Coverage basics
Everything is included — except what's excluded.
≈ 3 MIN READ
Most business owners read an insurance policy looking for the list of things that are covered. With general liability, that's backwards. A GL policy starts with a remarkably broad promise — and then carves pieces out of it. If you want to understand your coverage, skip to the exclusions.
The broad promise
The heart of a general liability policy is one sentence: the carrier will pay sums you become legally obligated to pay as damages because of bodily injury or property damage to a third party, caused by an occurrence. Add coverage for personal and advertising injury (things like libel, slander, and certain privacy claims) and medical payments, and that's the grant. Notice what it doesn't say — it doesn't list covered activities, covered accidents, or covered situations. If a third party is injured or their property is damaged and you're legally liable, the starting position is that it's covered.
Then come the exclusions
Everything that narrows that promise lives in the exclusions and the endorsements attached to your specific policy. Common ones worth knowing:
- Expected or intended injury — GL covers accidents, not deliberate acts.
- Your work and your product — damage to the work you performed itself is generally excluded; GL responds to the damage your work causes, not the cost of redoing it.
- Professional services — advice, design, and similar errors belong to a professional liability (E&O) policy.
- Auto, aircraft, watercraft — vehicles have their own policies.
- Employee injury — that's workers compensation's job.
- Contractual liability — partially excluded, with important exceptions for "insured contracts."
Here's the part that matters most: carriers modify the standard form with endorsements, and two businesses with "general liability" can have very different coverage. An endorsement can exclude subcontracted work, certain operations, or specific locations. Those pages at the back of the policy aren't boilerplate — they're often the whole story.
Limits: two numbers, not one
GL limits typically come in pairs — a per-occurrence limit (the most paid for any single claim) and an aggregate limit (the most paid in total during the policy term). A policy with a $1,000,000 occurrence limit and $2,000,000 aggregate doesn't promise $2 million for your big claim; it promises $1 million per event until the aggregate is exhausted.
How to read your own policy
Pull out your GL policy and read three things in this order: the declarations page (who, what limits, what endorsements are attached), the exclusions section, and then every endorsement listed. If you find an exclusion you can't explain, that's exactly the kind of question your agent should be able to answer in plain English. If they can't — well, you know where to find us.
This article is general information, not advice about your specific policy, and not a quote, binder, or contract of insurance. Actual coverage is governed solely by the terms of the issued policy.