Your lease has a clause about it. So does the contract from the builder who wants your crew on site next month. Both ask for CA$2 million or CA$5 million of general liability insurance, and both want a certificate naming them. That paperwork is how most Canadian owners meet the policy, and it never explains what the wording quietly leaves out.
Short answer: Canadians buy this as Commercial General Liability, or CGL. It pays third-party bodily injury and property damage caused by your premises, operations or products, plus personal and advertising injury, and it funds your legal defence. It stays silent on employee injuries, professional advice and vehicles.
Key takeaways
- The Canadian product is CGL, and brokers rarely sell it alone. It usually arrives inside a package or Business Owner’s Policy with property cover attached.
- CGL is occurrence-based. The policy in force on the day of the accident responds, even if the claim lands years later.
- Five gaps catch owners out: employee injury, professional advice, owned vehicles, pollution and the cost of redoing your own faulty work.
- Ranges we found quoted by Canadian brokers in 2026 run from roughly CA$400 a year for a solo consultant to CA$8,000 or more for a roofer.
- A certificate of insurance proves cover exists. An additional insured endorsement is what actually extends your policy to a landlord or client.
What CGL pays, and what pays instead
Every Canadian CGL form is built around third parties. A third party is somebody outside your business: a customer, a passer-by, a client, a neighbouring tenant. Your staff is not a third party, and neither are you.
The table below is the fastest way to see where the line falls.
| What happens | Does CGL respond? | What responds if it doesn’t |
|---|---|---|
| A customer slips on your wet entrance and breaks a wrist | Yes, bodily injury | Not applicable |
| Your ladder goes through a client’s bay window | Yes, property damage | Not applicable |
| A competitor sues over wording in your ad | Usually yes, advertising injury | Not applicable |
| Your employee falls off that same ladder | No | Provincial workers’ compensation |
| A client says your advice cost them CA$80,000 | No | Errors and omissions cover |
| Your van reverses into a parked car | No | Commercial auto policy |
| The tile you laid lifts and has to be pulled up again | No, that is your own work | You, or your warranty reserve |
| Diesel from your equipment soaks a neighbour’s soil | Usually no | Standalone pollution liability |
| You need to pull 4,000 units off shelves | Only the harm they caused | Product recall cover |
Defence costs matter as much as the payout. A CGL insurer appoints and pays a lawyer once a claim falls inside the grant of cover, and it does that even when the allegation turns out to be nonsense. Defending a groundless slip-and-fall claim can still burn five figures. Smaller disputes end up in a cheaper venue, and in Ontario that often means the CA$50,000 small claims process rather than the Superior Court.
Occurrence-based cover, and why the trigger decides everything
This is the single most useful thing to understand about the product, and almost no page-one result explains it.
CGL is written on an occurrence basis. The policy that responds is the one in force on the day the injury or damage happened, not the day somebody complained. Sell a defective bracket in March 2026, get sued in 2031, and your 2026 policy answers the call. That holds even if you closed the business in 2028.
Professional liability works the other way. Errors and omissions is normally written on a claims-made basis, so the policy that responds is the one live on the day the claim is reported. Let it lapse and yesterday’s work goes bare, which is why lawyers and accountants buy run-off cover when they retire.
Two practical consequences follow. Keep your expired CGL declarations pages forever, because they are the proof of which insurer owes you a defence in 2033. And check the trigger wording before you assume a policy renewal fixed an old problem.
The exclusions owners find out about too late
Innovation, Science and Economic Development Canada published Key Small Business Statistics 2025. It counted 1.10 million employer businesses in December 2024, and 88.4% of them employ fewer than 20 people. Almost nobody in that group has a risk manager reading policy wordings, so the exclusions surface at claim time.
Employee injury. A worker hurt on the job is a workers’ compensation matter, handled by the WSIB in Ontario, WorkSafeBC in British Columbia, or the WCB in Alberta and the prairie provinces. Registration is compulsory for most employers in covered industries, and the scheme replaces the worker’s right to sue you. Your safety obligations are statutory too, and the duties Ontario’s OHSA puts on employers sit entirely outside the insurance policy.
Professional advice. If a client’s loss comes from your judgment rather than your ladder, CGL steps back. Design, consulting, bookkeeping, inspection reports and treatment plans all belong to an errors and omissions policy instead. That distinction catches out contractors who also draw plans.
Owned vehicles. Anything licensed for the road goes on a commercial auto policy. Your CGL covers the ladder on the roof rack once it is off the vehicle and in use, which is a genuinely confusing seam.
Pollution. Standard Canadian forms exclude gradual contamination and much of the sudden kind. Fuel spills, refrigerant releases and mould claims usually need an endorsement or a separate environmental policy.
Your own work and product. CGL pays for the damage your faulty work causes to other property. It does not pay to redo the work itself. Rip out a badly soldered joint, and the insurer covers the ruined drywall below, not the plumbing labour.
Contracts you signed. Broad indemnity clauses are only covered where they qualify as an insured contract under the wording. Signing a client’s hold-harmless clause does not automatically move that promise onto your policy.
What general liability insurance costs in Canada
Premiums track exposure, not company size. An underwriter prices your revenue, your payroll, your claims history, the work you do at height, and whether you touch other people’s property. Location matters too, because a Toronto storefront and a rural shop do not attract the same premises risk.
The figures below are annual ranges at a CA$2 million per-occurrence limit, collected from Canadian broker quotes and published rate guides in 2026. Treat them as a sanity check on a quote, not a price list.
| Business | Typical annual range, CA$2M limit | What moves it |
|---|---|---|
| Solo consultant, bookkeeper or designer, home office | CA$400 to CA$800 | Revenue, client site visits |
| Photographer, trainer, market vendor | CA$450 to CA$900 | Public events, rented venues |
| Retail shop or small office with foot traffic | CA$700 to CA$1,800 | Square metres, hours open |
| Cleaning company with a few staff | CA$800 to CA$2,000 | Payroll, keys to client premises |
| Restaurant or cafe | CA$1,200 to CA$3,000 | Seats, alcohol, cooking method |
| Electrician, plumber or HVAC contractor | CA$1,500 to CA$3,500 | Subcontractors, hot work |
| Roofer, framer or excavation contractor | CA$3,000 to CA$8,000 and up | Height, depth, claims record |
Moving from a CA$2 million limit to CA$5 million rarely doubles anything. Brokers commonly quote another 10% to 25%, because the extra layer only pays after the first two million has gone. That is cheap protection when a landlord or a general contractor demands the higher figure anyway.
Certificates of insurance and additional insured status
Here is where the lease clause becomes real money.
A certificate of insurance is a one-page summary from your broker. On it sit the insurer, the policy number, the limits, and the expiry date. The page proves cover existed on the day your broker issued it. Nobody gains a right from it, and your policy does not change by one word.
A certificate holder simply receives that page and, usually, a notice if the policy cancels. Landlords who ask only for holder status have asked for very little.
An additional insured endorsement is the one with teeth. Your insurer amends the policy so the named party enjoys your cover for liability arising out of your operations. If a shopper sues both you and the mall over your spilled mop bucket, the mall’s defence comes out of your limit. Most Canadian forms include a cross-liability or severability clause, so the insurer treats each insured separately.
Two more requests turn up in Canadian contracts. A waiver of subrogation stops your insurer chasing the client after it pays. Tenant’s legal liability covers damage to the space you rent, which your standard third-party grant excludes because you occupy it. Read the clause before you buy, then send the exact wording to your broker. Getting an endorsement added later costs a phone call, while discovering you never had one costs the claim.
Limits, packages and the Business Owner’s Policy
Few Canadian brokers will sell you a bare liability policy. The usual structure is a package, often called a Business Owner’s Policy, that bundles CGL with commercial property, tenant’s legal liability, business interruption, crime and sometimes equipment breakdown. Bundling is normally cheaper than buying the parts separately.
On limits, CA$2 million is the floor most contracts accept. CA$5 million has become the default in construction, property management and anything involving municipal permits. Businesses with real bodily-injury exposure add a commercial umbrella above the CGL, which stacks another CA$5 million or CA$10 million for a modest premium.
One warning about aggregates. Your policy carries a per-occurrence limit and an annual aggregate, and a bad year can exhaust the aggregate before December. Ask what the aggregate is, not just the number on the certificate.
Before you sign anything
Work in this order. Pull the insurance clause out of the lease or contract. Write down the limit and the exact endorsements it names, then send that list to a broker who knows your trade. Ask what the policy excludes, in plain words, and ask which separate policy fills each gap. Then ask about the aggregate.
Coverage decisions turn on your own contracts and your own province, so a general guide can only take you so far. If a clause is doing something you do not recognize, get in touch with the Lawverra team before your signature makes it binding.
Frequently asked questions
No statute forces a typical business to carry it. Contracts do the forcing instead. Commercial leases, client agreements, municipal business licences, trade certifications and most public tenders all require proof of cover before you start.
No. Tools are your property, not a third party’s, so they belong on a contractor’s equipment floater or the property section of your package.
Public liability is an older term still used in some Canadian contracts, and it refers mainly to premises accidents. CGL is broader, since it also covers your completed work, your products, and advertising injury.
Generally not. Insurers expect each sub to carry its own limits, and many will charge you as though the sub were an employee if you cannot produce their certificate. Collect those certificates before the trade starts work.
Most Canadian brokers issue a certificate the same day, often within an hour of binding, and many online insurers issue one instantly. That matters when a site supervisor is holding up your start date.
