Commercial General Liability Insurance Protect your business
Commercial General Liability (CGL) insurance protects against claims for injury, property damage, and personal injury related to business activities.
It is essential for various sectors, including retail, food and beverage, services, construction, manufacturing, technology, healthcare, non-profit organizations, real estate, transportation, and events. Regardless of size, all companies, including small home-based businesses, can benefit from a GCL. It's a crucial risk management tool that offers essential financial protection in today's business environment.
- Type of industry (e.g. construction, retail, professional services)
- Level of risk associated with core business
- Products or services offered
- Annual sales
- Number of employees
- Value of assets
- Head office and branch locations
- Areas of operation (urban, rural, international)
- Local and provincial regulations
- Number and severity of previous claims
- Years of industry experience
- Risk prevention measures in place
- Amount of cover per claim
- Overall annual limit
- Deductibles selected
- Types of risks covered (bodily injury, property damage, etc.)
- Exclusions and coverage extensions selected
- Optional coverages (e.g. cyber risks)
- Number of visitors or customers on site
- Participation in public events
- Company media visibility
- Nature of contracts with customers and suppliers
- Use of subcontractors
- Contractual insurance requirements
- Level of employee training
- Professional or industry certifications
- Continuing education programs
- Safety systems in place
- Risk management policies and procedures
- Compliance with industry standards
Common General Liability (GL) claims in Canada
Frequency : Very high (about 30% of claims) Example : Customer slips on a wet floor in a store Average cost : $20,000 to $50,000
Frequency : High (approximately 25% of claims)
Example : An employee accidentally damages a customer's equipment during a service call.
Average cost : $10,000 to $30,000
Frequency : Moderate to high (approximately 15% of claims)
Example : Defective product causes injury to consumer
Average cost : $50,000 to $200,000 (can be much higher in some cases)
Frequency : Increasing (about 10% of claims)
Example : An advertising campaign found to defame a competitor
Average cost : $25,000 to $100,000
Frequency : Moderate (about 8% of claims)
Example : An employee has an accident with his vehicle while running an errand for the company.
Average cost : $15,000 to $40,000
Frequency : Low but increasing (about 5% of claims)
Example : Accidental contamination of a waterway by chemicals
Average cost : $100,000 to several million (can be very high)
Frequency : Low (about 4% of claims)
Example : Employee injured at an off-site corporate event
Average cost : $30,000 to $75,000
Frequency : Rapidly increasing (about 3% of claims, but rising rapidly)
Example : Accidental disclosure of customers' personal information
Average cost : $50,000 to $200,000 (can be much higher in severe cases)
5 tips to reduce the cost of your general liability (GL) insurance
- Regularly assess your company's risks
- Develop safety procedures and train your employees
- Document your prevention efforts for your general liability insurer.
- Increase your deductible to lower your liability premiums
- Make sure you have the funds to cover the deductible in the event of an E&O claim
Combine your general liability insurance with other coverages
- Evaluate your liability insurance needs each year
- Adjust your GL policy as your business evolves
- Avoid over- or under-insuring your liability coverage
- Install modern security systems to reduce risks
- Offer risk prevention training to your employees
- Maintain safety certifications to optimize your GL premium
General liability (GL) insurance in Quebec and Canada generally includes product liability coverage, but it's important to understand its scope and limitations :
- Standard CGL coverage : Your CGL insurance typically covers claims for bodily injury or property damage caused by your products to third parties.
- Scope of protection : This coverage applies to cases where defective products, inadequate labelling, or insufficient operating instructions have caused damage.
- Important distinction : Liability insurance generally does not cover the costs associated with product recalls. Product recall insurance is a separate policy.
- Product recall insurance : This separate coverage pays for the costs of withdrawing defective or dangerous products from the market.
- Limits and exclusions : Check the specific limits of your product liability policy and discuss potential exclusions with your insurance broker.
- Risk management : Implement rigorous quality control and documentation procedures to strengthen your position in the event of a product-related claim.
It's essential to consult your insurance broker to assess your specific product liability needs as part of your CGL coverage. In addition, discuss the suitability of separate product recall insurance for your Canadian business based on your activities and the risks associated with your products.
The geographic coverage of your general liability (GL) insurance can vary considerably depending on your policy. While many standard CGL policies in Quebec cover incidents in Canada and the U.S., consulting your insurance broker before undertaking business activities outside the country is crucial.
Here are some essential points to keep in mind :
- Mandatory validation : Before doing business abroad, contact your insurance broker to verify the exact scope of your current CGL coverage.
- Limited coverage : Your standard policy may not offer adequate protection for international operations.
- Possible extensions : You may need a specific extension to your existing CGL policy for worldwide coverage.
- Separate policies : A separate international liability policy may sometimes be required.
- Specific risks : Foreign operations may present unique risks not covered by your standard Quebec CGL policy.
Your Quebec insurance broker is best positioned to assess your specific international coverage needs and recommend any adjustments to your CGL policy. Don't hesitate to consult your broker well before any business activity outside Canada to ensure optimum protection for your Quebec business.
In case of an incident in Quebec, inform your insurance broker immediately. Document all details of the incident and do not admit liability. Your insurance company will handle the investigation, negotiation and, if necessary, legal defence. In Quebec, the limitation period for civil liability claims is 3 years. Carefully follow your insurer's and broker's instructions for handling claims.
Common exclusions from a liability policy in Canada include intentional damage, professional liability (covered by errors and omissions insurance), asbestos or pollution claims and cyber risks. Read your liability insurance contract carefully and discuss exclusions with your insurance broker.
To reduce your CGL insurance premiums in Quebec, implement a risk management program, opt for a higher deductible, consolidate your commercial insurance policies, and invest in safety training and risk prevention. Consult your insurance broker for personalized advice.
While general liability insurance is not legally required for all Canadian businesses, many commercial contracts, leases, and clients require it. In Quebec, certain regulated professions may need liability insurance as a condition of practice. Check the specific requirements for your industry.
In Canada, general liability insurance covers general risks related to your operations, while professional liability (or E&O) insurance covers errors or omissions in providing your professional services. Many Canadian businesses require both types of insurance coverage for complete protection.
Although the basic principles of liability insurance are similar, Quebec follows the Civil Code, while the rest of Canada uses the Common Law system. This can affect the interpretation of insurance contracts and the handling of civil liability claims. It is crucial to consult your insurance broker at Covalen with insurance specifics across the different provinces.
CGL insurance in Quebec protects your business against claims for bodily injury, property damage and personal injury resulting from your operations, products or services. This commercial insurance coverage is essential to protect your Quebec company's assets and reputation in the event of a lawsuit.
The cost of general liability insurance in Quebec varies according to the size of the company, the sector of activity and the level of risk. Liability insurance premiums can range from a few hundred to several thousand dollars annually. A low-risk Quebec SME might pay less, while a large company in a high-risk sector would pay more for its E&O coverage.