What Does General Liability Insurance Not Cover?

General liability insurance does not cover injuries, illnesses, or deaths suffered by employees while performing job-related duties.

Uncovered scenario: A warehouse employee slips while unloading inventory and suffers a serious back injury. The employee’s medical bills and lost wages are not covered by the business’s general liability policy.

Potential exposure if uncovered: Medical bills, wage replacement, and penalties that can exceed $50,000–$150,000 for a single serious injury.

What covers it: Workers’ compensation insurance

General liability insurance does not cover claims arising from professional advice, design flaws, consulting mistakes, or failure to deliver services as promised.

Uncovered scenario: A consultant provides incorrect guidance that causes a client financial loss. The client sues for damages, but the claim is excluded under general liability.

Potential exposure if uncovered: Client loss claims and legal defense costs commonly ranging from $25,000 to six figures, depending on severity.

What covers it: Professional liability (errors and omissions) insurance

General liability insurance does not apply to accidents involving vehicles used for business purposes, regardless of who owns the vehicle.

Uncovered scenario: An employee causes a collision while driving to a job site. The injured party files a claim against the business, which is denied under general liability.

Potential exposure if uncovered: Bodily injury, property damage, and legal costs that can exceed $100,000 in injury-related accidents.

What covers it: Commercial auto insurance or hired and non-owned auto coverage

General liability insurance excludes data breaches, ransomware attacks, hacking incidents, and electronic data loss.

Uncovered scenario: Hackers access customer payment data stored on company systems. Notification and legal costs are denied under the general liability policy.

Potential exposure if uncovered: Notification, regulatory, and remediation costs often totaling $50,000–$250,000 for small to mid-sized businesses.

What covers it: Cyber liability insurance

General liability insurance excludes claims involving pollution, contamination, hazardous materials, and environmental cleanup.

Uncovered scenario: A chemical spill during a job contaminates nearby soil, triggering cleanup orders and fines not covered by general liability.

Potential exposure if uncovered: Cleanup costs, fines, and third-party claims that can escalate into six-figure liabilities.

What covers it: Pollution liability or environmental liability insurance

General liability insurance only covers accidental events and excludes intentional or illegal acts.

Uncovered scenario: A business owner knowingly misrepresents services, leading to a fraud lawsuit that is denied under the policy.

Potential exposure if uncovered: Full responsibility for damages, legal costs, and penalties, with no insurance protection.

What covers it: No standard business insurance policy

General liability insurance may provide limited coverage for damage to rented property, often restricted to fire-related losses and subject to low limits.

Uncovered scenario: A fire damages a leased office space, and repair costs exceed the policy’s damage-to-premises limit.

Potential exposure if uncovered: Out-of-pocket repair costs beyond policy limits, often $25,000–$100,000+.

What covers it: Commercial property insurance or higher damage-to-premises limits

General liability insurance may cover bodily injury or property damage caused by a product but excludes recall-related expenses.

Uncovered scenario: A manufacturer recalls a defective product line, incurring shipping, disposal, and replacement costs denied under general liability.

Potential exposure if uncovered: Recall-related costs that commonly reach $50,000–$500,000, excluding lost revenue.

What covers it: Product recall insurance

General liability insurance generally covers liability that exists without a contract but may exclude additional obligations assumed through agreements.

Uncovered scenario: A service contract includes a broad indemnification clause. When a claim arises, coverage is denied due to assumed liability.

Potential exposure if uncovered: Damages assumed under contract that may reach six figures or more, depending on scope.

What covers it: Contractual liability coverage or specific policy endorsements

General liability insurance may cover limited advertising-related claims, such as libel or slander, but excludes most intellectual property disputes.

Uncovered scenario: A business uses a competitor’s trademark in an advertisement and is sued for infringement.

Potential exposure if uncovered: Legal defense costs and settlements often exceeding $25,000–$100,000.

What covers it: Media liability or intellectual property insurance

General liability insurance excludes the cost to repair or replace faulty workmanship.

Uncovered scenario: A contractor installs flooring incorrectly, requiring full replacement. The cost to redo the work is denied reimbursement in the event of a claim.

Potential exposure if uncovered: Out-of-pocket repair and rework costs ranging from $10,000–$100,000+.

What covers it: Contractor warranties or specialized contractor coverage