You need commercial auto insurance for that, and Texas law requires it for business-owned vehicles.
5. Cyberattacks and Data Breaches
If a hacker gets into your systems and steals customer data, general liability won’t cover the notification costs, legal fees, or regulatory fines. Cyber liability insurance is a separate policy — and for small businesses that store any customer information, it’s increasingly essential.
6. Floods and Windstorms (in Texas)
This one is critical for Houston-area business owners. Standard commercial property and general liability policies typically exclude flood damage. In a flood-prone market like ours, that’s a massive gap. Separate flood coverage through the National Flood Insurance Program (NFIP) and windstorm coverage through TWIA (for coastal properties) may be needed.
7. Intentional Acts
If you or an employee intentionally causes harm, general liability won’t cover it. Insurance covers accidents — not deliberate actions.
8. Contractual Liability (in many cases)
General liability may not cover liability you assumed under a contract unless it falls under what’s called ‘incidental contracts.’ If you’ve signed agreements with broad indemnification clauses, your coverage may have limits there.
So What’s the Fix?
The right coverage strategy layers multiple policies to close these gaps:
- BOP (Business Owner’s Policy): bundles general liability + commercial property at a discount
- Workers’ Compensation: covers employee injuries
- Professional Liability / E&O: covers mistakes in your professional services
- Commercial Auto: covers business vehicles
- Cyber Liability: covers data breaches and cyberattacks
- Flood / Windstorm: especially critical for Houston and Gulf Coast businesses
The goal isn’t to have the cheapest policy. The goal is to have no surprises when something goes wrong.
An independent agent can review your specific business and make sure you’re not carrying gaps you don’t know about. That’s exactly what we do at Worthen Insurance Group.
Worthen Insurance Group has served Texas business owners for over 20 years. We will walk you through your real risk exposure, show you coverage options that fit your budget, and make sure you understand exactly what you’re buying. We help protect Texas businesses from financial ruin – that’s our goal.