CGL insurance: Get commercial general liability insurance
All businesses face inherent financial risks associated with liability. Commercial general liability (CGL) coverage insures your day-to-day operations against third-party bodily injury and property damage claims – request your free quote with us today.
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What is commerical general liability insurance in Canada?
Commercial general liability (CGL) insurance is a type of business insurance that protects you from third-party claims of bodily injury and property damage as a result of your day-to-day operations. Reducing risk is key to keeping your business running. So if a customer slips and injures themselves in your restaurant or an employee damages a client’s floor during a construction job, having a CGL policy can help cover related costs – including legal fees, medical expenses, and compensatory damages.
What does CGL insurance cover?
What doesn't CGL insurance cover?
Other terms for commercial general liability insurance
Commercial General Liability (CGL) insurance is often referred to by shorter names, such as general liability insurance and CGL insurance. Be aware, however, that different insurance providers might offer varying scopes of coverage under these titles. Be sure to review the specifics of your policy carefully to ensure it meets your business's needs.
Who needs CGL insurance coverage?
If your business interacts with the public, operates in a physical space, or provides services that could result in property damage or bodily injury, having general liability insurance is crucial. This coverage safeguards your business from the financial fallout of potential lawsuits and claims. In some cases, you may even be required to carry general liability insurance – such as having a stipulation in a leasing agreement with your commercial property landlord. Here, we delve into professions that can significantly benefit from having the right policy in place.
Retail stores
Retail businesses, from boutiques to large chains, frequently deal with customers on their premises. This interaction poses risks such as slip-and-fall incidents or accidental damage to customers' property. CGL insurance helps protect against these liabilities, covering legal costs and damages.
Construction sites are fraught with potential dangers that could lead to injuries or property damage to third parties. Whether it's an accident involving heavy machinery or damage to a neighboring property, CGL insurance provides essential coverage for incidents that occur during construction projects.
Gyms and fitness facilities often face liability issues related to clients' injuries, such as those from equipment malfunctions or strenuous workouts. CGL insurance safeguards against claims of bodily injury or property damage within the fitness environment, ensuring that businesses can manage these risks effectively.
Operating in both residential and commercial settings, cleaning companies are exposed to numerous liabilities. These include potential property damage, slip-and-fall accidents, or injuries to occupants while performing cleaning tasks. A CGL policy offers protection against these common risks, helping cover the costs of legal claims and damages.
Restaurants
Restaurants and food service establishments encounter various liability challenges, such as customer slips, food-related incidents, or property damage caused by staff. CGL insurance provides coverage for legal expenses and settlements arising from these types of claims, ensuring the business can continue to operate smoothly.
Event planners and venue operators are tasked with maintaining the safety and security of their events. They face potential claims from accidents, injuries, or property damage during events. CGL insurance is vital in offering coverage for these occurrences, helping manage the financial impact of such incidents.
Examples of CGL policy insurance claims
To understand the value of commercial general liability insurance, it's helpful to look at a few specific examples of claims you could potentially face. Here, we outline three different liability incidents, along with how having the right coverage in place can protect your small business financially.
Slip-and-fall incident
A customer slips and falls on a wet floor in your retail store, resulting in a serious injury. Your CGL insurance can help cover the medical expenses for the injured customer, as well as any legal fees or settlements if they decide to file a lawsuit against your business.
Construction damage
While performing construction work at a client's property, one of your employees accidentally damages a neighboring building. Your CGL insurance can cover the costs of repairing the damage, including property restoration and legal expenses if the property owner files a claim against your business.
Advertising injury
Your agency's advertisement makes false claims about a competitor's products, alleging they are unsafe and ineffective. The competitor files a defamation lawsuit, citing harm to their reputation and financial losses. Your CGL insurance covers legal expenses and damages resulting from the claim.
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How much is general liability insurance?
The cost of commercial general liability insurance varies depends on the specific risks associated with your operations. Typically, small to medium-sized businesses can expect to pay annual premiums ranging from $500 to $3,000 for CGL coverage . But know that these are general estimates, and the exact cost for your business may differ – higher-risk industries and businesses with larger operations may incur higher premiums. To obtain an accurate quote tailored to your business needs, be sure to shop the market with us today.
CGL insurance can also be combined with other business insurance coverages – such as professional liability insurance, business interruption insurance, director's and officer's insurance, cyber liability insurance, and product liability insurance – under one quote in a single policy. Consulting a licensed commercial insurance broker can help ensure your insurance package is customized to your unique business needs.
Factors that impact your general liability insurance quote
To better understand the quoting process, here are six different factors that impact the cost of your general liability insurance. Broadly speaking, the more risk your business brings, the more you'll need to pay to insure it.
Industry type
The industry in which your business operates plays a significant role in determining your CGL insurance premium. Industries with higher risk factors for liability claims, such as construction and hospitality, may face higher insurance costs due to the increased likelihood of claims.
Claims history
Your claims history, including any past liability claims filed against your business, can influence your CGL insurance premium. Businesses with a history of frequent or severe claims may be viewed as higher risk by insurers, leading to higher premiums.
Business size & revenue
The size and revenue of your business are important factors in assessing your CGL insurance premium. Larger businesses with higher revenues typically face higher premiums, as they may have greater exposure to liability risks and potential financial losses from claims.
Coverage limits
The coverage limits you choose for your CGL insurance policy directly affect your premium. Opting for higher coverage limits provides greater protection but typically results in higher premiums. It's essential to assess your coverage needs carefully to strike the right balance between protection and cost.
Experience
Your business's experience and longevity in its industry can impact your CGL insurance premium. Insurers may offer discounts to businesses with extensive experience and a proven track record of responsible business operations.
Risk management
Implementing strong risk management practices, such as maintaining a safe work environment, implementing proper safety protocols, and conducting regular employee training, can help lower your CGL insurance premium. Insurers may offer discounts to businesses with robust risk management measures in place.
Tips to help avoid general liability claims
Uphold safety standards
It’s important to follow all the safety standards in your industry to reduce your risk of being liable for bodily injury or property damage. Always use the proper equipment and products in your line of work, and keep the working environment clean to avoid fire or slip and fall accidents. If a third party files a claim against you, and you haven’t been following regulated safety standards, it could cost more.
Handle customer property with care
If you run a repair business, make sure to handle your client’s property with caution and follow proper procedures. For example, if you repair computers, it’s always a good idea to document the condition of the device before you start working to reduce any invalid claims. Be sure to also have a proper system for storing your customer’s items, especially if they’re valuable or contain sensitive information.
Watch your marketing
As a small business owner, it’s also important to watch what you say or post about your clients or competitors. Speaking poorly about others in person or online could result in a lawsuit for slander or libel. Also, make sure you aren’t infringing someone else’s copyright by only using licensed content for your business.
Train your employees
Ensure your employees understand the standards of your business, including how they might represent your business online or with their words. Equip them with the right knowledge and the why to create a safe environment for others and handle your clients’ property with care to reduce the possibility of a general liability claim.
Frequently asked CGL insurance questions
Does general liability insurance cover lawsuits?
Yes, but it depends on the type of lawsuit filed. In general it can provide protection from lawsuits filed by customers, clients and vendors. Your policy should cover lawsuits associated to product liability, personal/bodily injury, copyright infringement and property damage.
There will be limits to the size of lawsuit the policy will cover - i.e. the coverage amount for compensatory damages. You will want to understand the limits of your coverage to make sure you have enough coverage and are aware of the limitations.
It's also important to note that your policy may not cover all expenses associated with a suit. This speaks again to the limitations and guidelines of a policy. You need to understand how much coverage you have and what is and isn't covered. Best to speak with your insurance broker to get a full run down of how your general liability coverage works.
What’s the difference between general liability insurance and professional liability insurance?
Both types of business insurance provide compensation for legal fees and damages if a third party decides to sue. However, general liability insurance protects the business against claims of bodily injury and property damage while professional liability insurance protects the business against claims of errors and omissions from your professional services.Â
For instance, if you’re shopping for your health and fitness business, having a CGL policy will protect you from an injury claim if a client trips on your equipment. However, if the client injures themselves under the advice of a personal trainer, you would need professional liability insurance for protection.
Is commercial general liability insurance mandatory to have?
Commercial general liability insurance is usually not mandatory unless a client requests for you to have it or your landlord requires it for you to lease a commercial space. However, any business, no matter how small, should consider making the purchase as one claim could cause a tremendous financial burden and shut down your operations.Â
How do I get commercial general liability insurance in Canada?
To purchase general liability insurance as part of your business insurance package, take a few minutes to fill out our free online CGL quote comparison. We’ll calculate the cost of your policy and connect you with a licensed life insurance broker in Canada who will guide you through making the purchase.Â
Are volunteers covered under a commercial general liability policy?
Depending on your business type and the insurance provider, you can purchase general liability coverage that extends to volunteers. It will impact the price you pay for coverage, most likely it will increase the price of the policy due to the increased risk associated with volunteers.
If your organization or business accepts volunteers it is important to ensure your general liability policy includes coverage for volunteers. A volunteer is considered a higher liability risk as they may not have the same level of skill or training as your regularly employed workforce and your organization would be held liable for the actions of a volunteer.
Having a commercial general liability insurance policy that covers volunteers is a must have for any non-profit organizations to manage risks and protect valued volunteers.
Does general liability insurance cover independent contractors?
It really depends on your policy and the insurance provider, but your policy might extend coverage to independent contractors for certain liabilities associated with the work they do for your business. Though, it isn't commonly provided and could come at an increased cost.
Most independent contractors would have their own liability coverage as part of a contractors insurance policy.