Business liability insurance designed for Canadian companies

General liability

• Otherwise known as “commercial general liability” or “CGL,” general liability insurance in Canada protects your business from third-party claims of bodily injury or property damage. If a customer slips and hurts themselves in your store, or your employee damages client property, commercial liability insurance will cover the legal defence costs, any settlements, and court judgments.

Professional liability

• Otherwise known as “errors and omissions” or “E&O,” professional liability insurance protects your business against financial loss caused by a professional mistake, advice, or negligence. For example, if a designer’s plans cause project delays, or an accountant’s oversight leads to an error in their client’s filing, this coverage helps cover legal fees and financial damages. It’s important to note that professional liability insurance does not cover physical injuries or property damage.

If your business interacts with clients, the public, or other businesses, having liability insurance isn’t just smart, it’s essential. Liability insurance is a critical safeguard against the financial impact of lawsuits, accidents, or professional errors. While not mandatory in most provinces, proof of business liability insurance is a requirement for most landlords, lenders, and clients.

Business types and coverage include:

• Trades and contractors for accidental damage at client job sites.
• Retailers and restaurants for customer injuries or property damage.
• Professional services like consultants, designers, and accountants for mistakes or wrong advice.
• Manufacturers, wholesalers, and distributors for defective or unsafe products.
• Service businesses for accidents involving clients or third parties.
• Home-based businesses that involve client visits or online sales.

Business liability insurance doesn’t cover everything, which is why we encourage bundling coverage to ensure full protection. Typical exclusions include:

• Intentional acts like deliberate property damage or bodily harm.
• Employee injuries, which are usually covered by workers’ compensation (WCB).
• Damage to your own property, covered under commercial property (not liability) insurance.
• Poor workmanship or contract disputes.
• Professional mistakes, covered under professional liability insurance (E&O).
• Pollution, asbestos, or mold, unless specifically added.
• Cyber risks.
• Certain natural disasters, like floods and earthquakes, must be added as endorsements.

Westland advisors will work with you closely to navigate your premium factors. Industry and risk level, business size, location, coverage limits, previous claims history, and additional coverage can affect the cost of your business liability insurance.

For small businesses: $500- $700 per year is the typical cost for a basic liability policy. Most small businesses choose a package between $900-$1200 per year, with broader coverage and higher limits costing more.

Not all business liability insurance in Canada is mandatory, but certain coverages are depending on your operations. For example, commercial auto insurance is required if you use vehicles, while workers’ compensation (WCB) is needed if you employ staff. General liability insurance or professional liability insurance are often contractually, but not legally, required by landlords, clients, and lenders. Business liability coverage is strongly recommended, as lawsuits can be financially devastating. 

Business liability insurance does not include cyber protection as a default. Businesses should have a dedicated cyber liability policy to properly safeguard against the intricacies of cyber risks. Things like response costs (e.g. forensic investigation) for data breaches, notification costs to affected clients, legal defence for digital infractions, and business interruption losses are covered.   

Liability insurance

• Protects your business financially if it causes harm to others, whether that’s bodily injury, property damage, or financial loss. For example, if a customer slips and falls in your store, liability insurance helps cover legal fees and compensation costs.

Property insurance

• Covers damage to your own assets, like your building, equipment, or inventory. If a fire damages your stock or a storm impacts your premises, property insurance helps you recover and rebuild.

There are key differences between coverage of employees and subcontractors to be aware of. Business liability insurance in Canada typically covers your business entity and employees acting within the scope of their duties. Subcontractors, however, should carry their own insurance as they are not automatically covered.

If a subcontractor causes damage and isn’t named under your policy or contract indemnity clauses, your policy may not respond. This is why many contracts require proof of subcontractor liability coverage before engaging in business with them. Employees injured on the job are covered under workers’ compensation.

First things first: report the incident to your Westland advisor immediately and we’ll guide you from there. The more documentation you can provide, including notes, witness statements, and photos, the better. Avoid admitting fault or discussing liability with the other party. We’ll help you file the claim and connect you with an adjuster while they investigate the incident, confirm coverage, and manage settlement or defence. We’re here to advocate for you throughout the process and make it as smooth, quick, and fair as possible.  

Industry risk level, specific contract requirements, number and value of assets, business size, revenue, and exposure are some of the many factors to consider when purchasing business liability insurance.

Most small to mid-sized businesses choose $2M in liability coverage. While with large or high-risk businesses, excess liability or umbrella policies can increase limits beyond $5M. Our advisors can help assess your exposure and recommend appropriate coverage.