$300K/$600K general liability is a thin limit that may clear a license minimum but rarely satisfies commercial customers. $1M per occurrence / $2M aggregate is the de facto standard most general contractors and property managers require — and the upgrade usually costs far less than the protection it adds. Beyond the limit, two things decide whether you keep the job: products-completed operations coverage, and the right additional insured endorsements (CG 20 10 for ongoing work, CG 20 37 for completed work). Match your policy to your contracts, not to the cheapest quote.
The number on your policy isn't the number that matters
Ask most Texas contractors what their general liability limit is and you'll hear "a million" or "three hundred." Ask why that limit, and the answers thin out fast. Usually it's whatever the license required, or whatever the cheapest quote came back with. Neither is a coverage decision — it's an accident.
The limit that actually matters is the one your customers require. A general contractor, property owner, or facility manager will hand you a contract with specific insurance requirements baked in: a per-occurrence limit, an aggregate, named additional insureds, often a waiver of subrogation and completed-operations coverage. If your policy doesn't match, you don't get on the job — or you get pulled off it.
So the real question isn't "how much GL do I want to buy?" It's "what do my contracts demand, and does my policy deliver it?" Let's translate the jargon.
Per-occurrence vs. aggregate: the two numbers on every GL policy
Every commercial general liability policy carries two core limits, and confusing them is the most common contractor coverage mistake we see.
- Per-occurrence limit — the most the policy pays for any single claim. If a customer's property is damaged by your work, this is the ceiling for that one incident.
- Aggregate limit — the most the policy pays for all claims combined during the policy term (usually one year). Once you exhaust the aggregate, the policy is done for the year, even if you're paying premium.
A typical contractor policy reads $1,000,000 per occurrence / $2,000,000 aggregate. That means up to $1M for any one claim, but no more than $2M total across the year. For a busy contractor with multiple jobs running, the aggregate is the quiet exposure — two or three claims in a bad year can erode it. That's why active contractors often layer an umbrella policy on top to extend both limits.
$300K/$600K vs. $1M/$2M: what each one really buys
| Limit | What it's good for | Where it falls short |
|---|---|---|
| $300K / $600K | Clearing a license minimum; very small residential jobs; lowest premium | A single serious bodily-injury or property-damage claim can blow past $300K; most commercial customers won't accept it |
| $1M / $2M | The de facto commercial standard — accepted by most GCs, owners, and property managers | High-hazard or large projects may require $2M occurrence or umbrella layers on top |
| $1M / $2M + umbrella | Large commercial work, prime contracts, customers requiring $5M+ total | Costs more, but extends both per-occurrence and aggregate affordably |
Here's the part contractors underestimate: the jump from $300K to $1M is usually far cheaper than the protection it adds. General liability rating isn't linear — doubling or tripling your limit doesn't double or triple your premium, because catastrophic claims are statistically rare. For most trades, moving from a $300K limit to the $1M/$2M standard is a modest premium increase that unlocks the entire commercial market and dramatically raises your ceiling. It's one of the best value upgrades in a contractor's program.
For TDLR-licensed trades, there may also be a regulatory floor. Texas air conditioning and refrigeration contractors, for example, carry state-mandated GL minimums — we broke that down in our Texas HVAC contractor insurance guide (Class A vs. Class B license requirements). Your license sets the floor; your contracts set the real target.
Products & completed operations: the claim that finds you two years later
General liability isn't only about accidents while you're on the job. The coverage that protects you after you leave is called products-completed operations, and for contractors it's non-negotiable.
Picture it: you install a roof, finish the job, get paid, move on. Two years later the flashing fails, water gets in, and the owner has a five-figure damage claim — against you. That's a completed-operations claim, and only products-completed operations coverage responds to it. Two things to check on your policy:
- Is completed-operations coverage included? It usually is on a standard contractor GL form, but confirm it — don't assume.
- What's the completed-operations aggregate? Some policies carry a separate, lower aggregate specifically for completed operations. If yours does, make sure it's adequate for your volume.
Ongoing operations = claims while the work is in progress. Completed operations = claims after the work is done. A roof that leaks on install day is one; a roof that leaks two years later is the other. A real contractor policy covers both.
Additional insured endorsements: CG 20 10 vs. CG 20 37
This is where contracts get won and lost. When a general contractor hires you, they almost always require you to name them as an "additional insured" on your GL policy — so your coverage protects them if your work causes a claim. There are two standard ISO endorsements that do this, and the distinction matters:
- CG 20 10 — adds the additional insured for liability arising out of your ongoing operations (work in progress).
- CG 20 37 — adds them for your completed operations (finished work).
Each endorsement covers a different phase of the job, which is why contracts frequently require both — so the GC is protected while you're working and after you've finished. The industry reference firm IRMI has a thorough explainer on how these forms work and why the ongoing/completed split exists, in its analysis of the ISO additional insured endorsements for the construction industry.
The trap: a contract requires completed-operations additional insured status (CG 20 37), but the contractor's policy only carries the ongoing-operations form (CG 20 10). On paper they look similar; in a claim, the gap is total. This is exactly the kind of mismatch an independent agent catches when reviewing your customer contracts against your policy.
The cheapest GL policy that doesn't carry the endorsements your contract requires isn't cheap. It's a job you're about to lose.
The certificate of insurance (COI): where it all comes together
You'll rarely hand a customer your actual policy. What they want is a certificate of insurance — a one-page summary proving you carry what the contract requires. Before you set foot on a commercial site, the GC or property manager collects your COI to verify:
- Your limits — usually $1M/$2M, sometimes more.
- Additional insured status — them, named, with the right endorsements (CG 20 10 and/or CG 20 37).
- Waiver of subrogation — often required, so your carrier can't come after them later.
- Products-completed operations — confirmed as included.
If your COI doesn't match the contract, you can be held off the job until it's fixed — and fixing it mid-project, mid-week, is exactly when you don't want to discover your policy is short. The fix is upstream: align your GL program to your customers' typical requirements before you bid, not after you've won.
GL is one piece — not the whole program
General liability covers third-party bodily injury and property damage. It does not cover:
- Your own employees' injuries — that's workers' comp, or in Texas, a non-subscriber / occupational accident program. See non-subscriber vs. workers' comp.
- Your own tools and equipment — that's inland marine / contractor's equipment coverage.
- Your vehicles and driving exposure — that's commercial auto, including hired and non-owned auto for employees running errands or driving personal vehicles for work. See hired & non-owned auto coverage.
A contractor's insurance program fits these pieces together so there are no gaps between them — and re-checks them every year as your work and contracts change. (We make the case for that here: why Texas businesses should re-quote annually.) Getting the pieces to interlock is the whole job of a good independent agent — which is also why it's worth knowing how to pick one that actually works for you.
Send us your current GL declarations page and a sample of the insurance requirements from a customer contract. We'll tell you inside 48 hours whether your limits and endorsements actually match what you're being asked to carry — and shop the market if they don't. No pressure, no commission unless you decide we earned it. Email us or call (877) 237-8167.