General liability insurance pays claims that your business injured someone who is not your employee or damaged their property, plus the cost of defending those claims. It does not cover your own property, injuries to your own employees, mistakes in professional advice, your vehicles, or harm you cause on purpose. Most of those gaps have their own kind of policy, and knowing which one fills which gap is most of what a business owner needs before a contract, a lease or a first hire asks for proof of coverage.
Table of contents
- What does general liability insurance cover?
- What does general liability insurance not cover?
- Which policy fills each gap?
- Why would a contract or a lease ask for more?
- How do I read the exclusions on my own policy?
- Frequently asked questions
What does general liability insurance cover?
General liability, often called commercial general liability, is cover the U.S. Small Business Administration lists for any business. It is built around claims made against the business by other people. A standard policy has three parts:
- Bodily injury and property damage liability. Claims that your premises, your operations or your employees injured someone or damaged their property, such as a customer who trips on loose flooring in your shop, or a client's home damaged by water left running on a job.
- Personal and advertising injury. Claims such as libel, slander, or using someone else's advertising idea.
- Medical payments. Limited payments for medical costs when someone who is not your employee is hurt in an accident at your premises or from your operations. This part pays without anyone having to prove fault.
For a covered claim, the policy usually pays the cost of your legal defense, and pays the damages you are found liable for up to the limits on your declarations page.
What does general liability insurance not cover?
The gaps are as important as the cover. Standard general liability policies leave out several things a business owner might assume are included:
- Your own property. General liability covers harm to other people's property. Loss of or damage to your own equipment, tools and stock needs property cover, and tools or equipment taken to job sites may need a policy written for property on the move.
- Injuries to your own employees. Workers compensation is excluded and is bought as its own policy.
- Professional mistakes. Professional liability can be excluded, so a claim that your advice, design or professional service caused a client a loss usually needs its own policy.
- Vehicles. Accidents involving cars, vans or trucks used for the business belong on an auto policy.
- Damage to your own work. Repairing or replacing faulty work you did, or a faulty product you made, is generally not covered, even though harm it causes to others may be.
- Intentional harm. Damage or injury you cause on purpose is excluded.
- Pollution. Pollution liability is excluded; a limited endorsement or a separate policy can add it.
- Employment claims. Employment practices liability, for claims such as discrimination, harassment or wrongful termination, is excluded and bought separately.
- Liquor liability. For a business that makes, serves or sells alcohol, claims tied to that alcohol are not covered unless the business buys liquor liability cover.
Which policy fills each gap?
Most exclusions point to a different policy; harm you cause on purpose and redoing your own faulty work have none. This table sets the others side by side.
| What general liability leaves out | The policy that usually fills the gap |
|---|---|
| Your equipment and stock at your premises | Commercial property, or a business owners policy; ask separately how tools and equipment at job sites are covered |
| Injuries to your employees | Workers compensation |
| Mistakes in professional advice or work | Professional liability, also called errors and omissions |
| Vehicles used for the business | Commercial auto |
| Employment claims from staff | Employment practices liability |
| Pollution | A pollution endorsement or a separate pollution liability policy |
| Claims tied to alcohol you make, serve or sell | Liquor liability |
| Claims larger than your limits | A commercial excess, or umbrella, policy |
Not every business needs every line. A consultant working from home may think about professional liability long before commercial property; a contractor with employees and a work truck has to think about workers compensation and commercial auto as well. The business insurance page walks through the moments that usually call for new cover, such as a contract, a lease or a first hire.
Why would a contract or a lease ask for more?
A client contract or a commercial lease often asks for more than general liability. A landlord may require property cover for what you keep in the space. A client may ask to be named as an additional insured on your policy, and may ask for a certificate of insurance as proof before work starts.
Before you sign, read the insurance section of the contract or lease line by line. It usually names the coverages it wants, the limits, and who must be added to the policy. Matching those words to your declarations page and your endorsements is the quickest way to find a gap before it matters; an additional insured is usually added by endorsement, not shown on the declarations page.
How do I read the exclusions on my own policy?
Your declarations page lists the named insured, the policy period, the coverages and their limits, any deductible, and the forms and endorsements that make up the policy. The exclusions are not on that page. They are written in the policy wording itself, in a section usually titled exclusions, and in any endorsements that add to or change the standard form.
Three habits help:
- Read the exclusions section once, slowly, and list anything that touches your work.
- Check the endorsements, because an endorsement can add an exclusion that the standard form does not have, or remove one.
- Compare the list with how you actually work: who you hire, what you sell, where you do the work, and what your contracts ask for.
If a word in the policy is unclear, ask a licensed agent what it means for your business before a claim makes it urgent. The business insurance cost guide explains what drives the price of business insurance.
Have a question about what your business needs? Ask Jodi a question, or call (480) 228-0591. Jodi Morris is a licensed Arizona insurance agent based in Phoenix.
Frequently asked questions
Does general liability cover my own equipment?
No. General liability pays for harm your business causes to other people and their property. Your own equipment, tools and stock need property cover, often through a business owners policy.
Does general liability cover an employee who gets hurt at work?
No. Workers compensation and employment practices liability are excluded from a standard general liability policy. Injuries to your own employees are a workers compensation matter, and Arizona law brings almost every employer with regular employees under it.
Does general liability cover a mistake in my advice or design?
Usually not. Professional liability can be excluded from a general liability policy. A claim that your professional advice or work caused a client a loss is covered by professional liability insurance, also called errors and omissions.
Is a business owners policy the same as general liability?
No. A business owners policy bundles general liability with other common coverages, such as property cover, into one package. General liability can also be bought on its own.
Sources
- Insurance Information Institute: Commercial general liability insurance, checked October 8, 2026
- U.S. Small Business Administration: Launch your business, get business insurance, checked October 8, 2026
- Arizona Revised Statutes: Employers subject to workers compensation, checked October 8, 2026
About the author
Published by JM Agency. Jodi Morris is a licensed Arizona insurance agent based in Phoenix with Property, Casualty and Life lines of authority. This article explains coverage in general terms; the policy wording decides what any one policy covers.