Whether you’re a consultant, a retail business owner, a contractor, or a skilled tradesperson, one important coverage you shouldn’t overlook is commercial general liability (CGL) insurance. Lawsuits against your business can not only impact your finances but also jeopardize your reputation with clients and customers. To safeguard your business, it’s vital to understand the risks your business faces and obtain the right CGL coverage.
Commercial general liability can mitigate your losses if you are held legally responsible for bodily injuries or property damage to a third party resulting from the products you sell or the services you offer.
if a customer slips and falls on the steps to your retail store and hurts themselves, if they believe your business is responsible, they can file a lawsuit against you for the damages that were caused. According to the Canadian Institute for Health Information, falls are sending more Canadians to the emergency department than ever before.
It’s important to ensure you’re protected from this type of liability exposure. Again, if there was nothing wrong with the steps to your store and a customer still managed to trip and fall and hurt themselves, that customer could potentially still file a liability claim against you.
- Maintenance personnel
- Delivery persons
- Any other type of visitor
- Pain and suffering
- Lost wages
- Medical bills
Property damage liability:
If you’re held legally responsible for damages caused to a third party’s property, it can lead to substantial legal expenses and negatively impact your reputation with customers. CGL insurance is designed to respond to these types of situations and help mitigate potential costs associated with these types of claims.
For example, if you’re a caterer, and you’re catering an event offsite. If someone claims you or an employee of yours damaged their property during the event, you could face a 3rd party property damage liability lawsuit.
Do I need CGL insurance?
Some small business owners don’t realize they need liability insurance, don’t believe they need liability insurance, or think it’s simply too expensive. The reality is that regardless of the size of your business, even if you operate from your home, it remains exposed to various forms of liability. At the bare minimum, every business should have a standard CGL policy to protect them from risk and loss.
Some of the consequences of operating without CGL insurance may include:
- If you’re found legally liable for bodily injury or property damage to a third party, your company may have to pay the costs associated with the legal process and any financial consequences that stem from the lawsuit.
- Your reputation with your clients/ customers could be severely damaged. Consumers need to feel a sense of trust with companies and brands. A lawsuit could shatter that sense of trust if handled poorly.
- There are numerous scenarios where you could be asked to provide a certificate of insurance to a prospective customer or business partner. If your business participates in events such as tradeshows or markets, the venue will often request that participants provide a certificate of insurance that details liability coverage that your business has in place. If you’re a contractor or skilled tradesperson, prospective clients may require seeing a certificate of insurance prior to engaging your services or before allowing you to conduct work on their property.