What Is General Liability Insurance?
General liability insurance protects a business against claims of bodily injury, property damage, or personal injury caused by its operations, products, or employees. It's distinct from auto insurance, covering risks tied to running a business rather than driving a vehicle.
What It Covers
- Bodily Injury: Costs if someone is injured on your business property or due to your operations.
- Property Damage: Damage your business causes to someone else's property.
- Personal and Advertising Injury: Claims like libel, slander, or copyright infringement in advertising.
- Legal Defense Costs: Attorney fees and court costs even if a claim is ultimately dismissed.
Who Needs It in Texas
Texas doesn't legally require general liability insurance for most businesses, but many landlords, clients, and contracts require proof of coverage before doing business. It's considered a baseline protection for nearly any business with a physical location, employees, or client interactions.
What It Doesn't Cover
- Employee injuries (covered by workers' compensation instead).
- Professional errors or negligence in services rendered (covered by professional liability).
- Damage to your own business property or equipment (covered by commercial property insurance).
Choosing the Right Coverage Amount
Coverage limits should reflect your business's actual risk exposure, foot traffic, physical location, industry, and contract requirements all factor in. Many small businesses start with $1 million per occurrence as a baseline, then adjust based on client or landlord requirements.
