Commercial insurance in Canada, also known as business insurance is insurance designed for commercial activities and operations. Commercial insurance is meant to protect businesses from risk exposures that could damage, interrupt or cause financial loss to the business.
Commercial Liability Insurance
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What does a Commercial General Liability insurance (CGL) Cover?
A commercial general liability policy or CGL for short addresses the following exposures:
- Bodily Injury and Property Damage Liability
- Personal and Advertising injury liability
- Medical Payments
- Tenant’s Legal Liability
Coverages A through D are the main components of a commercial insurance policy in Canada.
Commercial Insurance Brokers
A commercial insurance broker deals primarily with business insurance. However, a broker’s license qualifies any insurance broker to sell commercial and personal lines insurance products.
When shopping for business or commercial insurance it’s best to choose an insurance brokerage with a good reputation and one that specializes in commercial auto insurance. Get as many quotes from as many insurance brokerages as possible to secure the best quote!
Types of Commercial Insurance
The types of Commercial Insurance available in Canada include:
Commercial Auto – Similar to personal vehicle insurance but tied to the risk exposures a business or organization.
Commercial Property – Commercial property insurance covers loss, damage, business interruption, and liability exposures of a business or organization.
Boiler and Machinery Insurance – usually added as a component of insurance coverage to a commercial insurance solution, or package. Boiler and machinery are a form of property insurance designed to cover explosions, ruptures, mechanical breakdowns, and electrical arching.
Aviation Insurance – Aviation insurance covers damage to aircraft hull and third-party liability.
Agriculture Insurance – also known as Farm insurance, agriculture insurance provides insurance coverage for hail damage and livestock mortality. Coverage enhancements are also available to suit the insurance needs of the commercial farmer.
Errors and Omissions Insurance – also known as E&O insurance or Professional liability insurance, this type of commercial insurance covers errors and omissions resulting in damages or loss to a client. Professional occupations such as lawyers, accountants, engineers, architects, financial advisors and similarly, exposed vocations require E&O Insurance.
Crime Insurance – Crime insurance covers theft, burglary, robbery and pilferage of money, securities from employees and non-employees.
Surety Bonds – technically not a form of insurance but can be categorized under the same umbrella. Surety bonds ensure that obligations are met by the parties involved. The construction industry is commonly known for using surety bonds to ensure projects are completed should a party breach the bond or contract.
Group Insurance – group insurance is designed for companies, organizations, and businesses who want to offer insurance products to their employees for a discounted price.
Directors and Officers Liability Insurance – also know and D&O insurance and similar to Error and Omissions but protection is directed to the Directors and Officers of a company or organization.
Nuclear Energy Insurance – nuclear energy insurance covers the legal liability for operators of nuclear installations.
Entertainment Insurance – entertainment insurance covers cancellations or delays of projects due to unforeseen events
Credit Insurance – Credit insurance offers coverage to a seller for unfulfilled payments by the borrower. Credit insurance guarantees to a seller of goods and services that payment will be rendered should the borrower default in the obligation to pay.
Medical Malpractice Insurance – very similar to Errors and Omissions insurance but designed for health care professionals.
Commercial Insurance Canada FAQs
A commercial general liability insurance policy normally excludes the following, but not limited to:
-Expected or Intended Injury
-Aircraft and Watercraft
-Owner Property Excluded
-Sold Property Excluded
-Property Loaned to the Insured
-Abuse and Alleged Abuse Excluded
-Professional Services Excluded
Yes, you need a commercial auto insurance policy to cover delivery driving. Driving for compensation or any commercial activity is a standard exclusion in the Owner’s policy.
Commercial insurance isn’t necessarily cheaper than personal insurance but usually tends to be. Commercial insurance can range from very expensive to cheaper than a personal lines policy.
Commercial risks are diverse in scope, address greater risk and usually demand higher insurance limits to accommodate business operations.
Yes. You can drive a commercial vehicle for personal use in most cases.
A commercial insurance policy can cover a multitude of things depending on the type of business or organization. A commercial insurance policy isn’t a standard, “cookie-cutter” policy that fits all businesses. Commercial insurance brokers combine many forms of insurance to come up with an insurance package to suit unique business requirements. However, most commercial insurance policies usually include a Commercial General Liability or CGL policy attached to the core of the policy. A CGL policy covers responsibility for legal liability to third parties.
The cost of commercial insurance varies depending on the business type, the risk exposures involved, the limits of insurance required and many more variables. Calculating a $ figure for an average cost of commercial insurance is a futile exercise as there are too many variables. Speaking to a commercial insurance broker for a quote is the only way to price out commercial insurance.
Business insurance may or may not be mandatory depending on the type of business or organization. For example, if the business or organization has employees, unemployment or workers compensation insurance would be required.
Commercial insurance is usually more expensive than personal insurance but that’s not always the case. There are situations where the cost of personal insurance exceeds the cost of personal insurance. An example could be a personal auto policy insured with Facility, compared to a sole proprietor, snow removal business.
The need for commercial auto insurance usually comes from the exclusion of commercial operations in a personal lines auto policy. That is to say, there would be no insurance coverage if you used your personal vehicle for commercial purposes. A commercial auto insurance policy is required so that you’re protected from a potential loss since a personal auto policy excludes commercial operations.