Ai Errors and Omissions Insurance





What is Commercial Liability Insurance?

General Liability Insurance, also called Commercial General Liability Insurance (CGL) or general liability insurance, protects you from a variety of threats, including bodily injury or accidents that occur on your property. Note that this typically only applies to injuries of non-employees. If an employee of yours is injured on the job site, this is generally covered by worker's compensation. It also covers some, but not all, forms of property damage.

Another major benefit of having CGL is that it protects you against copyright infringement lawsuits. For example, if you're running an ad campaign for your retail business, and another business decides that ads look too similar to theirs, they may try to file a lawsuit by claiming copyright infringement. As with most lawsuits, this can be a major headache for you, even if you've done nothing wrong. It can also put a huge financial strain on you just to fight the case, even if the judgment ultimately ends up in your favour. 

It's also important to remember that judges and lawyers are fallible, just like everyone else. So even if you haven't done anything intentionally wrong, there's no guarantee the courts will rule in your favour. Fortunately, if you have the foresight to obtain CGL coverage, accusations of copyright infringement won't leave your fate up to the whims of the judicial system.

Last but not least, CGL can protect you from lawsuits based on reputation damage. For example, you might make a comment that is less than flattering about one of your competitors. Maybe you didn't make the comment with malicious intent, but you were a little too careless about who you shared your opinion with. Maybe the comment ends up being published in the local newspaper or recorded and posted on YouTube by someone unbeknownst to you. The next thing you know, you've opened yourself up to a lawsuit by the competitor. Having general liability insurance can protect you in this type of situation.


Business Interruption


Business interruption helps protect your business when it is inoperable due to a covered bodily injury or property damage to building/contents. BI will help cover your expenses and lost profits when your business is unable to generate income due to temporary/long term closure or extensive repairs. 


However, a slowdown in business, government closure, or quarantine is not considered as property damage or bodily harm, so you may not be eligible for business interruption in that situation. Nonetheless, reach out to your insurance broker to verify your coverage.


Business Interruption Coverage and its Application to the Current Situation

Business interruption coverages are triggered by direct physical loss or damage to property by a peril insured against. We are not aware of any Canadian case law that supports the interpretation of the short-term presence of a virus on the property as direct physical damage.

The following business interruption coverages require there to be direct physical loss or damage to property by a peril insured against in order to respond to a loss of income and/or incurred extra expenses:

• Business Income, Profits, Gross Earnings, Actual Loss Sustained, Rents
• Civil Authority Extensions
• Ingress/Egress Extensions
• Extra Expense
• Contingent Business Interruption 

For more information regarding business interruption coverage, please contact our insurance Expert. 


Do I need coverage?


Depending on your business, you may need commercial liability coverage in addition to one or more additional types of coverage. For example, as mentioned above, CGL protects you in situations where your client is injured on your property, but not in cases where your employees are injured. For the latter, you typically need workman's compensation. Likewise, it covers you for copyright infringement but not for most professional mistakes, which require having professional liability coverage. 


As we said before, General Liability Insurance  policies varied in detail and structure depending on your business and used to be combined with Errors and Omissions Insurance but generally speaking the coverage include:

  • Bodily injured: it covers medical expenses and compensation for accidents that occur to a third party during the course of your business operation. This coverage is designed to prevent a costly lawsuit.
  • Property damage: Damage to property that you are legally liable for, including rented property. It covers the cost of repairing your installations as well as any damage caused by equipment belonging to your clients.
  • Defense cost: it covers the suits against your company regardless of fault.
  • Personal injury: it protects your company name and reputation. Conventional General Liability insurance does not include libel and slander coverage but you can have it if you purchase a combine CGL and E&O insurance policy. It will protect you against a lawsuit resulting from failure in your job. It will also cover the cost of investing allegations.

When deciding where to look for coverage, there's no substitute for the advice of an experienced professional. They can ensure that you aren't missing any critical types of coverage that may end up leaving you with significant exposure to financial risk. By the same token, they can also make sure that you aren't buying coverage that you don't need or paying for a policy that doesn't apply to you.


Contact a CGL Expert today for a quote!












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