What does general liability insurance cover—and what requires separate coverage?

By Mark Melliand, owner, Melliand Insurance Agency · 13 years as an independent agent · Published October 27, 2026

Short answer: Commercial general liability (CGL) insurance is designed to respond to certain claims that your business caused bodily injury or property damage to others, or committed specified personal and advertising injury offenses. Many policies also include medical payments coverage. GL is liability insurance: it addresses claims by others, not damage to your own property. It doesn’t cover every accident, lawsuit or business mistake. What applies depends on the insuring agreement, who is an insured, definitions, exclusions, endorsements, limits, any deductible or retention, and the policy’s conditions.

The Texas Department of Insurance describes CGL as protecting business owners “against claims of liability for bodily injury, property damage, and personal and advertising injury” (TDI). This guide explains what that means in practice, using an illustrative standard form. To prepare for a quote, see our general liability quote guide. To compare standalone GL with a business owner’s policy, see our BOP vs. GL guide.

The main parts of a general liability policy

The illustrative standard form reviewed (ISO Commercial General Liability Coverage Form CG 00 01 04 13) has three main coverages:

• Coverage A: bodily injury and property damage liability. Pays damages the insured becomes legally obligated to pay because of covered bodily injury or property damage caused by an “occurrence,” subject to the form’s conditions. The insurer also has the right and duty to defend covered suits, as the form describes.
• Coverage B: personal and advertising injury liability. Covers specified offenses only (see below), not every reputational, advertising or intellectual-property dispute.
• Coverage C: medical payments, where included. Pays certain medical expenses for bodily injury caused by an accident on premises you own or rent, on adjoining ways, or because of your operations, “regardless of fault,” subject to its conditions and exclusions.

Liability coverage is different from insurance on your own building, equipment or inventory. That’s commercial property coverage; see our commercial property coverage guide.

Coverage details to understand

• Premises and operations. TDI describes coverage for injury or damage “that occurs on your premises or as a result of your business operations.”
• Products-completed operations. Covers certain injury or damage away from your premises arising from your products or completed work, subject to its own aggregate limit in the illustrative form. Our product liability guide explains this in detail.
• Personal and advertising injury, as specified offenses. In the illustrative form, these are: false arrest, detention or imprisonment; malicious prosecution; wrongful eviction or entry, or invasion of the right of private occupancy, by or on behalf of the owner, landlord or lessor; publication of material that slanders or libels a person or organization or disparages their goods, products or services; publication of material that violates a person’s right of privacy; use of another’s advertising idea in your “advertisement”; and infringing another’s copyright, trade dress or slogan in your “advertisement.” Coverage B has its own exclusions, including knowing violations, material first published before the policy period, certain breach-of-contract claims, and infringement of copyright, patent, trademark or trade secret, with exceptions for certain advertising-related offenses.
• Medical payments. In the illustrative form, expenses must be incurred and reported within one year of the accident, and the injured person must submit to examination by physicians the insurer chooses if asked. Exclusions include injury to any insured (with an exception for volunteer workers), a person hired to work for or on behalf of an insured, a person injured on a part of premises they normally occupy, injuries covered by workers’ compensation and similar laws, and injury during certain athletic activities. Other forms or endorsements may change or remove this coverage.
• Defense and supplementary payments. In the illustrative form, certain supplementary payments “will not reduce the limits of insurance.” The insurer’s right and duty to defend end when the applicable limit has been used up in the payment of judgments or settlements under Coverages A or B, or medical expenses under Coverage C. Other forms and endorsements may handle defense differently, so check your policy.
• Limits. The illustrative form includes an each-occurrence limit; a general aggregate (for medical payments, Coverage A damages other than products-completed operations, and Coverage B damages); a separate products-completed operations aggregate; a personal and advertising injury limit; a medical expense limit; and a damage-to-premises-rented-to-you limit. Check every limit on your declarations.
• Damage to premises rented to you. In the illustrative form, certain property-damage exclusions don’t apply to damage, other than fire, to premises rented to you for seven or fewer consecutive days, and fire damage to premises rented to you or temporarily occupied with the owner’s permission has its own limited coverage. This is a limited liability coverage, not property insurance on a leased space, and it doesn’t settle what your lease requires. See our commercial lease guide.
• Occurrence vs. claims-made. The illustrative form is an occurrence form. In it, Coverage A generally requires bodily injury or property damage that occurs during the policy period, while Coverage B requires a covered offense committed during the policy period, each subject to its conditions and exclusions. TDI notes that both occurrence and claims-made CGL policies exist. Don’t assume every GL policy uses the same trigger. Our claims-made guide explains claims-made terms.

Exposures that may need separate coverage or review

Not every exposure below is excluded in every policy. The examples come from the illustrative form, which includes exceptions, and endorsements can change coverage.

Exposure	Why GL may not be enough	Coverage or wording to review
Your own property	GL is liability coverage; the illustrative form excludes damage to property you own, rent or occupy, with limited exceptions for premises rented to you	Commercial property or BOP property coverage
Employee injuries	The illustrative form excludes workers’ compensation obligations and bodily injury to your employees arising out of employment, with an exception for liability assumed in an “insured contract”	Workers’ compensation and employer’s liability
Employment-practices allegations	Claims such as discrimination, harassment or wrongful termination aren’t what GL is designed for	Employment practices liability (EPLI)
Professional services	Claims arising from professional services require review of both GL and applicable professional liability coverage, including professional-services exclusions. Allegations may involve financial loss, bodily injury or property damage, depending on the profession and forms.	Professional liability (E&O) and any professional-services exclusions
Auto-related liability	The illustrative form excludes injury or damage arising from owned, operated, rented or loaned autos, aircraft and watercraft, with specified exceptions	Commercial auto, including hired and non-owned auto where needed
Cyber and privacy incidents	The illustrative form excludes damages from loss of, or inability to access, electronic data (with an exception for bodily injury). Coverage B’s privacy offense is limited to publication of material that violates privacy. Endorsements may change how data-related claims are treated	Cyber insurance
Pollution	The illustrative form has a broad pollution exclusion with specified exceptions	Pollution or environmental coverage, and any endorsements. See our guide to what pollution liability insurance covers.
Liquor-related liability	The illustrative form’s liquor exclusion applies only if you’re in the business of manufacturing, distributing, selling, serving or furnishing alcoholic beverages	Liquor liability, where your operations call for it
Defective work, your own product and impaired property	The illustrative form excludes damage to your product, damage to your own completed work (with an exception for work performed on your behalf by a subcontractor) and certain impaired-property claims	Product liability and completed-operations terms; the specific exclusions and exceptions
Recall expenses	The illustrative form excludes costs to withdraw or recall your product, your work or impaired property because of a known or suspected defect	Product recall coverage
Contractual liability	The illustrative form excludes liability assumed in a contract, with exceptions for liability you’d have without the contract and for liability assumed in an “insured contract” as defined	The contract, the definition of “insured contract,” and any endorsements

Fixing defective work vs. resulting damage. The cost of repairing or replacing your own faulty work or product is a different question from injury or damage it causes to others or to other property. The illustrative form treats these differently through its exclusions and exceptions. Neither is automatically covered or excluded; the facts and policy wording decide.

For detail, see our guides to commercial auto, workers’ compensation, EPLI, professional liability vs. GL, cyber insurance and product liability.

Contracts, certificates and additional insureds

• Named insured. The person or entity identified as a named insured in the policy declarations.
• Who else is an insured. The base form itself treats certain people as insureds for specified purposes. In the illustrative form, for example, employees are insureds only for acts within the scope of their employment, and an LLC’s members and managers are insureds only as the form describes.
• Additional insured. Other parties, such as a landlord, client or general contractor, may be added by an additional insured endorsement, and their coverage is limited to what that endorsement provides.
• Certificate holder vs. additional insured. Being listed as a certificate holder doesn’t make someone an additional insured. TDI explains that a certificate may not use terms that would “alter, amend, or extend coverage” provided in the policy, and that a certificate can’t name a party as an additional insured beyond what the policy’s endorsements provide (TDI certificates FAQ).
• Ongoing vs. completed operations. Some contracts require additional insured status for ongoing work, completed work or both. Check which the endorsement actually provides.
• Primary/noncontributory and waiver provisions. If a contract asks for these, confirm whether your policy includes endorsements that provide them.
• A contract requirement isn’t proof of coverage. A lease or contract that requires insurance doesn’t establish that your policy meets it, and a certificate doesn’t create or expand coverage.

We don’t interpret indemnity agreements or Texas construction law; ask your attorney about those. For lease requirements, see our commercial lease guide.

Hypothetical examples: coverage-review questions

These are illustrations, not real customers or predictions of outcomes.

A customer slips at the business premises

Assume a customer falls in a store and is hurt. Questions to review:

• Is the injury bodily injury caused by an occurrence on premises covered by the policy?
• Does medical payments coverage apply, and has the policy’s one-year incurred-and-reported condition been met (in the illustrative form)?
• What is the each-occurrence limit, and how much of the general aggregate remains?
• Has the business given notice “as soon as practicable,” as the illustrative form requires?

A contractor allegedly damages a customer’s property while working

Assume a contractor working in a customer’s home is accused of damaging the customer’s flooring and furniture. Questions to review:

• Was the flooring the particular part of real property the contractor was working on, or other property? How do the form’s property-being-worked-on provisions apply?
• Was any of the furniture in the contractor’s care, custody or control, and how does the related provision apply?
• Was the damage to the contractor’s own work, or to other property?
• Is the claim for the cost of redoing the work, or for resulting damage?
• Does the contract require additional insured status for the customer or anyone else?

A business faces an advertising-related allegation

Assume a competitor claims a business’s advertisement copied its slogan. Questions to review:

• Does the allegation fit a specified offense, such as infringing another’s slogan in your “advertisement”?
• Was the material first published before the policy period?
• Does the claim involve trademark or other intellectual property outside the form’s exceptions?
• Is the claim based on a knowing violation, or on a breach of contract?

Checklist: what to review

• Your full policy: declarations, coverage form and all endorsements
• Correct named insured and other insured entities, and an accurate description of your operations
• Coverage trigger (occurrence or claims-made) and coverage territory
• Each-occurrence, general aggregate, products-completed operations aggregate and other limits
• Exclusions and endorsements that apply to your operations
• Contract and lease insurance requirements, including additional insured, primary/noncontributory and waiver provisions
• Notice, cooperation and other conditions after an occurrence, offense, claim or suit

For what to have ready when getting a quote, see our general liability quote guide.

Sources

Regulator and form sources give general guidance; they don’t describe every policy. The standard form is cited for illustration only. It isn’t confirmed as the form, edition or endorsements in any current Texas policy. Your policy’s wording controls.

• Texas Department of Insurance, Commercial general liability insurance
• Texas Department of Insurance, Certificates of insurance FAQ
• Illustrative standard form: ISO Commercial General Liability Coverage Form CG 00 01 04 13 (© Insurance Services Office, Inc., 2012), as hosted by Argo Group

About Melliand Insurance Agency

Melliand Insurance Agency is an independently operated insurance agency affiliated with Premier Group Insurance (PGI), a nationwide agency network.

Questions about general liability coverage for your business? Call (972) 346-4666 or email melliandinsurance@gmail.com. Hours are Monday–Friday, 8 AM–5 PM Central. We don’t have a walk-in office. In-person visits are by appointment at your home or business throughout DFW.

This guide is general information, not legal advice or a statement of coverage. Coverage depends on the actual policy, and only the policy terms control.