Commercial General Liability Insurance in Ontario

No, not by law for most businesses. However, landlords, clients, lenders and municipalities routinely require proof of CGL coverage before signing a lease or contract, and contractors are often refused work on commercial projects without it. Even when not legally required, it's one of the most practical policies a business can carry.

Costs typically range from $300 to $1,500 per year for smaller, lower-risk businesses, with most small businesses paying $450 to $2,000 annually for $2 million in coverage. Larger businesses or higher-risk industries can pay more. Cost depends on your industry, revenue, location, claims history and coverage limit.

$2 million is common for smaller contracts and many commercial leases. $5 million or more is typical for contracting, property-related work, and many commercial leases with larger exposure. $10 million or higher shows up for municipal contracts and larger projects. Your contracts and client requirements usually dictate the minimum.

CGL covers third-party bodily injury, property damage, and personal or advertising injury claims arising from your operations, products, or premises — for example, an employee accidentally damaging a client's property, or a competitor alleging your ad copy was defamatory. It also covers legal defence costs even if a claim turns out to be unfounded.

CGL does not cover professional errors or negligent advice (that requires professional liability/E&O), employee injuries (covered by WSIB), intentional acts, or your own tools, equipment and property (that requires commercial property or equipment coverage). Cyber incidents are also typically excluded and need separate cyber liability coverage.

Generally, CGL is not designed to cover the cost of redoing your own faulty work — that's a business risk, not an insurable third-party liability. However, CGL can cover resulting third-party damage caused by faulty workmanship, such as a botched installation that damages a client's property. A broker can clarify how this applies to your specific trade.

General liability (CGL) covers third-party bodily injury and property damage from your operations or premises. Professional liability (errors & omissions) covers claims of negligence, mistakes or missed deadlines in the professional advice or services you provide. Many service businesses — consultants, agencies, and regulated professions — need both.