Public liability insurance, sometimes called business liability insurance, is a key component of most business insurance policies. It covers legal costs and settlement expenses if a business is sued for third-party bodily injury, third-party property damage, or advertising injury — providing financial assistance for legal mediation, attorney fees, court fees, and settlement costs.
Litigation costs can easily exceed $1 million; most businesses cannot absorb those costs out of pocket. Even if you did nothing wrong, you can still be forced to defend yourself in court.
Coverage depends on your provider and policy, but standard coverage always includes the three main types of third-party claims. Additional endorsements such as Completed Operations and Tenant Legal Liability are also available.
Third-Party Bodily Injury
Slip and fall, wet floor, icy walkway; compensation for medical expenses, pain and suffering, and loss of income.
Third-Party Property Damage
Damaged property and claims for repair or replacement; for example, a handyman scraping a ladder against a client's costly painting.
Personal and Advertising Injury
Libel, slander, false advertising, violation of privacy, and reputational harm.
Tell us about your insurance needs and current coverage.
We shop multiple trusted insurers to find coverage that fits your needs and budget.
Review your options, choose what fits your needs, and get your policy started, often the same day.
Serving all of Ontario, our brokers are available in every region. Find the closest office to you.
Don’t see your city? Call us to find
the nearest broker to you
Our licensed brokers help clients throughout Ontario — virtually, by phone, or in person.
Who Needs Public Liability Insurance in Ontario?
Every public-facing business needs the protection of public liability insurance. Ontario business owners sometimes assume it's only necessary if they have a commercial business location that is open to the public, but that's not the case. Public liability insurance is necessary if:
Is Public Liability Insurance Legally Mandatory?
In Canada, public liability insurance is not mandatory coverage. In fact, that's true of most types of business insurance, with a couple of obvious exceptions, such as commercial auto insurance. But just because the government doesn't legally require you to have public liability insurance, that doesn't mean you can effectively operate your business without it.
The reason public liability insurance is so important is that the costs of litigation can easily exceed a million dollars and continue to rise from there, and most business owners simply can't afford to pay extremely high costs out of their own pocket and still keep their business up and running. Keep in mind that even if you or your employees did nothing wrong, you can still be accused of causing third-party injury or damage and be forced to defend yourself in court. But you also can't prevent every single mishap or error that could lead to a lawsuit, no matter how careful you are and how cautiously you operate your business.
When it comes to public liability insurance, Ontario business owners should be aware that it's not all about the ability to receive compensation in the event of a lawsuit. Other parties will sometimes refuse to do business with a company that doesn't have public liability insurance. For example, if you need to lease a commercial space for your business, the leasing company may refuse to lease to you if you can't or won't produce a certificate of insurance proving you have adequate public liability coverage, along with other types of business insurance. Other parties in the supply chain or even clients may also refuse to enter into a contract with you if you don't have the right types and amounts of commercial insurance, and that means you would be forced to walk away from contracts or struggle to get what you need to keep your business operating smoothly.
Is There a Difference Between Public Liability Insurance and Commercial General Liability Insurance?
The exact meaning of the terms "public liability" and "commercial general liability" can vary based on the country and, to some extent, the insurance provider. In Canada, commercial general liability (CGL) is the more common term for this type of coverage, and public liability is often considered essentially the same as CGL insurance. However, some insurance companies interpret the terms slightly differently and consider public liability insurance to be a type of commercial general liability insurance, with the main difference being that commercial general liability insurance has a broader scope of coverage with higher limits and a greater range of possible endorsements.
The brokers at Morison Insurance have the experience and expertise necessary to navigate public liability insurance in Ontario and other types of commercial insurance to ensure that you get the coverage that is best suited to your business. Your business is unique, and we understand that your insurance coverage must be uniquely tailored to address the perils you are most likely to face in your business operations. Give us a call if you are interested in finding out more about public liability insurance, CGL coverage and the right options for your business.
What Is Not Covered By Public Liability Insurance?
Because public liability insurance is a type of liability insurance, it does not cover any expenses or scenarios unrelated to liability. If your own commercial property were damaged or destroyed by something like a natural disaster or a fire, for example, you would need commercial property insurance coverage to get compensation for repair, restoration, and replacement costs. It also will not cover expenses associated with injury to employees or the policyholder. Public liability insurance applies specifically to litigation related to the perils discussed above. It does not apply to:
What Determines the Premiums for Public Liability Insurance?
To provide a public liability insurance quote, an insurance carrier first needs to gather a variety of information about you and your business to carry out an assessment of your risk exposure, or how likely you are to need to file a claim. For public liability insurance, Ontario insurance companies look at a wide range of factors such as:
Can Additional Coverage Be Added to Public Liability Insurance?
What exactly is covered by public liability insurance depends on the coverages offered by your insurance provider and how your particular policy is written. While public liability insurance always covers third-party bodily injury, third-party property damage and personal or advertising injury, it can also potentially offer you other types of coverage as well, such as completed operations insurance and tenant legal liability insurance. While every type of public-facing business needs standard public liability coverages, the following coverages are beneficial to specific types of businesses.
If you are in the construction or renovation industry, whether you're a general contractor or a specialized tradesperson, completed operations coverage is a highly recommended addition to your public liability insurance in Ontario. Unlike the standard public liability coverage, completed operations applies to a situation in which the results of your work allegedly cause third-party property damage or bodily injury after the project is complete for a certain period of time. For example, if you were hired to build a deck at a residential property and a couple of years later the deck collapsed, causing injuries to several people and damage to the house, the homeowner could allege that it was due to faulty work on your part and bring a lawsuit against you. With completed operations coverage, you could then file a claim to avoid paying legal and settlement costs out of pocket.
If your business leases or rents a commercial space, it's important to have tenant legal liability coverage on your public liability insurance in Ontario. If the rented or leased property is damaged by something like a fire or sewer backup, the property owner could potentially allege that your business was responsible for causing the fire and take you to court for the cost of restoring the building to its former condition. Tenant's legal liability insurance would cover your legal defence costs up to the coverage limits on your policy.
