What is General Liability Insurance?
If you’re a small business owner, freelancer, or self-employed individual, there may be a time when you ask what is general liability insurance. That’s because having the right business insurance is essential for anyone that runs a business. Here’s how general liability insurance works in Canada.
What is general liability insurance?
General liability insurance is often called commercial general liability (CGL) insurance. It’s an insurance policy designed to protect you and your business against any claims of bodily injury, copyright infringement, and property damage that relate to your business operations, premises, and products.
For example, let’s say you own a small retail store. One of your employees slips and falls while mopping. They decide to sue you for lost wages, negligence and medical expenses. Obviously, having a lawsuit against you can be expensive. That’s why having business liability insurance is essential, as it can help you cover the costs of your legal defence.
Essentially, if you have a business that requires anyone to enter your place of business or even your personal home, you should have some kind of CGL policy in place.
Here’s another example, let’s say you’re a content creator, and you collaborate with another content creator. That content creator says something in the live stream which could be considered an advertising injury, such as slander, reputational harm, and libel. A CGL insurance policy would help you cover the costs of any potential litigation.
What does general liability insurance cover?
If you’re still trying to figure out what is general liability insurance, think about what it covers specifically. You’d essentially be protected from the following situations:
- Bodily injury
- Property damage
- Advertising injury
- Medical expenses
Also note that some CGL policies cover product liability, but not always.
How much does CGL insurance cost?
Generally speaking, CGL insurance policies cost less than $30 a month. That’s a pretty good deal to cover yourself from their parties trying to sue you. As you can imagine, the liability coverage will differ depending on your options and the insurance provider you go with.
Some business owners that work out of their homes assume that since their home/tenant insurance already provides coverage for personal injury, there’s no need to purchase CGL coverage. However, if you read your homeowner’s certificate of insurance, there’s like a clause that says you’re not covered if you’re operating a business out of your home. That’s why having a separate policy for CGL is so important.
What to look for in CGL insurance in Canada
When you start looking for general liability insurance quotes, you should look out following:
- Scope of policy – You want something that gives you lots of coverage.
- Cost – The premiums you pay should factor into your decision.
- What it covers – You’ll want your insurance provider to give you a detailed list of what you’re covered for.
Note that commercial general liability insurance doesn’t protect you from all potential lawsuits. You can’t just do whatever you want and expect your insurance to cover the costs. In addition, your insurance won’t cover you if any of the services you offer causes financial loss for your clients.
What other types of insurance do businesses need?
Now that you know what is general liability insurance, it’s time to think about any other potential business insurance policies.
- Professional liability – Often known as errors and omissions (E&O) insurance, professional liability insurance covers you from risks directly related to your profession. For example, an accountant or freelance writer would need E&O insurance in case they make a mistake, and someone tries to sue them.
- Property insurance – If you have business assets, you’ll want business property insurance as it can cover the cost of any repairs or replacements.
How to get general liability insurance
Getting insurance coverage is pretty straightforward and can be done completely online. The steps would be as follows:
- Find and select the coverage you need
- Choose a payment plan (monthly or annually)
- Get your policy emailed to you
The cost of general liability insurance in Canada is inexpensive, and you can have it within a few minutes after paying your premiums. It can also often be purchased with professional liability and property insurance at the same time, so you can ensure you have all the protection that you need.
