General liability is the policy nearly every business is asked for. It is also the one that gets assumed to cover more than it does.
It answers harm you cause to other people and their property. It is not written to answer your advice, your own workmanship, your staff, or the property you were looking after. Those are four separate policies.
Start a quote file Read the short answer firstBad advice is errors and omissions.
Your own work is generally on you.
Employee injury goes to WorkSafeBC.
What does a general liability policy not cover?
Four things sit outside it: advice you gave, the cost of putting your own faulty work right, injuries to your own employees, and damage to property that was in your care at the time. A general liability policy responds to bodily injury and property damage that you cause to somebody else. Every one of those four sits outside that sentence, and each is answered by a different policy.
This is not an insurer being narrow. It is what the product is. General liability is the cover a client or a landlord asks you to prove you have, which is why it gets treated as the policy that covers everything. The certificate proves you hold it. It does not tell you what it does.
Look at what the four have in common. Your advice, your workmanship, your employees and the goods in your care are all things you control. General liability covers the accidents you cause to people and property outside your control. The moment the loss is inside your own operation, the policy hands off to something else, and the question stops being whether you are insured and becomes which policy you bought. That is the pattern behind these four. There are other exclusions in a liability wording, so treat the four as a starting point rather than the whole list. WorkSafeBC describes the bargain on its side of the line: “WorkSafeBC insurance protects employers from being sued by workers for injuries which occur during the course of their employment.” Separately, liability wordings carry an employer’s liability exclusion, so the two are meant to fit together. Read WorkSafeBC on the benefits of coverage (opens in a new tab).
Every one of these is a different policy.
Advice you gave
A drawing, a specification, a recommendation, a report. If the loss came from what you said rather than from something you knocked over, it is a professional liability claim. Most general liability policies carry a professional services exclusion, usually added by endorsement, and its reach depends on how that endorsement describes the services. It can catch work a business would not have called professional, such as a design element inside a build, or a recommendation given alongside a supply.
Your own faulty work
If a joint you installed fails and floods the floor below, the damage to the floor is a general liability matter. The cost of taking out your joint and installing it properly generally is not, because the standard wording excludes damage to your own work once the job is finished. There is an exception that changes the answer for contractors. Many liability wordings carry a subcontractor exception, so the exclusion does not bite where the damaged work, or the work the damage came out of, was done on your behalf by a subcontractor. So a job you ran with subtrades can sit differently from one you did with your own hands, and your own wording is what decides which.
Your own employees
Injuries to your staff sit with WorkSafeBC in this province, not with your liability policy. The employer liability exclusion is in the wording precisely because the workers compensation system already answers it. What that system does not answer is a claim brought against you as an employer over how somebody was treated, which is employment practices cover.
Property in your care
A customer’s vehicle in your bay, a client’s equipment in your workshop, stock in your warehouse that belongs to someone else. The standard wording excludes damage to personal property in your care, custody or control, and that takes away cover for the one thing sitting in front of the business. What answers it depends on what the property is. For goods you hold for others it is bailee or warehouse cover, and there is more than one kind. For customers’ vehicles in a repair shop it is a different policy again. Tell us what you hold and we will tell you which.
Each business is insured. None is covered for the thing that happens. All three are illustrations, not client files.
The specification that was wrong
A supplier recommends the wrong grade of material and the installation fails. The claim looks like property damage, but the cause is the recommendation. A professional services exclusion can apply to exactly that, and a business that never called itself a consultancy may hold no errors and omissions cover at all.
The customer car in the bay
A vehicle is damaged while on the hoist. The shop holds a proper general liability policy and has shown the certificate to its landlord for years. Care, custody and control reaches the one thing the shop most needs insured, which is other people’s vehicles.
The subtrade who was really staff
A contractor is treated as self-employed but works only for one business, on its schedule, with its tools. If someone is hurt, whether that person counts as a worker is settled on the facts rather than on the invoice. Employer liability exclusions and WorkSafeBC coverage both turn on that answer, so it is worth putting to WorkSafeBC or a lawyer before something happens.
The ones that come up when a certificate is requested.
My client asked for general liability. Is that enough?
It is enough to satisfy the clause. Whether it is enough to protect the business is a different question, and the two get confused. Send us the clause and your policy and we will tell you in writing what the cover is written to answer for the work you do.
Does it cover damage to the building I rent?
Usually yes, up to a stated limit, under tenants legal liability. That limit is worth revisiting, because it needs to reflect what it would cost to rebuild the space you occupy rather than what your contents are worth. It is a single figure on the declarations page and it is worth reading.
We only give advice. Do we still need general liability?
They answer different things. General liability answers the visitor who trips in your office or the laptop you knock off a client’s desk. Professional liability answers the advice. One is not a substitute for the other.
What is the difference between an occurrence and a claims made policy?
General liability is usually written on an occurrence basis, meaning it responds to something that happened during the policy period even if the claim arrives years later. Professional liability is usually claims made, which is why the retroactive date matters so much on that side and barely at all on this one.
Our operations changed. Does the policy still fit?
Liability is rated and worded around what you told the insurer you do. New services, new sites, a new province or a new class of customer can all move you outside what was described. Tell your broker when the business changes, not at renewal.
Two that follow directly from this one: what errors and omissions covers and what an umbrella actually sits over.
Not the question you had? Send your declarations page and the question with it through the quote file and you will get a written answer.
Find the gaps before somebody else does.
Four questions, one declarations page, and a written note on where your cover stops.