Area of Law: Insurance Law
Answer # 2755
General liability business insuranceRegion: Ontario Answer # 2755
What is general liability insurance?
General liability insurance, also known as commercial general liability insurance, protects a business if it is found to be responsible if someone (called a third party) gets hurt or their property is damaged, either at the business location or offsite. The damage can be directly or indirectly related to the operations of a business or the use of its products. Most policies protect the business, the business owners and the employees.
Who is considered to be a third party?
A third party could be:
- A customer or client
- An employee of the business
- A courier or other delivery person
- A vendor
- Persons working on maintenance or repair at the business
- Any other visitor to the business
Bodily Injury claims
A business can be found liable for an injury to a third party that occurs both on or off the businesses property, such as a slip and fall accident that occurs on the front steps of the business, or an injury sustained when using a product made by the business.
Liability insurance can cover bodily injury claims for:
- Medical costs
- Lost wages
- Pain and suffering
Property Damage claims
Property damage liability insurance provides protection for claims of damage to someone’s property, for example if:
- a customer’s car is damaged while it is parked in the business parking lot
- one of the employees damages the property rented by the business
- a customer’s property is damaged while the business is providing services, etc.
Other types of coverage
Along with protection against claims for bodily injury and property damage, a business liability insurance policy could also include coverage for:
Product liability – provides protection against damages that are the result of defective products manufactured or sold by a business.
Personal Injury liability – provides protection against defamation or slander, for example if an employee tells another employee things about a client that are harmful and not true and the client finds out and sues.
What types of businesses should get general liability insurance?
Most businesses should consider purchasing general liability insurance, whether they operate in an office, at a retail space, or at their client’s location. For example:
- Real estate agents
- Web designers
- Financial advisors
- Retail stores
- Health services (e.g. medical clinics, massage therapists etc.)
How much does general liability insurance cost?
Businesses usually carry between $1,000,000 to $2,000,000 of general liability insurance. The cost of a policy will vary depending on many factors, such as the nature of the business activities and the types of liability covered, but usually ranges from $300 – $2,000 a year. Each policy is different. Speak with an insurance agent to discuss what coverage is right for your business.
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