What Does General Liability Insurance Typically Cover / Not Cover?

General Liability (GL) insurance covers a specific set of risks related to third-party bodily injury, property damage, and related claims. It's designed to protect you from lawsuits and claims arising from your work — but it doesn't cover everything. Here's a general breakdown.

Injuries to someone who isn't your employee — for example, a customer who trips over your tools or materials at a job site.

Damage you accidentally cause to a client's or third party's property while performing your work — for example, a plumber's error causes a pipe to burst and floods a client's basement.

Claims that arise after the job is finished — for example, a faulty electrical installation causes a fire weeks or months after the work was completed.

If your work involves supplying or installing a product (like materials or fixtures) that later causes injury or damage.

Claims related to your business's advertising or marketing — for example, accusations of copyright infringement, slander, or using someone else's trademark or slogan.

In most policies, the cost of defending a covered claim — including legal fees — is included, even if the claim is later found to be unfounded.

Injuries to your own employees are generally handled through provincial workers' compensation (e.g., WSIB in Ontario, WorkSafeBC in BC), not GL insurance.

GL doesn't cover your own tools, equipment, or business property if they're stolen or damaged. That's typically handled by Tools & Equipment (Inland Marine) coverage.

Vehicles used for business — including work trucks and vans — are generally covered under a Commercial Auto policy, not GL.

GL generally covers the damage caused by faulty work, not the cost to redo or fix the work itself. For example, if a poorly installed roof leaks and damages a ceiling, GL may cover the ceiling damage — but not necessarily the cost of re-doing the roof.

Claims related to design errors, incorrect professional advice, or specifications are typically covered under Professional Liability (Errors & Omissions), not standard GL.

Damage or injury that results from intentional or criminal acts is not covered.

Some contracts require liability obligations beyond what a standard GL policy covers. It's worth reviewing any client or general contractor agreement carefully, as some clauses may require additional endorsements.