Commercial General Liability Insurance
Commercial general liability insurance is sometimes called CGL and essential to your business, and also to yourself if you are a sole proprietor or in a partnership. This insurance coverage provides protections against financial loss incurred by litigation due to property damage, bodily injuries or death caused by your services, operations or your employees. Lawsuits happen against businesses all the time. Slip and fall incidents at business premises, such as restaurants, offices and retail stores, are often brought to a lawsuit.
Whether you are legally liable or not, the insurer of commercial general liability insurance would have duty to defend you against the lawsuit. The defence cost is usually included with the insurance policy. CGL would be first defence for your business and yourself. That is why CGL is a most common risk management tool against liability suits. It is good idea to check a website of Insurance Bureau of Canada for reference.
Often your landlord, government, business partners and buyers such as Amazon, Alibaba, eBay, Etsy, Rakuten or Walmart require commercial general liability insurance.
When you are a tenant, your commercial general liability insurance coverage should be written on an “occurrence” form rather than a “claims made” form. In an occurrence form coverage is crystallized when the injury or damage takes place regardless of when the claim is made. As such, even if an insurance policy is not renewed following an accident, the policy continues to cover claims arising out of that accident.
In a claims made form, the policy covers claims first made during the policy period, regardless of when the accident or the injury or damage occurred. However, once the policy expires, if no claim was made, and the insurance company was not notified of a claim or of an incident that could result in a claim, the insurance company has no liability. However, there are types of industries where claims made coverage is the norm.
Product Liability (Third Party Liability) and Completed Operations
Commercial general liability insurance often includes product liability arising from all of products and all of your operations. On the other hand, you can exclude product liability or completed operation, and make the commercial general liability at premises only in order to save the premium but the coverage is very limited.
Components of Commercial General Liability Insurance
Most of Commercial General Liability insurance policy consists of 4 sections of coverage:
A. Bodily Injury and Property Damage Liability
B. Personal and Advertising Liability
C. Medical Payments
D. Tenants’ Legal Liability
Here are details;
Bodily Injury and Property Damage Liability
In the event that your business operations, your products or services, your employees or for that matter anything related to your business results in bodily injury to someone, or someone’s property damage, your business or you could be legally liable. In that instance, the business is required to pay the damaged or injured third-party compensation.
There are following exclusions of commercial general liability insurance but not limited to:
– Expected or Intended Injury
– Contractual Liability
– Workers’ Compensation and Similar Laws
– Employer’s Liability
– Aircraft or Watercraft
– Damage to your Property / Work / Product
– Impaired Property or Property not physically insured
– Recall of Products, Work or Impaired Property
– Violation of Any Law as to Age
– Electric Data
– Personal and Advertising Injury
– Personal Services
– Asbestos, Fungi or Spores
– Nuclear Energy Liability, Pollution, Terrorism, War Risks
– Waiver of subrogation to the landlord
Some of the exclusions could be covered with endorsements.
Personal and Advertising Injury Liability
This coverage protects you against lawsuits arising from your or your employees’ actions causing damage to reputation or character of a third party.
These personal and advertising injury usually means injury, including consequential bodily injury, arising our of more of the following offenses:
- False arrest, detention or imprisonment
- Malicious prosecution
- The wrongful eviction from, wrongful entry into, or invasion of the right of private occupancy of a room, dwelling or premises that a person occupies, committed by or on behalf of its owner, landlord or lessor
- Oral or written publication, in any manner, of material that slanders or libels a person or organization or disparages a person’s or organization’s goods, products or services
- Oral or written publication, in any manner, of material that violates a person’s right of privacy
- The use of another’s advertising idea in your advertisement
- Infringing upon another’s copyright, trade dress or slogan in your advertisement
As you can see this coverage is important to protect your business and your assets.
The insurer pays medical expenses of a third party for bodily injury caused by an accident due to your operations. The payment would be made regardless of fault. The medical expenses would mitigate the possibility of legal liability of the insured.
Tenants’ Legal Liability
When you are leasing or renting premises from the landlord, you are responsible for property damage to the landlords’ property. The tenants’ legal liability coverage defends an action against you to recover the cost of repair or replacement of the property. This applies only to property damage to premises of others rented or occupied by you.
The limit of coverage corresponds to space of premises you lease or rent. For example, if the space you lease were 500 sq./ft., the limit would not be over $1,000,000 because then replacement cost of the space would be $2,000 per square feet, which would not be realistic.
Sometimes your landlord, clients, business partners or the government require commercial general liability insurance. We will find the best coverage needed for your business. You may need liability insurance certificate to proceed with your business, let us issue it in a timely manner. We offer coverage to the businesses in Greater Toronto Area (GTA), Ontario.
We work for you to find the best coverage with best values. We do not give up. Wherever is your business in Ontario you can count on us.