A million dollars of liability coverage is not a million dollars of protection against anything bad happening.
Commercial · Updated September 2026
A commercial general liability policy responds to claims by other people: bodily injury, property damage, and personal and advertising injury arising out of your premises, your operations or your completed work. It pays the claim up to your limits and pays to defend you.
That is a well-defined job, and the policy does it well. The trouble starts when an owner hears a million dollars and assumes it is a million dollars of protection against anything bad that could happen to the business.
1. Your own property. Your building, equipment, inventory, furniture and tenant improvements are property coverage, not liability. General liability pays nothing toward your own losses.
2. Employee injuries. Those belong to workers compensation. A GL policy excludes injury to your own employees arising out of employment.
3. Vehicles. Business vehicle claims are commercial auto. That includes employees driving their own cars on company time, which needs hired and non-owned coverage.
4. Professional mistakes. General liability responds to "you hurt me or damaged my property." It does not respond to "your advice, design or service cost me money." That is professional liability, also called errors and omissions.
5. Cyber incidents. A ransomware attack, a data breach, or a wire fraud triggered by a compromised email account are not general liability claims. Cyber coverage is a separate policy.
6. Employee dishonesty and social engineering. Theft by an employee, or a bookkeeper tricked into wiring money to a fraudster, falls under crime coverage, not GL.
7. Damage to your own work or product. If the work you performed is itself defective, repairing or replacing that work is generally excluded. The policy covers the damage your faulty work causes to other property, which is a critical distinction for contractors.
Also outside a standard GL policy: employment-related claims like wrongful termination or harassment, most pollution liability, and losses from your business being closed after a covered event.
Owners spend a lot of attention on whether to buy a one million or two million limit, which matters for contract compliance, and very little on whether the policy responds to their actual exposures at all.
A higher limit on a policy that excludes your biggest risk does not help. The more useful question is what could happen to this business that this policy would not cover — then close those gaps, then talk about limits.
Walk through the question list: Do you have employees? Do you or your employees drive for the business? Do tools or equipment leave your location? Do you store customer or payment data? Could a mistake in your work cost a customer money? Does a lease or contract require specific coverage?
Each yes points at a policy. We put every commercial prospect through that exercise before quoting anything — the small business insurance checkup.
No. GL covers claims by other people. Your own equipment, inventory and improvements need commercial property coverage, and tools that leave your premises usually need inland marine.
No. Employee injuries belong to workers compensation, and GL specifically excludes them.
For contract compliance, often required. For protection, it matters less than whether the policy covers your actual exposures. Fix the gaps first, then set limits.
Generally it covers damage your faulty work causes to other property, but not the cost of redoing the defective work itself. That distinction drives a lot of contractor claims.
Employment practices claims such as wrongful termination, discrimination or harassment are not covered by GL. They need employment practices liability coverage.
Questions about your own situation? Call 417.623.8300 or send us your current policy. We are licensed in Missouri, Kansas and Oklahoma.
Send your current policy and we will check limits, endorsements and what your contracts actually require.