Case Study Analysis United States Age 34 • Austin, Texas, US

Priya's Insurance Decision

Priya is moving her home bakery into a leased 900 sq ft café with three part-time employees, $38,000 of ovens and equipment, and a weekend delivery service using her own car. Her landlord requires $1M/$2M general liability naming them as additional insured. She has been quoted a general liability policy and assumes it 'covers everything.'

IB
Insurance Bhaiya Editorial Team
Updated September 2026
“My landlord only asked for general liability. If a customer slips, an employee gets burned, or someone steals my mixers overnight, am I actually covered?”
Insurance Bhaiya Analysis

Only one of those three is covered by general liability. A customer slip-and-fall is a classic third-party liability claim, and CGL handles it, including her legal defense under the insurer's duty to defend. An employee burn is excluded under CGL's employer's liability exclusion (does general liability insurance cover employee injuries). And Texas lets Priya skip workers' comp, but as a non-subscriber she can be sued directly and loses key defenses. Stolen equipment is a first-party property loss that liability never pays (does liability insurance cover theft). Finally, her delivery runs in a personal car are likely excluded by her personal auto policy's business-use limits. Priya needs a stacked plan, not a single policy. Start with our hub guide on what liability insurance covers and size limits with the Coverage Calculator.

Key Vulnerabilities & Financial Exposures

Exposure 01

Uninsured employee injuries: a serious oven burn or slip could produce $40,000 to $150,000 in medical and wage claims, with no CGL coverage and no workers' comp if she opts out.

Exposure 02

Theft and equipment loss: $38,000 of ovens, mixers, and POS hardware plus cash and inventory with no property or crime coverage on a liability-only policy.

Exposure 03

Delivery-car accidents: a crash during a paid delivery may be denied under her personal auto policy, leaving her personally liable for the other driver's injuries.

Recommended Risk-Transfer Blueprint

Strategy Step 01

Buy a Business Owner's Policy (BOP) combining $1M/$2M general liability (with products-completed operations for food-borne illness claims) and commercial property for equipment, inventory, and break-in damage.

Strategy Step 02

Add workers' compensation with employer's liability rather than going non-subscriber, plus an employee dishonesty (crime) endorsement for cash-handling staff.

Strategy Step 03

Add hired and non-owned auto liability to the BOP, or a business-use endorsement on her personal auto policy, before starting deliveries.

Target Budget Allocation
$170 - $320 / month

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Search Intent & FAQ

Priya's Insurance Decision's Case Study FAQs

Key risk takeaways and actionable steps for similar situations.

Does a café's general liability policy cover customers who get sick from food?
Generally yes, under the products-completed operations hazard included in most CGL and BOP policies. Confirm that your policy does not carry a products exclusion and that the aggregate limit is adequate. Defense costs for these claims are typically paid outside the limit; see does liability insurance cover legal fees.
Is workers' compensation required for a small business in Texas?
No. Texas is the only state where most private employers can opt out. But non-subscribers can be sued directly by injured employees and lose defenses such as contributory negligence, so many small employers still buy coverage. General liability will not fill the gap.