Public Liability Insurance Ontario

Public Liability Insurance Ontario

If you run a business, whether you operate a busy retail store, a lawn care company or any other type of business that involves serving customers or clients, you are exposing yourself to the risk of litigation, which can seriously compromise the success of your business operations. That’s why it’s so critically important for business owners to protect themselves with the right public liability insurance. Ontario business owners have enough on their plates without having to worry about the possibility of paying out of pocket for the costs associated with a lawsuit. You can get peace of mind and focus on running your business when you have the protection of public liability insurance.

What is Public Liability Insurance?

Public liability insurance, sometimes called business liability insurance, is a key component of most business insurance policies that provides coverage for legal costs and settlement expenses if a business is sued for allegedly causing third-party bodily injury, third-party property damage or advertising injury. In that type of scenario, public liability insurance gives you the ability to file a claim with your insurance company to receive compensation for the costs associated with your legal defence, such as legal mediation, attorney fees, court fees and, should you be found liable in court, settlement costs. This means you can get the assistance you need to deal with legal matters and get back to running your business without suffering major financial setbacks.

Who Needs Public Liability Insurance in Ontario?

Every public-facing business needs the protection of public liability insurance. Ontario business owners sometimes assume it’s only necessary if they have a commercial business location that is open to the public, but that’s not the case. Public liability insurance is necessary if:

• Customers or clients visit your commercial business location, whether it’s a store where anyone can walk in off the street or a private office that is only accessible by invitation.
• You visit your clients or customers at their homes, business properties, or public places.
• You or your employees perform services at locations other than your commercial property.

Based on the criteria listed above, most businesses need to have the right public liability insurance in Ontario.

Is Public Liability Insurance Legally Mandatory?

In Canada, public liability insurance is not mandatory coverage. In fact, that’s true of most types of business insurance, with a couple of obvious exceptions, such as commercial auto insurance. But just because the government doesn’t legally require you to have public liability insurance, that doesn’t mean you can effectively operate your business without it.

The reason public liability insurance is so important is that the costs of litigation can easily exceed a million dollars and continue to rise from there, and most business owners simply can’t afford to pay extremely high costs out of their own pocket and still keep their business up and running. Keep in mind that even if you or your employees did nothing wrong, you can still be accused of causing third-party injury or damage and be forced to defend yourself in court. But you also can’t prevent every single mishap or error that could lead to a lawsuit, no matter how careful you are and how cautiously you operate your business.

When it comes to public liability insurance, Ontario business owners should be aware that it’s not all about the ability to receive compensation in the event of a lawsuit. Other parties will sometimes refuse to do business with a company that doesn’t have public liability insurance. For example, if you need to lease a commercial space for your business, the leasing company may refuse to lease to you if you can’t or won’t produce a certificate of insurance proving you have adequate public liability coverage, along with other types of business insurance. Other parties in the supply chain or even clients may also refuse to enter into a contract with you if you don’t have the right types and amounts of commercial insurance, and that means you would be forced to walk away from contracts or struggle to get what you need to keep your business operating smoothly.

What Does Public Liability Insurance Cover?

There’s a common misconception that public liability insurance can be applied to any situation in which the policyholder has legal action brought against them, and that’s not true. There is a wide range of types of liability insurance available for commercial businesses, and public liability is one type that covers a specific set of reasons why another party may choose to sue a business. The three main allegations covered by public liability are third-party bodily injury, third-party property damage and advertising injury.

Third-Party Bodily Injury

Public liability insurance is sometimes called “slip and fall insurance,” and for good reason. One of the most common situations that can lead to a public liability claim is when a customer or someone else enters a business and injures themselves by slipping or tripping on a wet floor or an icy walkway. The injured third party could then bring a lawsuit against the business for causing bodily injury in order to get compensation for medical expenses, pain and suffering, loss of income if they’re unable to work due to the injury, and more.

Third-Party Property Damage

When you or your employee allegedly damages the property of a third party, and that person chooses to sue you to recover the cost of repairing or replacing the damaged structure or item, you can file a public liability claim to receive financial assistance with your legal expenses and, if you are found liable for causing the damage, the cost of the settlement up to the public liability limits listed on your policy. An example of this would be if a handyman carried a ladder into a client’s home and accidentally scraped it against a costly painting, prompting the homeowner to sue for the cost of having the painting restored.

Personal and Advertising Injury

Public liability insurance doesn’t just apply to physical injury and damage. It can also be applied to personal injury or advertising injury caused by libel, slander, false advertising, violation of privacy and some other types of reputational harm. This coverage is particularly important in a modern world where anyone can post anything online without adequately considering the potential for causing injury to another party.

Can Additional Coverage Be Added to Public Liability Insurance?

What exactly is covered by public liability insurance depends on the coverages offered by your insurance provider and how your particular policy is written. While public liability insurance always covers third-party bodily injury, third-party property damage and personal or advertising injury, it can also potentially offer you other types of coverage as well, such as completed operations insurance and tenant legal liability insurance. While every type of public-facing business needs standard public liability coverages, the following coverages are beneficial to specific types of businesses.

Completed Operations

If you are in the construction or renovation industry, whether you’re a general contractor or a specialized tradesperson, completed operations coverage is a highly recommended addition to your public liability insurance in Ontario. Unlike the standard public liability coverage, completed operations applies to a situation in which the results of your work allegedly cause third-party property damage or bodily injury after the project is complete for a certain period of time. For example, if you were hired to build a deck at a residential property and a couple of years later the deck collapsed, causing injuries to several people and damage to the house, the homeowner could allege that it was due to faulty work on your part and bring a lawsuit against you. With completed operations coverage, you could then file a claim to avoid paying legal and settlement costs out of pocket.

Tenant Legal Liability

If your business leases or rents a commercial space, it’s important to have tenant legal liability coverage on your public liability insurance in Ontario. If the rented or leased property is damaged by something like a fire or sewer backup, the property owner could potentially allege that your business was responsible for causing the fire and take you to court for the cost of restoring the building to its former condition. Tenant’s legal liability insurance would cover your legal defence costs up to the coverage limits on your policy.

Is There a Difference Between Public Liability Insurance and Commercial General Liability Insurance?

The exact meaning of the terms “public liability” and “commercial general liability” can vary based on the country and, to some extent, the insurance provider. In Canada, commercial general liability (CGL) is the more common term for this type of coverage, and public liability is often considered essentially the same as CGL insurance. However, some insurance companies interpret the terms slightly differently and consider public liability insurance to be a type of commercial general liability insurance, with the main difference being that commercial general liability insurance has a broader scope of coverage with higher limits and a greater range of possible endorsements.

The brokers at Morison Insurance have the experience and expertise necessary to navigate public liability insurance in Ontario and other types of commercial insurance to ensure that you get the coverage that is best suited to your business. Your business is unique, and we understand that your insurance coverage must be uniquely tailored to address the perils you are most likely to face in your business operations. Give us a call if you are interested in finding out more about public liability insurance, CGL coverage and the right options for your business.

What is Not Covered By Public Liability Insurance?

Because public liability insurance is a type of liability insurance, it does not cover any expenses or scenarios unrelated to liability. If your own commercial property were damaged or destroyed by something like a natural disaster or a fire, for example, you would need commercial property insurance coverage to get compensation for repair, restoration, and replacement costs. It also will not cover expenses associated with injury to employees or the policyholder. Public liability insurance applies specifically to litigation related to the perils discussed above. It does not apply to:

• Litigation resulting from accusations of professional negligence, bad advice, failure to provide promised services and errors or omissions, which requires professional liability insurance.
• Injury or damage caused by products you manufacture or fabricate, which requires product liability insurance.
• Financial losses, breach of privacy and more resulting from a cyber attack, which requires commercial cyber insurance.

What Determines the Premiums for Public Liability Insurance?

To provide a public liability insurance quote, an insurance carrier first needs to gather a variety of information about you and your business to carry out an assessment of your risk exposure, or how likely you are to need to file a claim. For public liability insurance, Ontario insurance companies look at a wide range of factors such as:

• How many years of experience you have
• Your annual and projected gross revenue
• Your insurance claim history
• How many employees you have
• The location of your business
• The products and/or services you offer

Please note that these are not the only factors determining the cost of your public liability insurance. To receive an accurate public liability insurance quote, contact the expert brokers at Morison Insurance.

Where Can I Get Public Liability Insurance?

If you are looking for a public liability insurance policy, rely on the experienced brokers at Morison Insurance. We are here to help ensure that your business is protected properly. To get a public liability insurance quote, call 1-800-463-8074 or fill out the form on our website. We are here to help!