Many factors contribute to the success of a business. As a business owner, you know what it takes. Hard work, focus, planning, and great staff are a few important factors. When it comes to insurance, you want to be sure your business is properly protected. Commercial general liability insurance is designed to protect all of your company’s assets.
Commercial general liability (CGL) insurance is a type of business liability insurance policy that provides coverage for your business against claims for bodily injury and property damage to third parties arising from your premises, operations, products and completed operations. When considering business coverage such as commercial general liability insurance, Ontario business owners should note that CGL is a broad type of insurance policy that varies between types of businesses. It covers general liability risks associated with your business, meaning your commercial general liability insurance company would provide funds to cover legal defence fees, settlement costs, medical expenses and other related costs should you be required to defend yourself in court against claims that you or your business caused third-party injuries or property damage.
If you’re an owner of a business that’s small or large, you are always at risk in some way or another. Without commercial general liability insurance, Ontario business owners have no coverage should a lawsuit claim be filed against them. This can have a very heavy financial toll on your business. This type of policy can also protect you from legal fees so that your business and reputation remain safe and flourishing.
When considering business policies such as commercial general liability insurance, Ontario business owners aren't always certain of what exactly it's for and what it covers. Essentially, a CGL policy exists to offer financial protection against unexpected expenses that arise due to liability situations such as:
A common example of a commercial general liability insurance claim is a scenario in which a customer or client enters your place of business and slips on a wet floor that was just mopped, suffering an injury. That customer could choose to sue your business to recoup medical expenses and compensatory damages, and the commercial general liability portion of your business insurance policy would provide you with funds to cover related costs, up to the coverage limit on your policy.
When it comes to coverage limits for commercial general liability insurance, Ontario residents are sometimes surprised to learn that $2 million is the minimum amount that is recommended—and in most cases, it's a good idea to have considerably higher coverage limits. That may seem unnecessary, especially if you've never been involved in a lawsuit before, but the truth is that liability expenses can easily exceed $2 million and often do. Your insurance carrier will only provide funds up to the coverage limit, so if your costs exceed that limit, you'll be forced to pay out of pocket for the remainder.
Since it's not costly to increase coverage limits for commercial general liability insurance, Ontario business owners should seriously consider including additional coverage on their policy. It's a sound investment that protects your business success long-term. Certain professions with a higher level of risk exposure, such as excavation or demolition operations, or sewer and water contractors, need at least $5 million in CGL insurance coverage.
Imagine the impact if you could not operate your business after a loss such as a fire. How would you carry on? How would you manage to continue to look after your customers? How would you manage if there was a drop in income due to the loss? This is when it can be important to have Business Interruption insurance. Business Interruption insurance can help to cover these impacts. Property insurance coverage would indemnify you for insured direct damage claims to contents, stock, equipment, and buildings.
Errors and omissions (E&O) liability insurance or professional liability insurance is specialized liability coverage required by companies that provide professional services, such as accountants, engineers, marketing professionals, consultants, and IT services. Despite the best intentions of professionals in these fields, an error or omission in the performance of services could cause financial losses to customers. Liability arising from a claim resulting from a professional service is excluded under the standard CGL insurance policy. The legal expenses to defend against the alleged failure to provide adequate professional services can be as significant as the actual claim. Coverage for legal costs for defending suits related to allegations of mistakes, negligence, missed deadlines and more is available under an errors and omissions or professional liability policy.
On a rainy day, an umbrella is definitely handy. It provides extra protection from a storm. In terms of insurance, that’s what commercial umbrella or excess liability insurance does. It provides extra coverage by increasing a company’s liability limit. An umbrella policy adds to the limit of an underlying commercial general liability policy. The liability portion of the underlying policy is the first to respond in the event of a loss. A commercial umbrella or excess liability insurance policy responds to eligible losses after the primary or underlying liability insurance limit has been reached.
At Morison Insurance we can take care of all your business insurance needs. An experienced commercial insurance broker knows how to identify and manage many of the risk factors in your business and will translate that knowledge into an insurance package to meet your needs. Give the insurance experts at Morison Insurance a call at 1-800-463-8074 to find out more about what we can do for you and your business.
This content is written by our Morison Insurance team. It is provided for general information only. Insurance needs differ from person to person, and this article is therefore not a substitute for professional advice about your individual insurance needs which can be obtained by speaking to one of our brokers.