“Survival of the fittest” is truly applicable to any business landscape. Competition is fierce; businesses need to do all they can to constantly adapt to consumers’ needs, maintain a productive team, and build the right connections to secure customer loyalty. With so much to do and so many factors at play, surviving and thriving is, indeed, a challenge. The harsh reality is that around 7000 small businesses go bankrupt every year in Canada.
In an already competitive and challenging environment, just imagine the negative impact that sudden litigation could bring. Unforeseen instances such as customers contracting food poisoning, injury due to a product defect, or accidents within the premises can send any business into crisis mode. This is where commercial general liability insurance comes in.
If you’re still deciding whether or not your business needs this type of insurance, you are in the right place! In this article, we will discuss the fundamentals about commercial general liability insurance and which types of businesses need it most. Let’s get started!
What is Commercial General Liability Insurance?
Ranked number one on Forbes’ list of top insurance types business owners should have, commercial general liability insurance is a foundational insurance policy. This type of insurance protects your business in the event that injury, illness, or property damage is caused by your products or business operations. It also covers your business in case of third-party bodily injuries that occur within your premises. In addition, most commercial liability insurance policies also provide coverage for reputational or personal damage inflicted to a third-party.
With that said, not all commercial general liability insurance policies are the same. Some have exclusions such as the costs associated with a product recall, litigation related to faulty advertisements, and injuries/illness caused by a pollutant. Therefore, it’s important for any business to contact a trusted broker when securing this kind of insurance.
Here at KASE Insurance, we make it a point to customize your insurance policy based on the unique needs of your business. We are fully transparent about any kind of exclusion related to a policy and give the best options for availing additional coverage if needed.
What Types of Businesses Need Commercial General Liability Insurance?
Insurance is needed by nearly all kinds of businesses. Whether or not you need this kind of insurance does not depend on the size of your business or the industry your business falls under. What needs to be taken into consideration is where you do business, what service/product you provide, and how you interact with customers and third-parties.
If any of the following characteristics applies to your business, then you will benefit from having commercial general liability insurance in place:
Businesses That Manufacture or Sell Products
If you manufacture or sell any kind of product, a tailored commercial general liability insurance policy will protect your business from financial loss in the event that your products cause injury or illness to the customer. For example, product defects or a fault in the product’s design.
Businesses That Serve or Sell Food and Drinks
One of the main risks for restaurants, diners, cafes, and similar establishments is that of customers becoming ill due to the food or beverages served to them. In such cases, commercial general liability insurance can help with medical and legal costs.
Businesses That Have a Physical Location Frequented By Third-Parties
If your business has a physical location that is frequented by these third-party individuals, such as customers or suppliers, commercial general liability insurance will cover you in the event that you are found legally responsible for their injury within your premises. For example, a fixture falling from the ceiling, faulty furniture, the absence of a “CAUTION: Wet Floor” sign on a spill, and other similar instances.
Businesses That Provide Services That Can Potentially Damage Third-Party Property
If your business regularly sends out employees to provide services (e.g. repairs, installations, construction) near to or inside third-party property, commercial general liability insurance will cover you should the property sustain any damage that is linked to your business operations.
Businesses That Can Potentially Cause Personal or Reputational Damage
This last criterion can apply to almost any type of business out there. If ever your business will be sued for slander or libel towards a third-party, the right commercial general liability insurance policy will cover you.
Is Commercial General Liability Insurance Enough?
Oftentimes, this type of insurance is the first that businesses secure - due to its broad and much-needed coverage. After all, third-party legal action due to injury, illness, reputational damage, or property damage is a nightmare scenario that no business owner wants. It can cease operations, spread a negative image of the business, and of course, result in steep legal, medical or repair costs.
Sometimes, however, this type of insurance is, by itself, not enough to offer the full protection that a business needs. This is because some businesses have additional inherent risks that comprehensive general insurance does not typically cover. Here are a few examples:
- Businesses with work environments where employees are in danger of getting injured or ill;
- Businesses that operate a fleet of commercial vehicles that can be vandalized or get involved in a vehicular accident;
- Businesses that serve liquor and are therefore exposed to liquor liabilities;
- Businesses that rely on digital to store sensitive information and are therefore exposed to cyber crimes;
- Businesses that use the services of a courier or transport company and thus need coverage in the event of stolen, lost, or damaged goods while in transit.
It takes the expertise of an experienced insurance broker to be able to identify all the risks that your business needs coverage for - and from there, put together an insurance policy that is truly tailor-fit for your business.
Toronto-Based Insurance Brokerage That You Can Count On
KASE Insurance is one of the top-providers of business insurance in Canada. Through the years, we have served various businesses from all kinds of industries. Along the way, we’ve accumulated valuable experience and garnered industry recognition for the high-calibre service that we provide.
We make sure to carefully assess the needs of every client we work with; this way, we can put together tailor-fit insurance policies at competitive rates. If ever you are getting started on obtaining commercial general liability insurance or you would like to assess the current insurance policy that you have in place, we’re here to help! Contact us today or request a quick quote to get started.