General Liability Insurance in Texas

What a Texas general liability policy covers

General liability insurance pays when a business injures someone outside the business or damages property belonging to someone else. Lawyers and landlords call it the third-party policy, and that phrase is the clearest description of it.

A standard commercial general liability form carries three coverages:

• Bodily injury and property damage liability, which covers the customer who slips on a wet floor and the pipe a crew puts a drill through
• Personal and advertising injury, which covers libel, slander, and using someone else’s advertising idea
• Medical payments, a small no-fault amount that pays a minor injury without anyone arguing about blame

Defense costs come with the policy. An insurer that owes a defense pays the lawyer whether the claim against a Texas business turns out to be worth anything or not.

What a Texas general liability policy does not cover

General liability covers harm to outsiders, which leaves four large exposures for other policies to handle.

Not covered by general liability:

• An employee hurt on the job, which is workers compensation
• A mistake in professional advice or service, which is professional liability
• Damage to the building, stock, or equipment the business itself owns, which is commercial property
• A crash in a vehicle the business owns or uses for work, which is commercial auto

Work the business performed badly is the exclusion that surprises Texas contractors most. A general liability policy pays for the water damage from a bad installation, and it does not pay to redo the installation.

Read the exclusions before the limits. The exclusions decide whether a claim is covered at all.

The limits a Texas contract or landlord usually requires

Texas sets no general liability limit for most private businesses, so the number in a contract is a private requirement rather than a legal one. Licensed trades are the exception: Texas Occupations Code §1305.159 makes an electrical contractor prove financial responsibility, and §1302.102 has the Texas Department of Licensing and Regulation set the insurance an air conditioning and refrigeration license carries.

Where the rest of the limits come from:

• The customer’s master services agreement or purchase order
• The landlord’s lease, usually alongside an additional insured requirement
• A general contractor’s subcontract on a construction job

Two numbers sit in a liability requirement: a per-occurrence limit, which caps one claim, and a general aggregate, which caps the policy year. A business that exhausts the aggregate in March has no liability coverage for the rest of the term.

What the certificate and the endorsements do

A certificate of insurance proves coverage exists on the day it is issued, and proves nothing after that.

What each document does:

• The certificate is evidence, and Texas Insurance Code §1811.051 bars it from altering, amending or extending the policy it names
• An additional insured endorsement extends the policy to the other party, and that one does change coverage
• A waiver of subrogation gives up the insurer’s right to recover from the other party after it pays
• A primary and non-contributory endorsement puts the business’s policy ahead of the other party’s

Texas Insurance Code ch. 1811 governs the form as well as the effect: §1811.101 requires a filed, approved certificate form that either carries the words for information purposes only, or states instead that the certificate confers no rights beyond the policy and that the policy terms control. Texas contracts often demand all four documents in one clause, so bring the clause to the call.

What Aulona Insurance Group can place

Aulona Insurance Group places general liability for Texas businesses statewide, standalone or packaged into a business owners policy, through insurers it holds appointments with.

Inside the small-business program:

• Annual gross revenue under $5 million, and total W-2 payroll under $5 million
• Loss history under $20,000, with no more than two incidents in the past three years
• No prior carrier cancellation and no bankruptcy filing
• New businesses, with no minimum time in business

Restaurants, professional services, fitness studios, retail, personal care, technology services, and real estate are classes the agency writes. Construction trades are workable, and liability plus umbrella is commonly the structure used there rather than a package.

Luka Cenaj, the agency’s licensed principal, goes through the contract requirement on a recorded call before anything is quoted.

Where Aulona Insurance Group is not the right fit

Aulona Insurance Group cannot place general liability for every Texas business, and an owner with a contract deadline should hear that first. The eligibility band in the section above settles the numbers; the classes below have no general liability market here at any size.

Classes with no general liability market:

• Roofing and siding, which is a no-market problem rather than a pricing one
• Night clubs, gas stations, towing operators, and auto dealerships
• Hospitals and physician practices, where the exposure is medical rather than premises
• Marijuana and cannabis businesses
• Used-goods dealers and non-durable goods wholesalers
• Livestock operations and pet breeders

Anything that has to go to surplus lines is outside what Aulona Insurance Group writes in-house.

What moves the price of a Texas general liability policy

The premium on a Texas general liability policy is set by the insurer, not by Aulona Insurance Group, and the insurer applies rates it has filed with the Texas Department of Insurance.

What a general liability rate is built from:

• The class code, which is why a bookkeeping practice and a masonry crew price nothing alike
• Annual gross revenue, and payroll or subcontractor cost on construction classes
• Claim history, where the size of past losses matters more than how many there were
• The limits chosen, and the endorsements a contract forces onto the policy

Aulona Insurance Group publishes no premium on this site and does not rank insurers by price. The number comes from the insurer that agrees to write the risk, on the call with Luka Cenaj.