What is Commercial General Liability Insurance?
Commercial General Liability Insurance often referred to as CGL insurance is a core coverage in a business insurance policy. It protects you and your business from claims of property damage or bodily injury to third parties such as clients or the public because of your business operations.
What Level of Liability Insurance Does My Business Need?
We offer liability insurance starting with $1 Million in coverage for some policy types, but we recommend you to have a minimum of $2 million. This is because compensation claims are increasingly rising as well as the values of property that contractors are typically working with. Working with clients or cities, they often require you to show proof of at least $2 million in liability insurance. Ultimately you need to determine yourself an adequate limit based on what risks and exposures you have as a business owner.
Depending on the nature of your business you may need or want even more coverage. And it is starting to become normal that clients and governments are demanding $5 million or more as the complexity of projects and risks increase.
A Real Life Example of a Claim We Once Covered
A contractor was hired to install an Ethernet internet cable in a senior’s residence. When drilling through a wall, the contractor accidently hit a main water supply pipe. This caused damage to the floor and walls below. The total bill of expenses for clean up and repair to the facility was $83,500.
- The Amount Paid By the Insurance Company $82,500
- The Amount Paid by Our Contractor $1,000
As you can see our contractor was responsible for paying their $1,000 deductible and the rest was paid by the insurer. The contractor’s insurance policy only cost $1,500 annually.
What To Consider Regarding Your Liability Policy?
- Does your policy accurately reflect your business operations in the declaration pages of the policy?
- Have you checked your policy and gone through exclusions, deductibles, limits of coverage and type of coverage?
- Are your level of sales accurately reflected in your policy?
- Are any of your sales from outside Canada?
What Are Common Exclusions under a CGL Policy
Although every policy is different and it is best to speak with a Licensed Broker about an individual policy, typical exclusions may include
- Injury to owners and employees
- Poor or faulty workmanship
- Are your level of sales accurately reflected in your policy?
- Events that give rise to pollution
- Design work or advice
- Among Others – others exist and it is best to speak with a licensed broker.
What Kind of Businesses Do We Provide Liability Insurance To?
- Building Owners
- Contractors
- Mechanics
- Restaurants
- Shops
- Among other types of business
What About Other Business Insurance?
Commercial General Liability insurance is only just an example of one type of coverage in a business insurance policy; other coverage may be available depending on the type of business you operate. When purchasing coverage you should answer the following?
- Do you operate in a rented or leased premises?
- Do you own stock?
- Do you own tools or equipment?
- Does your business sell or provide services to the general public, other businesses or the government?
- Does your business employee staff?
- Does your business use sub-contractors?
- Are your customers primarily – residential? Commercial? Government?
- Do you do any work above 3 stories
- Do you provide a majority of services to Condominiums?
- Are any of your sales derived from outside of Canada?
- Among other prudent questions should be asked to get a full understanding of your business.
