CGL insurance: Get commercial general liability insurance
All business face inherent financial risks associated with liability. Commercial general liability (CGL) coverage insurers your day-to-day operations against third-party bodily injury and property damage claims. Request your free quote.
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What is commercial general liability insurance?
Matt Hands, VP, Insurance and MoneySense
Commercial general liability, also known as 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 whether a customer slips and injures themselves in your restaurant or your employee damages a client’s floor during a construction job, having a CGL policy will protect you financially by covering any legal fees, medical expenses, and compensatory damages.
Does my business need CGL insurance in Canada?
Any Canadian business owner should consider purchasing general liability insurance because one mishap can lead to financial hardship. Having general liability insurance will protect you from the cost of legal fees and damages. In some industries, such as construction, clients will require a CGL policy before they hire you. Additionally, landlords of commercial property often require insurance coverage before leasing out their space.
CGL insurance is especially important if:
- Your business is open to the public
- You conduct business on a client’s property
- You work with clients or customers frequently
- You own or lease a property for business operations
What does CGL insurance cover?
Bodily injury
Property damage
Product liability
Tenant’s legal liability
Personal and advertising injury liability
Why do I need commercial general liability insurance?
General liability insurance not only protects you financially from claims or property damage and bodily injury, but it can help sustain your reputation if a third party decides to sue. Lawsuits can destroy the trust between you and your clients, but having an insurance policy can lead to fast settlements and get your business back to normal. A CGL certificate is also often a requirement at different venues (eg. hotels, arenas, conference halls) for events, such as tradeshows, weddings, or conferences.
Some possible general liability claims you could face include:
- Slip and fall accidents in a store, restaurant, or office
- Vehicle damage in a repair shop
- Food poisoning in a restaurant
- Fire damage in a commercially leased space
- Reputational harm of a competitor on social media
- Copyright infringement of an unlicensed photo on social media
How much does commercial general liability insurance cost?
Most commercial general liability insurance policies cost about $500 annually for small to medium-sized businesses, but it can vary according to the amount of coverage you want.
compare quotesHow small businesses can avoid a commercial general liability claim
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.
Factors that go into your commercial general liability quote
Although every business comes with risks, some businesses present higher risk levels than others. Generally, the more risk your industry brings, the more expensive your quote will be. With higher risk comes a higher likelihood of a claim. So if you work in construction, expect to pay higher premiums than someone who works in an office, as the possibility of property damage or bodily injury is much higher.
If you have more experience, your CGL quote could be cheaper because you’re less likely to make a mistake. Although a client can make a claim against something that was out of your control, such as falling down your stairs, having more experience shows insurers you are more capable of performing your day-to-day operations without issues.
As an employer, you could be responsible for the general liability claims against your business because of your employee’s actions. When your business expands and your staff grows, so does your likelihood of a claim. For instance, having more employees means that more people could potentially badmouth your clients on social media, resulting in a lawsuit for advertising injury. Therefore, having more employees increases the cost of your CGL insurance.
A high revenue shows your insurer there is more at stake if a claim is made, thus increasing the cost of your CGL policy. Lawyers see dollar signs for their clients with profitable businesses, so third parties can ask for more in compensatory damages, knowing the business revenue will sustain the payout. So be sure to buy an adequate amount of coverage.
Get a free commercial general liability insurance quote.
Our qualified brokers are standing by to help you craft the right CGL policy to suit your needs. Request a free quote and consultation today.
Frequently asked CGL insurance questions
What doesn’t commercial general liability cover?
Although CGL insurance covers a broad spectrum of liability claims, most policies will not protect you from lawsuits of intentional criminal acts, patent infringement, and contractual liability. Lawsuits due to professional advice or services are also not covered with general liability insurance, as you would need to purchase professional liability insurance.
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.
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.
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.
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.