Commercial general liability policies (CGL) have different levels of coverage, depending on what protection your business needs. That said, a typical CGL protects your company against a range of liabilities that in some way cause harm to a third-party because of your products, premises or operations. This protection enables you to continue normal operations while dealing with real or fraudulent claims against you. It also provides coverage for the cost of any legal actions taken against you—whether you are at fault or not. This includes legal fees and any settlements you have to pay out. The following is a detailed breakdown of what your commercial general liability insurance should cover:
- Bodily Injury Claims: This coverage protects you in the event a third-party is harmed while at your business and decides to sue you. For instance, say a customer shopping at your store slips and falls, breaking his or her leg, and takes legal action.
- Advertising Injury: This coverage safeguards against an advertisement or marketing campaign you use that results in libel, slander or disparagement towards a third-party, or infringes on a third-party's copyright.
- Personal Injury: Similar to advertising injury, this coverage protects your company in the event a third-party feels something your company has done is libelous or slanderous. For example, an employee makes a disparaging comment while using a company social media account.
- Property Damage: This coverage protects your company in the event a third-party's property is damaged because of your business operations. For instance, say you're hanging shelves in your boutique and the hammer goes through the wall, damaging your neighbour's store.
- Automatic Additional Insurance: This endorsement can be attached to your CGL policy. It automatically grants insured status to a person or organization that you are required by contract to add to your insurance policy. For instance, a product manufacturer may want the sellers of their products to be covered as additional insureds under the manufacturer's liability policy.
- Legal Defense Costs: This section of your CGL policy provides coverage for any legal costs or liability claims brought against your business. You're protected regardless of whether or not you're at fault.
- Medical Expenses: If someone is injured on your premises or by your products, this coverage protects you in the event you have to pay for their medical costs.
- Occupiers and Operations Liability: This section of your liability insurance policies provides coverage in the event a third-party experiences bodily injury and/or property damage in conjunction with your business operations.
- Products Liability: This coverage protects your company in case a third-party is physically harmed or has their property damaged as a result of a faulty product.
How Much Coverage Your Business Needs
Naturally, how much coverage your business needs depends largely on your distinct needs. At Krywolt Insurance, one of our dedicated brokers will be able to ascertain those needs and provide the best policy for you. That said, there are a couple primary factors that dictate the coverage needed by CGL insurance policies in Calgary.
- Perceived Risk: Essentially, this weighs the amount of risk associated with your business operations and functions. For example, a bookstore would likely need less coverage than a business that manufactures heavy machinery.
- Type of Product Manufactured: If you manufacture a dangerous product, you will likely need higher liability limits.
What's Not Covered by Commercial General Liability
As comprehensive as commercial general liability may be, there are risks that you are still not protected from. You may need to add additional coverages to your policy to adequately protect your business. Some coverages not included in a CGL policy include:
- Contractual Liability: Which is a transfer of risk that occurs when one party assumes liability on behalf of another via a contract.
- Intentional Criminal Acts: Knowingly breaking the law in any way means you will not be covered by insurance.
- Patent Infringement: Such as selling, importing, using or making a product that someone else holds a patent to without permission.
- Motor Vehicles or Automobiles: Company vehicles are not covered by general liability. To ensure your vehicles are protected, you need commercial auto insurance.
- Professional Services or Advice You Provide: Any type of professional service or advice—such as that given by lawyers or consultants—requires professional liability/errors and omissions insurance.
Other Types of Coverage to Consider
Your business insurance policy should adequately cover your business and business-related activities so you are protected from accidents, disasters and if lawsuits are filed against you. While one of our dedicated brokers can walk you though the best coverages for your needs, a few other protections you could include in your policy are:
- Professional Liability: Also called errors and omissions, this coverage protects you against lawsuits filed as a result of professional services you've provided or advice given.
- Product Liability: This safeguards against bodily harm or property damage caused to a third-party because of a product you've manufactured, sold or distributed.
- Commercial Property Insurance: To protect your brick-and-mortar operation, you should have this coverage. It provides compensation should your business be damaged.
- Cyber Liability Insurance: Keep confidential client and financial information safe from hackers with this coverage option.
Directors and Officers Insurance: This coverage protects your company's directors and officers from personal financial loss resulting from allegations and lawsuits of wrongful acts or mismanagement.
How Does Commercial General Liability Protect My Business?
General liability coverage can help pay for legal fees from third-party lawsuits. Even if you're not at fault, you could be sued by a dissatisfied customer for a variety of reasons. For example, say you're a contractor completing work in a client's home; you finish the job and later get a call accusing you of damaging part of the home. Even if you're blameless, the client could still take you to court—resulting in costly legal fees.
What is the Difference Between Commercial General Liability and Professional Liability Insurance?
Both types of coverage protect you from the costs of being sued, having to pay out a settlement and any medical expenses you're also forced to cover. But, each type of insurance protects against a different cause of the claim filed against you.
Commercial general liability protects your business against consumers claiming they were physically injured, their property was damaged or their reputation was harmed by your business, product or while on your premises.
Contrarily, professional liability—also known as errors and omissions—protects your business from consumers claiming they were financially harmed by professional services you provided or advice you gave. For instance, say a financial consultant advises a client to invest in a stock that winds up costing them money. You could be sued for negligence or for making an error while providing your professional services—even if you're found not at fault.
What is the Cost of Business Liability Insurance in Calgary?
How much your policy costs largely depends on how much coverage you need, which is dictated primarily by your risk exposure. That said, limits can range from $1,000,000 to $2,000,000, and several millions of dollars as well.
Is General Liability Business Insurance Required by Law?
No. It's not legally required to have business insurance in Alberta. However, it's a far wiser decision to protect yourself from a just-in-case scenario than to be stuck with crippling legal bills because you were not protected by insurance. Even if you operate on good faith, even one upset customer who slipped and fell on your freshly mopped floors could wind up costing you dearly in legal fees and medical expenses. The risk is simply not worth it.
Why Does My Business Need General Liability Insurance?
All businesses should have a CGL policy to protect from possible lawsuits. Specifically, if your business deals with any of the following factors, you absolutely need this coverage:
- You have customers who visit your workplace
- You provide goods or services to customers at their premises
- You manufacture products for sale to retailers
- You employ people for your business
- You advertise your business
- you employ security personnel
- You rent out space for your business
Do You Need Other Types of Business Insurance?
While a commercial general liability policy provides important coverages, it won't cover all types of risks associated with operating a business. It's important to protect your company from all kinds of risks, so it's wise to talk to your local Krywolt Insurance broker to ensure you're adequately covered with a comprehensive business insurance policy.
How Do I Get a General Liability Insurance Policy?
It's easy to get a commercial general liability policy. All you have to do is reach out to your insurance agent or dedicated broker at Krywolt Insurance, and we'll help you find a policy that works for your business needs. We've worked with a range of clients throughout Calgary and are experts at assisting both large corporations and small locally-owned businesses with their insurance needs. With the team at Krywolt at your back, you'll never have to worry about a devastating financial loss because of a lawsuit or physical damage to your business. Instead, you can breathe easy knowing your coverage is in good hands.
