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Running a business in Ontario comes with everyday risks. For example, you might accidentally damage a customer’s property while performing work, a visitor could be injured on your premises, or your company could face allegations related to advertising or reputational harm. Situations like these can lead to legal claims.
Commercial General Liability (CGL) insurance is designed to help protect businesses in Ontario against certain third-party claims for bodily injury, property damage, and personal or advertising injury arising from business operations, products, or premises. Coverage is always subject to the terms, conditions, limits, and exclusions of the policy.
While CGL insurance is not required by law in Ontario, many businesses choose to carry it as part of their overall risk management strategy. In some cases, it may also be required by contract, such as in lease agreements or client contracts.

What a CGL Policy Typically Covers

Although coverage varies by insurer and policy wording, a standard CGL policy in Ontario may include:

Bodily Injury and Property Damage

This coverage may respond if a third party alleges injury or property damage caused by your business operations or occurring on your premises. Examples could include:
➡️ A slip and fall incident at your storefront
➡️ Property damage caused while performing work at a client’s location
If a claim is brought against your business, the policy may help cover legal defense costs and, where applicable, damages you are legally obligated to pay, up to the policy limits.

Products and Completed Operations

This section generally applies to claims arising from products you manufacture, sell, or distribute, or from work you have completed.
For example:
➡️ A product you sold is alleged to have caused damage after purchase
➡️ A contractor’s completed work is alleged to have resulted in property damage at a later date
Not all policies automatically include this coverage. It is important to confirm whether Products and Completed Operations is included or excluded in your policy.

Personal and Advertising Injury

This coverage may apply to certain non-physical injuries, such as allegations of:
➡️ Libel or slander
➡️ Invasion of privacy
➡️ Copyright infringement in advertising
As with all coverage, it is subject to policy definitions and exclusions.

Medical Payments

Medical payments coverage is typically intended for minor incidents and may allow a business to voluntarily cover certain immediate medical expenses without admitting liability. This coverage is usually limited in scope and not intended for serious or ongoing medical treatment.

Tenant’s Legal Liability

If you lease your business premises, your CGL policy may include Tenant’s Legal Liability coverage. This can apply if you are found legally responsible for damage to the portion of the building you occupy due to your business operations.
Coverage limits should be reviewed carefully, particularly in leased commercial spaces, to ensure they align with lease requirements and the potential replacement cost exposure.

Understanding Policy Limits

CGL policies in Ontario generally include two key limits:

Per Occurrence Limit

The maximum amount the insurer will pay for any one claim or incident, including defense costs and damages, subject to policy wording.

Aggregate Limit

The total amount the policy will pay for all covered claims within a policy term (typically one year).
Selecting appropriate limits depends on your industry, contractual requirements, and risk exposure.

What Is Not Typically Covered

CGL policies contain exclusions. While exclusions vary, common examples may include:

➡️ Pollution liability
➡️ Certain communicable disease exposures
➡️ Cyber incidents (often excluded and insured separately)
➡️ Professional services (which may require Errors & Omissions insurance)
Because policy wordings evolve, it is important to review exclusions with your insurance broker to understand how they apply to your specific operations.

Non-Owned Automobile Coverage (SPF 6) – Ontario

In Ontario, businesses whose employees occasionally use their own vehicles for work purposes may consider Non-Owned Automobile Liability coverage, commonly referred to as SPF 6 (Standard Policy Form 6).

SPF 6 is designed to provide liability coverage to the business when an employee uses their personal vehicle for business activities, such as:

➡️ Running work related errands
➡️ Attending client meetings
➡️ Making deliveries using their own vehicle
This coverage typically responds on a secondary basis, meaning the employee’s personal auto insurance policy would respond first, subject to its limits and terms.

Important considerations:

➡️ SPF 6 does not cover vehicles owned or long-term leased by the business.
➡️ Coverage applies only to liability (damage or injury to others), not damage to the employee’s vehicle.
➡️ Rating is often based on how frequently employees use their vehicles for business purposes.
If a business owns or leases vehicles, a separate Ontario Automobile Policy (OAP 1) would generally be required.

Why Annual Reviews Matter

Businesses evolve over time. Changes in operations, revenue, staffing, products, or contracts can all affect your insurance needs. Even if your policy name remains the same, coverage wordings and exclusions may change from year to year.

Reviewing your Commercial General Liability policy annually with your broker helps ensure:

➡️ Your operations are accurately described
➡️ Your limits remain appropriate
➡️ Contractual requirements are met
➡️ Any new exposures are discussed

A Practical Part of Risk Management

Commercial General Liability insurance is often a foundational component of a business insurance program in Ontario. While it does not cover every risk, it can help protect against certain third-party claims that may otherwise result in significant legal expenses and financial exposure.
Because every business is different, coverage should be tailored to your operations, industry, and contractual obligations.
If you would like to review your current policy or discuss coverage options, we would be happy to assist!

Request a Commercial Quote HERE or give us a call at 1-800-263-9870.
If your claim occurs outside of our regular business hours, please give your Insurer a call on their 24-hour claims hotline HERE!