The Opening Story
Three issues this month have been about what goes wrong. This one isn't.
A mom-and-pop restaurant, thin margins, the kind of place where the owners work the floor themselves. A customer fell. The suit came in at $340,000 — enough to end them. The building would have gone. The employees would have lost their jobs.
They paid nothing.
Their general liability policy covered the defense and the settlement in full. The business stayed open. The staff kept working. The owners are still there today.
I've spent thirty years in this work and I still remember what I felt when that one closed out. Relief. Just relief.
The Insight
That case is the entire argument for general liability, and it's worth being precise about why.
The defense obligation is separate from the payout, and it's often the bigger benefit. Your carrier's duty to defend usually kicks in on any claim that could plausibly fall within coverage — even one without merit. Defense costs on a suit like this run into six figures on their own, and on most GL forms they're paid outside your limit rather than eroding it.
It converts an unbounded risk into a known cost. A lawsuit has no ceiling you control. A premium does. That trade is the whole product.
It's the coverage most often skipped by the businesses that need it most. Thin margins make the premium feel like the thing you can cut. Thin margins are exactly why you can't absorb the loss.
The Protection Checkpoint
Confirm your GL limits — per-occurrence and aggregate. Know both numbers.
Check whether defense costs sit inside or outside your limit. Inside means every dollar spent defending you reduces what's left to settle with.
Compare your aggregate against a realistic worst case for your industry. For customer-facing businesses, a single serious injury claim can consume most of a $1M occurrence limit.
If you're near the ceiling, price an umbrella. Additional millions of coverage above your GL are usually far cheaper than the first million.
Ask John
"I've never had a claim in fifteen years. Do I really need this?"
Fifteen clean years tells you that you run a careful operation. It tells you nothing about next Tuesday. Every owner I've watched lose a business to a liability claim had a clean record right up until they didn't. That's the nature of the thing — it doesn't build up, it arrives.
The Bottom Line
That restaurant is still open because someone made sure the policy was right before anyone needed it to be.
That's the whole job. Not selling coverage — making sure the coverage is correct on the ordinary day, so it holds on the bad one.
If you're not certain your liability limits would hold up against a serious claim, reply to this email. I'll look at it with you.
John Crist
Prestizia Insurance
Author, The Prestizia Protection Playbook