The policy everyone asks you for.
Landlords, general contractors, clients and municipalities all demand proof of liability insurance before you can work. They also demand specific limits and specific wording, and that is where most certificates get rejected.
Get liability cover See what’s coveredInjury and property damage you cause to others, plus the cost of defending it
Almost every business, because contracts and leases demand it
The contract clause, the lease, or whatever asked you for proof
What does commercial general liability cover?
Three things. Injury to someone who is not your employee. Damage to property that is not yours. And the cost of defending you when either is claimed, whether or not you were at fault.
It does not cover your own property, your own work, professional advice, or your staff. Each of those is a separate policy. Assuming liability covers them is the most common mistake in business insurance.
Anything above your limit is paid by the company, and then by whoever guaranteed it personally. A single serious injury claim can pass two million dollars, and the defence costs start long before anyone decides who was at fault.
The line between liability and everything else.
Bodily injury to others
A customer, a visitor or a member of the public hurt because of your operations or premises.
Damage to others’ property
You damage a client’s building, a neighbouring unit or someone’s equipment while working.
Legal defence costs
Lawyers, experts and court costs, which begin whether the claim is fair or not, and often exceed the settlement.
Products and completed operations
Harm caused after your work is finished or your product has been sold, often the longest tail on the policy.
Not: your own work or product
Repairing your own faulty work is a business cost, not an insured loss. This surprises people.
Not: professional advice
Errors in advice, design or a professional service need professional liability instead.
Why certificates get rejected.
A rejected certificate is rarely about the cover being wrong. It is about the document not saying the exact thing the contract demands. These are the four reasons we see.
The limit is short
The contract says $5 million, the policy carries $2 million. Straightforward to fix, once someone reads both.
Someone is not named
Additional insureds, owners, property managers or lenders that the contract requires to appear.
Missing wording
Cross liability, waiver of subrogation, primary and non-contributory, specific phrases that must actually be there.
How much liability cover do I need?
Start with the contract, then think about the exposure.
The floor is whatever your contracts, leases and licences require. Usually $2 million. Often $5 million. Sometimes $10 million or more on larger construction and public work. Those numbers are not up for debate, so the first step is reading what you signed.
The ceiling is a judgement call about what a bad claim could really cost. One injury claim involving long-term care can run well past $2 million. Anything above your limit comes out of your own pocket, or the company’s. Higher limits usually cost far less than people expect, because the top layers are rarely reached.
We will tell you what your contracts require and what we think the exposure justifies, and we will tell you when the two are different.
A situation we see.
A customer trips on a cable in your showroom and needs surgery. Liability pays the claim and the lawyers. It does not pay to replace the display they knocked over on the way down, because that is your own property.
Almost every business, for different reasons.
What business owners ask us about liability.
How much general liability insurance do I need?
At minimum, what your contracts and lease require, usually $2 million or $5 million, and $10 million or more on larger projects. Beyond that it is a judgement about exposure, and higher limits cost proportionally less than people assume.
What is an additional insured?
Someone else added to your policy so they are protected for claims arising out of your work, typically a property owner, a general contractor or a client. Contracts frequently require it, and a certificate without it will be rejected.
Does liability insurance cover my own mistakes?
It covers harm you cause to others, not the cost of redoing your own faulty work. Errors in professional advice or design need professional liability, which is a different policy.
Someone is threatening to sue me. What do I do?
Tell us immediately, before you respond to them. Do not admit fault, do not agree to anything, and send us whatever you have received. Late notice can genuinely affect your coverage.
Am I covered for work I finished last year?
Usually yes, through products and completed operations cover, provided the policy was in force appropriately. Gaps in cover between policies are where this gets complicated, so avoid letting cover lapse even briefly.
Does my liability policy cover my employees getting hurt?
No. Workplace injuries to employees fall under WorkSafeBC rather than your liability policy. Liability covers people who are not your employees.
What people usually look at next.
Worth reading your own policy for the pollution exclusion.
Send us what you have been asked for.
The contract clause, the lease, or the email demanding proof. We will tell you exactly what it requires.
Sell advice rather than product? consultants & professional services, general liability does not cover a client suing over your work.
Liability is only half of it. business interruption covers what a closure costs you.
Need a higher limit than your policy carries? umbrella & excess liability costs less per million than people expect.