Is there a difference between CGL & umbrella insurance?
Yes, there is. Doing upfront research and working with knowledgeable insurance experts puts you in control when you buy or renew commercial insurance. ALIGNED insurance brokers understand the difference between CGL & Umbrella insurance in Canada. They also know what questions to ask to ensure that the coverage you buy directly aligns with the specific risks – hidden and obvious – that your business faces. When you work with ALIGNED, you get the insights you need to make informed business insurance decisions.
First things first. Here’s what CGL aka commercial general liability does…
It’s important to understand that in every single Canadian province – with the exception of Quebec – business owners owe what’s known as a duty of care to members of the general public. This means that if and when a liability claims situation should occur, a claim may be made by an injured individual or group.
More specifically, an injured party may allege damages or injuries were incurred after an owed duty of care was breached. Any part of this allegation – be it incurred damages, breached duty of care or owed duty of care – may lead to a lawsuit. This means that your business may be sued for negligence and compensation for damages may be sought.
This is where commercial general liability steps up. Commercial General Liability – aka CGL – protects against liability claims for bodily injury and property damage liability claims against your completed operations, products, premises, operations, as well as advertising and personal injury liability.
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…and what umbrella insurance in Canada does…
Meanwhile, umbrella liability insurance delivers an extra layer of coverage to Canadian businesses. This form of liability insurance is over and above commercial general liability policies.
The unique thing about umbrella liability insurance is the fact that it’s designed to activate exactly when your primary general liability coverage is exhausted.
From the ground up, umbrella liability insurance is built to protect your assets. That’s why adding umbrella liability insurance is also known as excess liability and can be added in layers to your existing coverage. Much like packing an umbrella when showers are forecast, this form of excess insurance provides additional spokes of protection that are automatically triggered.
So, the key difference between CGL & umbrella insurance ultimately boils down to…
CGL provides the bodily injury and property damage liability essentials and umbrella insurance provides excess protection against catastrophic losses.
It’s also important to note that umbrella liability policies are generally written over various primary liability policies (i.e. aircraft, CGL, employers, business auto).
We know how vitally important it is to make informed buying decisions. That’s why we deliver insights like these. Every day, we help people get aligned with the best options and value in Canadian commercial insurance coverages.
Sources: 1 ALIGNED Insurance: CGL insurance explained; 2 ALIGNED Insurance: General insurance; 3 ALIGNED Insurance: How umbrella liability fills the gap; 4 ALIGNED Insurance: Umbrella liability insurance explained
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