Commercial General Liability Insurance in Ontario: Coverage, Cost and Who Needs It

Commercial general liability (CGL) insurance in Ontario protects your business against claims from third parties for bodily injury or property damage you are alleged to have caused, covering both the legal defence and any settlement or judgment up to your policy limit. It is the foundation of nearly every business insurance program, and most landlords, clients and contracts will require proof of it before you can work. Below I explain what CGL covers, the limits to consider, what drives the price, and who needs it.

What commercial general liability actually covers

A CGL policy responds when someone outside your business claims you caused them harm. The classic examples are a customer who slips and is injured on your premises, or your work that damages a client's property. Importantly, the policy pays not only damages you become legally obligated to pay but also the cost of defending the claim — and legal defence alone can be expensive even when the allegation is baseless.

• Third-party bodily injury — a visitor, customer or passer-by is hurt in connection with your operations.
• Third-party property damage — you or your work damages property belonging to someone else.
• Products & completed operations — harm caused by a product you sold or work you finished.
• Personal & advertising injury — claims such as libel, slander or certain advertising-related offences.
• Legal defence costs — lawyers, investigation and court costs to defend a covered claim.
• Tenant's legal liability — damage to premises you rent, commonly required in commercial leases.

What CGL does not cover

CGL is broad but it is not everything, and this is where businesses get caught. It does not cover your own property or stock, injury to your own employees, damage to your vehicles, professional mistakes or bad advice, or cyber incidents. Those gaps are filled by other policies — commercial property, WSIB or employer coverage, commercial auto, errors & omissions, and cyber insurance. A proper business insurance program layers these together so there are no surprises at claim time.

How much liability coverage should you carry?

Most Ontario small businesses carry a CGL limit of $1 million or $2 million per occurrence, and many contracts, leases and public tenders specifically require $2 million or more. The right limit depends on your industry, the size of the clients you serve, your contractual obligations, and your exposure to serious injury claims. Because a single serious liability claim can far exceed a $1 million limit, I often recommend stepping up to $2 million, or adding an umbrella layer, when the additional cost is modest relative to the protection.

Who needs commercial general liability insurance?

In practice, almost any business that interacts with the public, works on client property, sells a product, or rents commercial space needs CGL. Common examples I insure include:

• Contractors and trades — often required before a job starts; see contractors insurance.
• Retail and hospitality — foot traffic creates slip-and-fall exposure; see hospitality insurance.
• Professional and service firms — usually paired with professional liability coverage.
• Home-based and online businesses — a home policy rarely covers business activity.
• Anyone signing a commercial lease — landlords almost always require it.
• Small businesses generally — the starting point for most programs; see small business insurance.

What drives the cost of CGL in Ontario

There is no single price for liability insurance because the premium is built around your specific exposure. The main cost drivers are your industry and its injury risk, your annual revenue and payroll, the limit you select, your claims history, where and how you operate, and whether you need additional coverages bundled in. A low-risk consultancy pays very differently from a roofing contractor, even at the same revenue. For a fuller picture of pricing across coverage types, see my guide on how much commercial insurance costs in Ontario.

CGL is usually the start of a package, not the whole policy

In practice I rarely sell CGL entirely on its own. Most businesses are best served by a package that puts liability alongside the other coverages their operation needs, priced together and renewed on one date. Depending on what you do, that package might add commercial property for your premises and equipment, business interruption to replace income after a covered shutdown, commercial auto or fleet coverage for your vehicles, and specialized layers such as directors & officers or cyber for unusual exposures. Building it as one program closes the gaps that appear when coverages are bought piecemeal from different sources.

Additional insured and waiver requirements

Commercial contracts often go beyond simply requiring you to carry CGL. They may ask you to name the client or landlord as an additional insured, to include a waiver of subrogation, or to carry specific limits for the duration of the work. These are routine requests, but getting the wording exactly right on the certificate is what keeps your contract valid and your relationship with the client smooth. Because I read the insurance clause in your contract before I issue anything, the certificate matches what was actually asked for the first time, rather than bouncing back for corrections.

Certificates of insurance for landlords and clients

A certificate of insurance is the one-page document that proves you carry CGL, showing your limits and policy dates. Landlords, general contractors and corporate clients routinely ask for one — often naming them as an additional insured — before you sign a lease or begin work. The practical issue is turnaround: losing a contract because a certificate took days to arrive is avoidable. I issue certificates quickly, usually the same day, so a certificate request never stalls your deal.

How I structure the right liability program

Rather than selling you a template, I start with how your business actually operates — what you do, who you serve, what your contracts require — and then compare 12+ of Canada's top-rated insurers to build a program at the right limit and price. Many clients are best served by a packaged policy that combines CGL with property and other coverages. You can explore the broader options on my liability insurance and commercial insurance in Toronto pages, and read whether your operation even needs it in my post on whether you need business insurance in Ontario.

I am Suneet Sharma, an independent broker licensed as a R.I.B. (Ontario), based in downtown Toronto and brokered through Unibrokers. I compare the market, explain exactly what your CGL does and does not cover, issue certificates fast, and stay your single point of contact at renewal and at claim time. If a client or landlord just asked for proof of liability coverage, I can usually turn it around the same day.