General liability insurance for Texas small businesses: what it covers and who needs it
If a customer slips in your shop or your crew damages a client's property, general liability is the policy that responds. Here's what it covers, what it doesn't, and what it costs in Texas.
The one policy almost every business needs
General liability (GL) is the foundation of business insurance. It pays when your business is legally responsible for hurting someone or damaging their property — and just as importantly, it pays the legal defense costs even when a claim is bogus.
What general liability covers
- Bodily injury — a customer slips on your floor, a shelf falls on a client, your employee backs a cart into someone.
- Property damage — your crew breaks a client's window, spills chemicals on their flooring, or damages a neighboring unit.
- Personal and advertising injury — claims of libel, slander, copyright infringement in your advertising, or wrongful eviction.
- Medical payments — small no-fault payments for minor injuries on your premises, which often settle incidents before they become lawsuits.
- Legal defense — attorney fees, court costs, and settlements, up to your policy limits.
What it does NOT cover
GL is not everything insurance. Common gaps:
- Your employees' injuries — that's workers' compensation (or occupational accident coverage in Texas, where workers' comp is optional for most private employers).
- Your own property — that's commercial property insurance.
- Professional mistakes — bad advice, design errors, missed deadlines. That's professional liability / E&O.
- Vehicles — that's commercial auto.
- Data breaches — that's cyber liability.
Who needs it in Texas?
Honestly: almost every business that interacts with customers, clients, or the public. Specifically:
- Contractors and trades — most general contractors and clients require a certificate of insurance before you set foot on a job.
- Retail and restaurants — foot traffic means slip-and-fall exposure.
- Landlords' requirements — most commercial leases require $1M in GL naming the landlord as additional insured.
- Anyone signing contracts — client contracts increasingly require proof of GL.
Standard limits and what they cost
The most common structure is $1,000,000 per occurrence / $2,000,000 aggregate. For a low-risk Texas small business (office, retail, consulting), that typically costs $400–$900 per year. Contractors, restaurants, and higher-risk trades pay more — often $1,000–$3,000+, depending on revenue, payroll, and claims history.
Certificates of insurance: the day-to-day reality
Half the practical value of GL is the certificate of insurance (COI) — the document proving you're covered. Clients, landlords, and general contractors ask for them constantly, often needing to be named as "additional insured." Work with an agency that turns COIs around fast; waiting three days for a certificate can cost you a job.
The bottom line
General liability is usually the cheapest policy in your insurance stack and the one you'll be asked to prove most often. If you have a lease, a client contract, or customers on your premises, you need it — and at a few hundred dollars a year for many businesses, there's no good reason to go without.