What is Texas General Liability Insurance?
Insurance gives you peace of mind because you have protections in place. General liability insurance policies protect your business from bodily injury claims and property damage relating to your service or products.
Bodily injury claims refer to physical harm or death resulting from use of a business’s products, operations, or work environment. Property damage covers expenses for physical property damage caused by a business’s workflow or products.
General liability insurance coverage will pay for defense if a claim leads to a lawsuit. You can also use the funds to pay out settlements that result from a lawsuit judgment.
Texas doesn’t require businesses to have general liability insurance, but it protects you from having to shoulder the financial burden of these claims. Having to pay for the lawsuits and settlements can use a business’s profit, causing them to file for bankruptcy.
What Is Commercial General Liability Insurance?
Commercial General Liability (CGL) insurance protects businesses and individuals from claims arising from third-party bodily injury or property damage. This harm can include accidents on a business’s property and accidents caused by the business’s products or services.
CGL insurance can help cover medical expenses, legal fees, and other costs associated with such claims. The Texas government doesn’t require businesses to carry CGL insurance, but many choose to protect themselves from the potential financial burden of accident and injury claims.
Commercial landlords and larger companies may require a certain amount of general liability coverage to conduct business with them. This policy shows you’re willing to protect your business against injury lawsuits. In turn, this approach shows landlords that you follow best practices and will be a favorable renter.
With the rise of social media, CGL also covers slander and false advertising. This layer of protection helps you manage damage done online, along with the previously covered injury and harm aspects of the policy.
Texas Commercial General Liability Insurance Claims
In Texas, the insurance company that issued the policy handles CGL insurance claims. When someone makes a claim, the insurance company will investigate whether the business is liable for the damages. If the business is liable, the insurance company will pay out the claim according to the terms of the policy.
People can make many different claims under bodily injury and property damage. A store display can fall over on a shopper, so the store and product manufacturer are at fault. Employees can file suits claiming discrimination in the hiring or firing process. People can file claims if they get sick from consuming your food or drink products.
Many general liability insurance claims are legitimate, but some consumers will try anything. A story from Washington, D.C., made national headlines when a customer sued a dry cleaner for $54 million for losing a pair of pants. CGL insurance can protect you from going bankrupt due to these types of claims, however serious or trivial.
Possible Exclusions in CGL Policies
While CGL policies provide a wide range of coverage, certain types of claims may not have coverage under the policy. These can include:
- Claims arising from intentional, harmful acts
- Claims related to professional services
- Claims related to the use of vehicles
If a subcontractor works for you and causes damages, your CGL policy might not cover the expenses. You also risk complete coverage if you sign an agreement that you’ll pay for damages. Some CGL plans have contractual liability that will cover those fees only if you didn’t breach the contract in any other way.
CGL insurance doesn’t cover the cost it takes to recall products. You’ll have to pay for the consumer notices and repairs and replacements from your business expenses. If you manufacture products and worry about recall expenses, you can add a premium that handles these costs, though it will raise the price of your coverage.
Most CGL plans exclude any mention of pollution. Pollutants are any solid, liquid, or gas that results from waste and can harm people, animals, or the environment. You need to check your state and city regulations to find more information about properly disposing of pollutants.
If your business serves alcohol, you’ll want liquor liability insurance to protect your business. Professional liability insurance can protect from professional errors, while employment practice insurance can help with human resource issues. It’s important for businesses to carefully review their CGL policy to understand what is and isn’t covered.
Tips for Finding CGL Coverage
When looking for CGL coverage, businesses need to shop around and compare quotes from various insurance providers. Some popular general liability insurance providers in Texas include Travelers, State Farm, and Nationwide.
Business owners should also consider their specific needs and the type of risks they might experience to determine the level of coverage needed. Provide information about your past claims, so the broker understands what you’ve navigated and what coverage you need.
You should always carefully read through the policy and exclusions. Consulting with an insurance broker or agent can help you find the right coverage and ensure you understand the agreement’s limitations.
Final Notes
Texas law doesn’t require general liability insurance, but many business owners find it worth financial protection. Instead of putting your business at risk of bankruptcy, get a quote to invest in complete coverage to protect your reputation and assets.