General liability insurance

Being in business involves risks and responsibilities. To protect themselves from lawsuits, legal fees and penalties that could lead to bankruptcy, all companies should have general liability insurance with limits that are high enough to cover any eventuality. This type of insurance is sometimes also required by landlords or clients.

To find out the risks involved in your business context, talk to your Ultima broker.

Which companies should think about getting general liability insurance?

  • All types of companies
  • Construction general contractors and specialty contractors (electricians, plumbers, etc.)
  • Retail businesses
  • Restaurants
  • Property owners

What are the most common general liability risks?

Risks vary by industry, but any company can inadvertently cause damages to a third party. For instance, an excavation specialist can damage a foundation, a retailer can be held liable for a defective product sold, a welder can cause a fire while working, and so on.

What does general liability insurance protection typically cover?

General liability insurance typically reimburses any amount paid for damages caused to a third party, up to the limit of the policy. It also covers, without limitation, the expenses incurred for legal defense.

Here are a few examples of general liability coverage:

  • Liability resulting from poor workmanship (inherent defects)
  • Liability for damage caused to third parties (general liability)
  • Liability for site maintenance
  • Liability for products manufactured or sold by the insured party
  • Liability resulting from activities on a construction worksite (wrap-up)

Liability prevention tips for businesses

  • Set up a prevention committee.
  • Make sure work is properly supervised.
  • Perform quality control on products prior to selling them.
  • Keep your sites properly maintained and secure hazardous areas:
    • Suitable snow removal and de-icing in winter
    • Safe staircases
    • Proper lighting in parking lots, etc.
  • Have a product recall program that clearly records lot numbers, matching them with purchasers.
  • Obtain a certificate of insurance from the manufacturer whose products you distribute or sell, listing you as an “additional insured” on their general liability insurance policy.

To get appropriate liability protection, talk to your Ultima broker.