Commercial General Liability Explained

Commercial General Liability is the base layer of business protection. If your business is alleged to have caused bodily injury or property damage to a third party, CGL is the policy that responds.

What it covers

• Premises liability: someone is injured at your place of business.
• Operations liability: your work causes damage at a client's site.
• Products liability: a product you make or sell causes harm.
• Personal and advertising injury: allegations such as libel, slander or copyright infringement.

What it does not cover

Injuries to your own employees (WSIB), financial loss caused by your professional advice (Errors and Omissions), damage to your own property or vehicles, and intentional acts. It also commonly excludes damage to the specific property you were working on — a gap that matters enormously to trades and cleaning businesses and needs to be addressed deliberately.

The duty to defend

One of the most valuable features of a CGL policy is that the insurer pays to defend you against a covered claim even when the allegation is baseless. Legal costs alone can be ruinous long before any question of settlement arises, and for most small businesses this is the part of the policy that actually gets used.

Choosing limits

$2,000,000 remains a common starting point, but $5,000,000 is now routinely specified in commercial leases and subcontracts. Where a higher limit is needed, an umbrella or excess liability policy above the primary is usually the more economical route. Check whether the contract requires the limit per project rather than as a shared aggregate — that distinction changes the cost considerably.