Common Scenarios Where Business Liability Insurance Helps

Common Scenarios Where Having Business Liability Insurance in Ontario May Protect You

September 28, 2022


Business liability insurance protects Ontario businesses from lawsuits, property damage, and medical bills if any claims are filed against your company alleging you are responsible for a particular incident. Unfortunately, we find that in an increasingly litigious society, having business liability insurance for our Ontario small businesses is more than critical.

Justice in Canada is expensive. Just a 3-day trial can cost a small business upwards of $60,000. Not all small businesses may survive these kinds of costs. Insurance can be the difference between a business surviving for decades or failing prematurely.

There are plenty of other types of business insurance which may be of benefit to your operations, including commercial auto insurance, worker’s compensation insurance, etc. – but they are typically only ever added to a policy that already has some level of business liability insurance. In Ontario, small businesses may not be able to survive the ramifications of a civil lawsuit. Here are some common scenarios where having business liability insurance in Ontario may protect you:

Accidental Injuries

Take this scenario as a prime example of why business liability insurance in Ontario is critical for small businesses: slips and falls, bumps and scrapes, equipment falling, etc. – any injury that occurs accidentally. Predominantly, small business owners purchase CGL or business liability insurance for their Ontario companies to secure assistance with potential legal costs and medical bills in the event that their business is found responsible for bodily injury to third-party – be that a supplier coming to drop off cargo, a passerby, a client, etc. These injuries may occur on your premises or occur due to your operations.

To gain a better idea of what an accidental injury may look like, consider the following scenarios where having business liability insurance in Ontario may cover you:

  • Your company builds properties. During the building of one of your latest display homes, a piece of equipment falls off a ladder and injures someone walking below.
  • While attending a festival, one of the adornments at your booth falls loose onto the head of someone browsing your products.
  • After cleaning your lobby, one of your employees fails to put up a caution sign to warn passing customers about the wet floors. A customer slips and falls.

Property Damage

Property damage and accidental injuries are often found to be the most common reason for claims. Your business liability insurance in Ontario will cover you if your business’ operations, employees, or services if found to cause damage to third-party property and will include reimbursement for repair and replacement costs as well as legal expenses. Common claim examples include:

  • One of your contractors makes an error while repairing someone’s window and causes further damage to the client’s home.
  • While delivering a product to a client’s home, an employee accidentally knocks over a fragile vase on the customer’s porch and breaks it.
  • One of your company’s plumbers worsens an issue rather than fixing it.

Product Liability

Does your business manufacture a product? Design something? Maybe it’s a coffee shop that bakes fresh pastries each and every morning. Even the smallest bakery could face a product liability disaster if the materials, products, or goods they sell are found to have caused illness or injury to third-party.

The average product liability injury jury award has increased substantially over recent years. Having business liability insurance in Ontario can help to cover all the medical and legal costs.

There are numerous different kinds of product liability insurance claims, such as:

  • Your restaurant undercooks one of its dishes, leading to food poisoning.
  • A hand soap that your business manufactures and sells causes skin irritation and burning to the customers who purchase it.
  • You manufacture and sell PPE and manufactured masks with a defective design, which is later found to be ineffective when used.

Reputational Harm

Just about any business, no matter its industry, is at risk for reputational harm. Your business liability insurance in Ontario may cover your business against liability that may result from things like slander or libel. Here are several examples of scenarios where having liability insurance is critical:

  • You accidentally copy another business’ commercial idea, and they sue you for copyright infringement.
  • Your business posts a commercial ad that indirectly attacks another business, and they sue you alleging slander or libel.
  • Another business sues your business, alleging product disparagement.

How Much Does Business Liability Insurance in Ontario Cost?

The cost of business liability insurance in Ontario depends on your risk factor. For instance, an interior designer may not pay the same amount for their coverage as a baker might. Simply, your premiums will depend on your industry, your insurance history, your business experience, what you sell/the services you provide, and so forth.

To note as well, certain liability options may not be included with a standard policy, and you may have to pay a slightly increased premium in order to additional options. You may also want to consider the addition of the following:

Not all business liability insurance policies in Ontario come the same. Some insurance providers offer different packages or may have more exclusions than other companies. Some businesses may have an increased exposure to cybercrime, and need protection for that. (See: our top tips for reducing your business’ exposure to cyber attacks!) To get exactly what your business needs for the most affordable price, business owners depend on Excalibur Insurance to help find them quotes at competitive rates. Get a business liability insurance quote in Ontario today and begin on great coverage for the business you’ve worked hard to build.