What does CGL mean in insurance?
CGL means Commercial General Liability insurance, a product that is applicable to most businesses. CGL is one of the most widespread and widely applicable coverages, which most businesses should have (including small businesses).
Businesses left without CGL insurance can be held financially responsible for any damages that occur on their premises, damages caused by their products, or in the process of conducting business or providing their services. Often, this will be one of the first insurance policies that a business insurance advisor will discuss with their client. This coverage protects businesses a large number of potential risks (though not all); this is why the product is called “Commercial General Liability.”
What does CGL insurance include?
There are several different levels of coverage that a CGL policy might have, but typically, the policy will include property damage, bodily injury, personal injury and advertising injury.
However, CGL insurance policies can include additional coverage. One of these additional elements might be premises coverage, which safeguards the business against the financial burden of claims that may occur on their premises when conducting business.
Additionally, in a CGL policy, the named insured can be an individual or a business.
What damages are covered by a CGL policy?
Property damage
Coverage for damage to someone else's property resulting from your regular business operations or caused by your employees.
Bodily injury
Coverage for someone else’s injuries resulting from your regular business operations or caused by your employees.
Personal injury
Coverage for personal injuries that businesses could be sued for, like invasion of privacy, libel, copyright claims and more.
Advertising injury
Coverage for advertising injury resulting from damages caused by intellectual theft, trade dress infringement or copying another business’s slogan.
Extensions may include:
Legal Costs
A CGL policy also covers the cost to defend your business against a claim in court, including the cost to compensate a third party.
Tenants’ Legal Liability
Tenants’ legal liability is another extension that is often present in a CGL policy. This extension helps protect your rented premises of a landlord's property you may be legally responsible for. This covers specific perils such as fire, smoke, water damage, smoke.
What is not covered under a CGL policy?
While CGL policies protect businesses from a wide range of risks, there are many other damages that a CGL policy will not cover, including:
- Intentional or expected damage
- Coverages located on other policies
What does CGL insurance cost?
The cost of a CGL policy in Ontario can vary widely, depending on several cost factors, which include (but are not limited to the following).
Cost Factors
- Percentage of revenue from builds, i.e. midrise or single-family homes
Examples of costs
A home builder with $2 million CGL insurance who builds 2 homes a year, might pay $1,500, while a home builder that builds 100 homes a year may pay $50,000.
Coverage limits
Increasing the policy limits can increase premiums
The typical CGL policy limits we see most builders carry is $2,000,000-$10,000,000.
Where can you get CGL insurance in Ontario?
When shopping for CGL insurance in Ontario, you must purchase a policy through a licensed business insurance broker. It’s always best to work with insurance advisors who are risk management experts in your field, which is why we’ve created the Buildsure program for homebuilders, contractors, and construction companies.
Our team of experts utilize their decades of expertise and leverage their market connections to deliver unbeatable value across many types of coverage. Contact us today for a risk review and discover the advantages of the Buildsure Program.
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