Guide to Insurance coverages Common in Ontario, Canada for businesses
Commercial General Liability Insurance (CGL) is by far the most common policy and something every business in Ontario, Canada should have. Many insurance professionals would term this policy the cornerstone of a business plan. This is because a CGL Insurance policy covers you for lawsuits that claim you have caused bodily injury or property damage. When an insurance certificate is requested it almost always needs to include CGL coverage. Policies can range from $1 Million to $10 Million of liability and in some cases even higher. As you can imagine, working on a job site, injuries can happen to you. Parties injured can include one of your employees or staff, a sub-contractor, another trade, the homeowner, a passer by, the list goes on. We have seen injury lawsuits from so many different parties. When someone is seriously or catastrophically injured, personal injury lawyers look to name everyone involved on the job site to maximize the opportunities of pay out or party to blame.
Errors and Omissions (E&O) Insurance or sometimes called Professional Liability:
This covers your business for errors or omissions you may have made in your work, just like the name. Typically an E&O Policy responds when someone launches a lawsuit against you for making a mistake that caused them financial harm. No one was injured and it may not have caused property damage but they suffered financial harm because of your work. If they decide to sue, the E&O policy can work to defend and pay for the resulting loss.
Quick example: You made an error in your quoted proposal for the scope of work that needed to be completed as part of your presentation to the client. This resulted in them failing a home inspection and having to completely remove the work that you had done in order to stay to code. They can question faith in your ability as a contractor and are looking for a party to blame for the financial harm of damages.
Cyber Liability: Quickly emerging as the most needed coverage. We can typically add this on for you from the start. Run a website? Take customer payments digitally or exchange information via email or online? If so you are at risk of a cyber breach, data being stolen and as such causing financial harm. In an example where a data breach occurs and your customers are harmed they may sue and a cyber policy would respond.
Equipment Coverage: What’s the value of equipment it takes to operate your business now? Your tools, both mobile and stationary, can be worth quite a pretty penny nowadays. Theft, loss or other forms of damage to the tools can be covered under an equipment policy that values your items for you. Job sites can be a worry with theft and as a responsible business owner it pays to insure your tools!
Property Insurance: Will cover a few different areas of your business depending on your needs. Say you own the building in which your business operates, property insurance would cover the commercial property. Say you rent a location or a storefront to operate your business or admin out of, property insurance can cover your furniture, desks, furnishings within the location. Business property can come in all different shapes and sizes depending on what business you run and it’s important to assess the assets you have within the business to ensure you have a safe financial plan for loss or damage to items.
Quick example: I had a restaurant who rented a location and initially just wanted Liability insurance. They stated “Hey we rent and we want to keep our costs down”. We discussed a Commercial General Liability plan and put to work getting them an option. At the same time we did discuss maybe in a different way then they had heard before, what their total investment into the business was. Well, even though they rent, they still had purchased over a hundred thousand dollars worth of tables, chairs, furniture and fixtures that sat within their rented location. When we looked at this I had the figure I needed to at least price an option as an add on for them to consider. The property insurance in this case can be added to the CGL policy and is relatively inexpensive. A few years later, they had a major leak within the restaurant that caused over $40,000 damage to their property. Luckily, they had purchased the coverage as an add on and were thrilled they did. Coverage responded and they replaced the items quickly. Final thought- they also had a large value of equipment (fridges, stoves, appliances for the business) and they were added too. Many policies can have a combination of all or a few of the listed categories above.
You can check out my complete guide to just CGL insurance here. We also have complete guides to the other areas of insurance we offer in the drop down menu above to check out.
