General Liability Insurance
When things don't go as planned
What is Commercial General Liability Insurance?
Do you engage in a commercial activity in which you provide goods and/or services for money? Do you have customers
frequenting your place of business? Do you advertise your services or business on the internet or anywhere else? Do
you rent out space for your commercial activity?
If you run a business, no matter how large or small, you could potentially face financial loss from a lawsuit.
Whether you are a large corporation, a partnership or an individual who runs a small operation out of your home,
part of your business plan should include protecting yourself with General Liability Insurance, also known as
Commercial General Liability Insurance or Commercial Liability Insurance.
What Does General Liability Insurance Cover?
There are many different types of insurance available to address all kinds of professions and exposures, such as
Professional Liability or Pollution Liability. These specialized coverages cover very specific exposures and may not
include the broader more generalized coverages that fall under Commercial General Liability Insurance. Commercial
General Liability is the cornerstone of all business insurance.
Commercial Liability Insurance covers general business liability exposures such as:
- Bodily injury or property damage to a customer at your business premises or away from your premises but arising out of your business operations
- Customer slip and falls account for approximately 10% of liability claims
- Products and completed operations
- Products liability accounts for less than 5% and depends on the nature of the product you sell and any warranties you provide
- Personal and Advertising injury – including incidents such as false arrest, wrongful eviction, slander/libel, infringing another’s copyright in your advertisement or using another’s advertising idea in your advertisement
- Libel/slander claims account for less than 5% but can be more expensive
- Tenants Legal Liability – if you rent the space that you use for your business, landlords will generally require proof of insurance to cover the risk of damage to the building or other tenants’ property.
Additional Coverages for Commercial Liability Insurance
Commercial General Liability Insurance also covers other associated costs and expenses
that can be incurred in defending a claim, including:
- Legal costs to defend the action
- Reasonable expenses you might have, such as loss of earnings to appear in court or for examinations
- Court costs
- Interest costs on judgments
General Liability Business Insurance can provide peace of mind and financial security. Even the most conscientious
and prudent business person can be faced with a lawsuit. If someone sues you, you are required by law to defend the
allegations against you or risk having a default judgement entered against you or your business. Anyone who has ever
retained a lawyer knows that legal expenses can quickly add up, even without a judgement against you. Commercial
liability insurance covers these costs and expenses as well as any negotiated settlements or judgements, up to
Non-Owned Automobile Liability Insurance
Commercial General Liability insurance is often packaged together with another common business liability exposure:
Non-owned automobile liability (“NOA”). This coverage applies when the company’s employees are driving their own or
some other vehicle (not owned by the employer/company), while on company business. Employers are responsible for the
actions of their employees while those employees are carrying out company business and an employer could be named in
a lawsuit if, while driving a “non-owned” vehicle, an employee causes injury to a third party or damage to third
Insurance companies may include this coverage with commercial general liability insurance or charge an additional
premium, depending on the exposure.
Why does my business need general liability business insurance?
Here are some typical examples of where commercial liability can arise:
You have customers who visit your workplace
If you run a retail store, you will have people coming and going. The more customers, the higher the potential that
someone might injure themselves while on your property. Something as simple as a recently mopped floor or a spill
could cause a customer to slip and fall, injuring themselves and/or damaging their property. This could result in a
costly lawsuit, which, even if you are not found to be at fault, would be expensive to defend.
You provide goods or services to customers at their premises
You are a plumber who runs your business out of your home office. All your work is done at your customers’ premises.
You leave some tools lying around when you go on a break and the homeowner trips over the tools and injures
themselves. Your customer could not only refuse to pay but you could be served with a Statement of Claim which you
need to defend.
You manufacture products for sale to retailers
You manufacture a widget that you supply to a retailer. Mr. X buys your widget from the retail store and once he gets
it home and plugs it in, it explodes, causing damage to his kitchen and injury to his right hand. As the
manufacturer, you will definitely be named (along with anyone else in the supply chain) in the lawsuit that he
brings for damages, pain and suffering caused by your product.
You employ people for your business
As an employer, you are responsible for the actions of your employees while they are doing their work.For example,
you are a restaurant owner who employs a staff of servers. While carrying food to a table, one of your servers
trips, spilling hot food on a customer, causing serious burns to the customer’s arm and ruining her expensive
jewelry. Your restaurant would be faced with a lawsuit.
You advertise your business
Let’s say you run an advertisement in a local paper claiming your product is superior to a competitor’s.In this ad,
you suggest the competitor is using inferior materials.The competitor could sue you for making libellous statements.
You employ security personnel
Your over-enthusiastic security guard thinks he sees a teenager pocket something in your store and grabs and detains
the teen.The teenager’s parents sue you for false arrest. Many different types of businesses may employ security
personnel – retail and hospitality are just a few. They’re often there for a reason, and, unfortunately, any
interaction they have with the public can lead to litigation.
You rent out space for your business
You own a coffee shop in a strip mall. One of your kitchen appliances over-heats and catches fire, which quickly
spreads. The fire damages the building as well as other tenants’ property in the mall. The mall and other vendors
could sue you for damages.
As these examples illustrate, a lawsuit could arise under a number of different scenarios.
How Can Rogers Insurance help you get appropriate Commercial General Liability Insurance coverage suited to your
unique business needs?
Rogers Insurance has a team of insurance professionals who specialize in finding the right business liability
insurance for our clients in Calgary, Edmonton and all across Alberta, no matter the size of the enterprise or
Rogers’ Commercial Insurance Professionals help our business clients find the right insurance coverage and make sure
your business is protected. Our clients come from a wide range of industries from all across Alberta, including, but
not limited to:
Rogers Insurance can address your specific insurance needs and offer coverage options according to your business and
budget. We can assess your operations and exposures and make recommendations to best protect your business.
Depending on your business/industry, you may also require specialized insurance coverage such as:
- Equipment Breakdown Coverage
- Professional Liability
- Directors & Officers Liability
- Legal Expense Insurance
Your Rogers Commercial Insurance Professional will ensure that you have all the right coverage for your business.
How much does General Liability Business Insurance Cost?
Commercial Liability Insurance costs can vary widely, and, unlike personal lines insurance (like homeowners’
insurance), commercial business insurance is unique according to each business’ exposure. Pricing depends on many
- The industry
- The limits of coverage required
- Limits can range from $1,000,000 or $2,000,000 to many millions of dollars and may depend, among other
things, on exposure, legislative requirements and contractual requirements
- The size of the commercial enterprise
- The geographic area where the business operates
The cost of general liability insurance can range from a few hundred dollars for small business operations with
limited exposure to many thousands of dollars for large enterprises. This cost needs to be balanced against the
potential cost of a lawsuit, which typically may be $10,000 – $25,000* and does not include potential settlements or
awards. Few small or medium business owners have a reserve fund in case someone decides to sue and even larger
corporations can suffer serious financial setback by an expensive lawsuit.
Budgeting for proper commercial liability insurance coverage can provide a safety net to ensure that a costly lawsuit
does not potentially wipe out some or all of your business assets.
Whether you run a large incorporated company, a partnership, a small start-up or a home-based business, commercial
general liability insurance should be part of your business plan. This will help you sleep better at night and let
you focus on growing your business.
Further information regarding commercial general liability
to a recent study, 40% of business can expect to have a property or liability loss within a 10 year period.