Commercial General Liability Insurance Ontario
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In Canada, around 90% of all startups fail. This statistic may sound like an exaggeration, but unfortunately the reality of running and getting a startup off the ground to become some huge global success is rather small. Much of this is due to poor management, inadequate talent, and, ultimately, lack of risk mitigation. Purchasing business insurance in Ontario is a great inclusion to an overall risk management strategy, but too many small businesses in the country believe they do not need coverage.
Who Needs CGL Insurance in Ontario?
Commercial general liability insurance isn’t for a specific industry. All Ontario business owners in all sectors benefit from this type of commercial insurance. You may need to get CGL if you:
- You conduct business on behalf of your clients.
- You are frequently in personal contact with customers.
- Your business property is owned or leased.
Business Insurance in Ontario
In Ontario, there are many types of business insurance. We will describe the many popular forms of business insurance that exist below:
Commercial General Liability Insurance:
This type of insurance covers the risk of injury to someone or damage to their property from your business operations. Generally, it can cover costs to defend yourself against any lawsuits that are brought against you by a third-party.
Workers Compensation Insurance:
This type of insurance covers medical costs and income replacement benefits for employees injured on the job. It also provides death benefits for dependents in case an employee dies while working for you. This is particularly prominent in the construction industry.
Professional Liability Insurance:
This type of insurance covers claims made against you by clients or customers who suffer financial losses due to your professional services or advice, failure to provide promised services, or negligence in a professional setting.
Insurance for your business is important because it protects you and your employees in case something happens to the property, or if someone gets hurt on the job. Think of it like a fallback plan – a safety net.
Certain liability coverage also provides protection against lawsuits and other legal issues that may arise from doing business in Ontario.
What is Business Liability?
The legal obligation to a third party for an alleged wrongdoing is called liability. It can include alleged damage to property or injury to people.
Every business, no matter how many people it employs, is at risk of legal liability. Even new media professionals face liability risks. Consider insurance your business’s last line of defense, when all else fails.
The risk exposures of diverse types of businesses are different, so the type of insurance they may need to protect themselves may look different. For example, a hair salon will have different risks than a computer company.
The commonality between the two is that they both require business liability insurance to be adequately protected. What form that takes may vary. Even if there are no violations, legal problems can still arise if a client believes or alleges a mistake has been made. CGL coverage helps to protect against losses that may result from a lawsuit.
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What is Commercial General Liability Insurance?
Commercial general liability (CGL) is an insurance policy that covers third-party bodily injuries and property damage caused by the business’s operations, products, or injuries that happen on its premises.
Commercial general liability insurance is considered a type of business insurance, although it won’t cover every liability risk that there is. For full, all-encompassing coverage, you may need to assess the benefits of other coverage opportunities. To note, CGL won’t cover professional liability insurance, and vice versa. The difference between commercial general liability and professional liability is worth noting, to ensure you have the right protection – and enough of it.
CGL insurance usually covers your business for compensatory damages and legal defense costs.
Who Needs Commercial General Liability Insurance in Ontario?
There is no legal obligation for businesses to carry commercial general liability insurance in Ontario.
Commercial general liability insurance in Ontario is designed to protect small business owners against the costs of lawsuits and other liability claims. Even without it being required, it is still very highly recommended. It may be the very thing that keeps your business afloat, in spite of a loss.
It’s not just for big companies. If you run a small business, then you should consider commercial general liability insurance to protect your company against potential lawsuits or other claims.
Every business has a responsibility to its clients and to the overall public. While injuries and accidents do happen, you will want CGL coverage to support you in conditions in which responsibility of care becomes owed after an injury.
A common claims scenario, which shows one of the benefits of CGL coverage, is a slip and fall accident. In the occasion that a slip and fall accident happens to your property, because of an improperly shoveled sidewalk or a buildup of ice at some point of the winter, you can be protected. While it may seem insignificant, slip-and-fall injury payouts can be awarded up to a maximum of over $400,000.
How Does Commercial General Liability Insurance Work in Ontario?
Ontario commercial general liability insurance covers all expenses when a covered claim is filed against your company. The insurance company would then take care of all legal fees such as defense costs and settlements.
What Does Commercial General Liability Insurance in Ontario Cover?
Bodily Injury
Your business could be sued if a customer suffers any bodily injury such as slipping or falling on your steps. Bodily injury liability assumes that the injury was caused by negligence.
Customers, vendors, employees, and maintenance personnel can file bodily injury claims against you.
Your business may be required to pay compensation for medical bills, lost wages, pain, and suffering.
CGL coverage allows you to simply file a claim with the insurer if you are facing a third-party claim. All legal costs would be covered.
Property Damage
It is possible that you could be legally held responsible for the damage done to property belonging to third parties. This could lead you to pay expensive legal fees.
This could also adversely affect your clientele’s reputation. CGL insurance protects your business from third-party damage to your property or your business.
Product Liability
Product liability is a policy that protects you against any property damage or injury caused by the sale of a product or service.
Personal and Advertising Injury Liability
Insurance providers who provide commercial general liability typically include personal and advertising injury claims because it protects the business from claims of libel and slander, as well as privacy violations, intellectual propriety infringement, and damages related to advertising.
Tenant’s Legal Liability
The tenant’s legal liability or commercial tenant insurance protects you against any risk related to operating on leased premises.
Your general liability insurance will cover damage to rental properties caused by you or your workers. This coverage is required by many property owners before you may rent out space for your business.
What is Not Covered by Commercial General Liability Insurance in Ontario?
- Intentional criminal activity
- Motor vehicles
- Contractual liability
- Negligence claims unrelated to bodily injury or property damage
- Patent infringement
- The company’s property damage
How Much Commercial General Liability Insurance Do I Need in Ontario?
The amount of coverage you need to get for your business is determined only after you evaluate a few business factors.
You do not want to make the mistake of overpaying for the coverage your business does not need, nor do you want to risk being underinsured and financially exposed.
Here are some factors you should consider before buying commercial general liability insurance in Ontario:
- The frequency of lawsuits in your industry
- Cost of lawsuits in your industry
- Your annual revenue
- Your clientele base
- If you operate on worksites
- How often do clients, vendors, and the public visit your office or business
- The number of employees does your company have
How to Avoid a Commercial General Liability Insurance Claim?
- Avoiding slip and fall accidents – To make sure no one files a slip and fall claim in your business, make sure that people are aware of any hazards in the property. Use signs or cones that indicate anything that may cause an accident like a wet floor. You can also install nonslip rug pads to reduce the chances of falling.
- Avoiding third-party property damage claims – Taking the necessary safety measures while working on a client’s property will lower the chances of an accident occurring.At the same time, when a client is in your place of business, ensure they always have their personal items on them so that they do not get lost or stolen, which could potentially result in a claim being filed against your business. Provide lockers or storage areas to further reduce this risk.
- Avoiding personal and advertising injury claims – Having a professional marketing team is great for your business, not only because it markets your services, but it can help you avoid advertising claims.You should also offer proper training for your employees to properly converse with customers and handle tricky situations.
- Avoiding products-completed operations claims – Proper safe testing of your products is not only good for your clients and business reputation, but it can also protect you from claims related to product liability.Make sure you also have a space for clients to submit their opinion about your product and make suggestions on how it could be better.And, as always, identify and analyze risks specific to your business and its operations. You never know what industry-specific threats may be most prevalent to you and your situation.
How Much Does Commercial General Liability Insurance Cost in Ontario?
The majority of commercial general liability insurance policies cost between $450 and $500 per annum for small or medium businesses in Canada requiring $2 million worth of coverage. Although, some policies cost over $1,000 a year.
The cost can vary depending on a variety of factors, including:
- What industry you are in: While every business has its own risks, some industries carry higher risk levels. The higher your business’s risk, the more you will pay for commercial general liability insurance policies.
- The number of employees in your business: having employees is a huge responsibility since you can be held liable for your employee’s actions. The more you grow your staff, the more you will have to pay for your CGL premium.
- Your revenue: having a successful business does not come cheap, having higher revenue means there is more to be lost when you make a claim which makes your insurer raise the cost of your commercial general liability insurance. Higher revenue makes third parties who raise claims ask for higher compensation because they know your business can afford it.
- Years of experience: the more experience your business has, the less chance there is of mistakes and therefore a claim. That is why your insurer tends to lower prices the longer you are operating.
How to Save Money on Commercial General Liability Insurance in Ontario:
Find a commercial general liability insurance broker in Ontario
Researching insurance companies in Ontario to find the best deal can be overwhelming and you may not be equipped with all the information needed to know what coverage you need.
That is why hiring a commercial general liability insurance broker would not only mean having that information but also years of experience that would benefit you in getting the right coverage for the best price.
Review your coverage each year
Your business needs and goals change every year, and with it changes your need for insurance.
That is why when it is time for your annual policy renewal, you need to review your policy and make sure you are not overpaying for coverage you do not need.
Look for discount opportunities
Many business owners do not know that simply asking your insurer for their available discount opportunities can save them a lot of money.
What Other Insurance Options Do You Need for Your Ontario Business?
Fully comprehensive business insurance does not just stop at CGL. For your business to have protection against the kind of risks that would pose a threat to its livelihood, consider the addition of the following policies:
- Business interruption insurance: If your company is forced to temporarily cease operations due to a fire, flood, or other natural disasters, business interruption insurance may cover your income loss.
- Auto insurance: Commercial vehicle insurance for company vehicles
- Professional liability insurance: Professionals, or those who offer a professional service/advice, should also consider professional liability insurance, also known as errors or omissions insurance. This covers them for their work mistakes.
FAQs: CGL Insurance in Ontario
A negligent act is anything that shows a lack of care in your place of business. Common examples of negligent acts include not clearing snow properly, and not paying attention to tripping or slipping hazards.
The three sections of commercial general liability are as follows: premises and operations exposure, products and completed operations exposure, and indirect/contingent exposure.
The most important thing to do when choosing Ontario general liability insurance is to shop around and see what each insurer offers.
Compare each policy’s limits and make sure the insurer you choose has excellent customer service so that you do not face any trouble in communication moving forward. Thankfully, EasyCover has a fast and efficient way to do this. Check out our quick, online quoting tool to get your free and easy CGL insurance quote.
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