What is Commercial General Liability insurance?
Commercial general liability insurance equips your business with financial coverage in the event of lawsuits, and includes the cost of legal fees and third-party claims for injuries and property damage.
Whether you own a restaurant, a construction firm, or a retail shop, accidents can happen and can impact customers, contractors, and third-party vendors. Falling racks, faulty electricals and even wet floors or icy stairs can cause personal injuries like slips and falls. Your business could be liable for any of these accidents.
Depending on your business, you may also consider additional and specialized liability coverage for property, fire, liquor, earthquake, theft, and business interruption.
The two basic forms of commercial general liability coverage are:
Occurrence
Protects a business from any covered incident that occurs during the policy period, regardless of when a claim is reported.
Example: Sam, a business owner, purchased an occurrence policy in 2010, but changed his coverage in 2015. Sam later got sued in 2017 for an incident that happened in 2012. Sam is covered because he had an occurrence policy at the time of the incident.
Claims-Made
Provides coverage for claims that occur and are reported within a specified time-period, as determined by the policy.
Example: Sam, a business owner, purchased a claims-made policy in 2019 and cancels it in 2021. In 2022, Sam is sued for an incident that occurred in 2020. Since the claim-made policy is no longer in effect (and no extension was purchased), Sam is liable and must pay for damages out of pocket.
What is covered under a Commercial General Liability Policy?
Business liability insurance has different levels of coverage. Depending on your policy, you may be covered for:
- Property damage, as a result of your premises, products or operations
- Personal and advertising injury – protects against offences made by you or your staff, such as slander, libel, or copyright infringement
- Medical expenses, as a result of bodily or physical injury on your premises
- Legal costs to defend or settle claims
- Operations liability – covers property damage or bodily injury sustained by those on your premises
- Additional insured – coverage for written contracts, permits or agreements
Talk to your broker to ensure you have insurance coverage that is tailored to your needs.
Why is Commercial General Liability important?
Comprehensive general liability insurance can help protect your business from the financial impact of a lawsuit. As you grow and invest in the future of your business, you want to focus on establishing your reputation and managing your operations, not on worrying about paying for an expensive lawsuit.
Work with an experienced insurance broker at BrokerLink
BrokerLink insurance advisors have the expertise to help you manage potential business risk and ensure you have the right coverage in place. And, in the event of a claim, they will offer guidance to help your business recover from property damage or personal injury claims.
Contact one of our experienced commercial advisors today to learn more about commercial general liability coverage and to get an insurance policy tailored to the unique needs of your business.
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Commercial General Liability Insurance FAQs
What is the difference between Commercial General Liability and Professional Liability?
Commercial general liability can help protect your business against claims such as property damage, personal injury, and the legal costs needed to defend and settle claims. Alternatively, Professional Liability coverage, or Errors and Omissions Insurance, helps to protect those who offer professional services, like a doctor or lawyer, from when a client holds them or their company responsible for a service they provided, or failed to provide, that did not have the expected or promised results.
For example: if you are an accountant that neglected to file a required form when filing your client’s business taxes, you could be sued for the financial loss incurred by your client after CRA performs an audit.
Does Commercial General Liability cover directors and officers?
Directors and officers (D&O) liability insurance protects corporate leaders from financial loss due to allegations and lawsuits during their tenure. If your business is a non-profit or is governed by a board of directors, then you may consider Directors and Officers coverage, to ensure you have the best coverage for your needs. Commercial General Liability coverage does not usually cover directors and officers. To gain a thorough understanding of your policy, talk to your insurance broker.
