What Is Commercial General Liability Insurance Coverage?

Commercial General Liability (CGL) Insurance Definition:

A standard insurance policy is issued to businesses and organizations to protect them against liability claims for bodily injury (BI) and property damage (PD) arising out of premises, operations, products, and completed operations, as well as personal and advertising injury (PI) liability. The Commercial General Liability Insurance policy was introduced in 1986 and is often called a “comprehensive” general liability policy.

Why Is Commercial General Liability Insurance Needed?

Common law, which applies in all provinces in Canada except Quebec (where they operate under Civil Law), has established that business owners owe a duty of care to the public regardless of the type of business they operate. Unfortunately, accidents happen, and injured people or parties may allege the following three things:

  1. A duty of care was owed
  2. That duty of care was breached
  3. Damages and/or injuries were incurred

When the above conditions are met, parties and their lawyers often allege that a business has been negligent and must cover damages and/or medical expenses. Demands for compensation can be written and/or verbal and can be made by the injured party directly or by a lawyer representing the injured. A robust commercial general liability policy not only covers damages but can also cover legal costs, legal fees, and legal expenses, ensuring your business can defend itself adequately against claims.

This is commonly known as personal injury law. In this area of law, lawyers will typically work on a “contingent” basis, which means the injured party pays nothing upfront, and the lawyer only gets paid if they receive an award or settlement from the organization they allege is at fault.

What Is Covered By Commercial General Liability Insurance?

The typical commercial general liability policy contains numerous types of coverage, including:

  • Third-Party Bodily Injury: This means bodily harm, sickness, or disease, including death, that results from your business operations.

For example, a customer slips in your store and breaks their hip.

  • Third-Party Property Damage: Damage caused to the property of others.

For example, a contractor accidentally damages the building next to the one he is working on.

  • Products Liability: The liability for bodily injury (BI) or property damage (PD) incurred by a merchant or manufacturer as a consequence of some defect in the product sold or manufactured.

For example, a customer becomes sick after eating at a restaurant.

  • Completed Operations: Work of the insured that has been completed as called for in a contract, work completed at a single job site under a contract involving multiple job sites, or work that has been put to its intended use.

For example, a plumber installs a new toilet, which begins to leak and damages the room’s contents below.

  • Tenants Legal Liability: A tenant accepts responsibility for the damage they may cause to the building they rent or lease from a landlord.

For example, an insurance company employee leaves a candle burning at their desk overnight, which catches fire and burns down the entire office tower.

The above is only a brief summary of some of the main sections of coverage found in the typical Commercial General Liability Insurance policy. 

Exclusions and Clarifications

Exclusions Specific to CGL

Commercial general liability coverage is known to exclude liability for financial loss associated with services provided to clients for a fee, making professional liability insurance a necessary complement for those in advisory or service-based professions. It is broad in scope and designed to cover slips and falls, product liability issues, accidental damage by a business tenant to a leased location, etc.

The Relationship Between CGL and Errors & Omissions (E&O) Insurance

Meanwhile, Errors & omissions insurance, also known as E&O or professional indemnity, is designed to protect organizations and individuals. It covers them against liability for financial losses that their clients might claim. These claims could be based on the advice and/or services provided, or not provided, to clients who have compensated them for their advice and/or services.

Although general liability insurance policies cover bodily injuries sustained or property damages resulting from professional services performed, these are mostly excluded with E&O insurance – except for a few professions such as engineers and architects.

Obtaining Commercial General Liability Insurance

For a hassle-free CGL policy quote, click here to request a quote and let our expert brokers handle everything else. Once your quote request is received some or all of the additional information below will be needed to help us better understand the scope of your business’s operations and the extent of coverage required to protect your enterprise effectively:

  1. Legal name of the organization applying for a commercial general liability insurance quote
  2. Full Mailing Address of the location being insured and the organization (if they differ, please provide both)
  3. How much commercial general liability insurance do you need ($1M-$5M)?
  4. Has your organization been in operation for at least 12 months? (Y/N)
  5. Does your organization have any of the following in the USA (Y/N)
    • Premises /Operations
    • Subsidiaries
    • Employees
  6. What are the organization’s fees/revenues for their last complete financial year?
  7. Do all/100% of your organization’s fees/revenue emanate from within Canada? (Y/N)
    • If no, provide a percentage breakdown of fees/revenue between Canada, the USA, and elsewhere.
  8. Are the premises or office buildings occupied by your organization (Y/N)
    • Solely as offices (or office/retail or office/residential mixed-use development)
    • Or as part of their private dwelling?
  9. Does your organization (Y/N)
    • manufacture or sell any physical products?
    • Undertake any manual work away from the Applicant’s premises?
    • Undertake any trackside work or safety signalling work for railways?
    • Undertake any airside work (at airports, etc)?
    • Undertake any offshore work?
  10. Is Office Contents and/or Business Interruption cover required?
    • If yes, the Sum Insured required in respect of Office Contents (up to $1,000,000)
  11. Warranty Questions:
    • Have any claims been made to the knowledge of your organization against your organization, any business predecessors, or any of the present or former partners and/or officers within the last five years? (Y/N)
    • Are you aware of any fact or circumstance that could give rise to a liability claim against the Applicant, any business predecessors, or any of the present or former partners and/or officers? (Y/N)
    • To the knowledge of any Partner, Executive Officer, Director or Employee, has any company declined or terminated the insurance for the Applicant, any business predecessors or any present or former partners and/or officers? (Y/N)
    • Has the organization ever been refused insurance? (Y/N)

Click here to get your quote started today and our experienced commercial insurance experts will provide you with the insurance options you need.

Get Aligned With Commercial General Liability Insurance Coverage with ALIGNED Insurance

Ensure your business is protected against a broad spectrum of risks with an insurance solution tailored to your business needs. ALIGNED Insurance stands at the forefront of providing customized Commercial General Liability Insurance, expertly tailored to protect against the broad spectrum of risks businesses encounter daily.

At ALIGNED Insurance, we specialize in helping companies like yours get comprehensive insurance tailored to their unique needs. To learn more about how CGL coverage can protect your business, please contact us and speak with an ALIGNED insurance advocate. Or, get your quote today!

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