How Much Does Commercial General Liability Insurance Cost in Ottawa?

In This Article

• Is There a Typical CGL Insurance Cost in Ottawa?
• What Drives Your Commercial General Liability Insurance Cost?
• Why CGL Insurance Requirements Can Vary by Location and Contract
• Why CGL Insurance Costs Vary by Industry
• What a CGL Premium Does Not Cover
• What an Underwriter Needs Before You Get a Quote
• How to Manage Your Commercial General Liability Premium
• Frequently Asked Questions

There isn’t one standard price for commercial general liability (CGL) insurance in Ottawa. What a business pays depends on what it does, how it operates and the liability risks an insurer is being asked to cover.

A home-based bookkeeper and a roofing contractor may both need CGL coverage, but the insurer is taking on very different risks in each case. Revenue, claims history, subcontractor use, coverage limits and other factors can also affect the premium.

That makes broad provincial averages of limited use when you’re budgeting for coverage. The more useful question is what factors will affect the cost of CGL insurance for your particular Ottawa business.

This article looks at those factors, why liability limits can vary and what a commercial general liability policy does and doesn’t cover. ONA is a RIBO-regulated independent brokerage that has served Ottawa-area businesses since 1961. We work with multiple insurers and shop the market on your behalf. For a closer look at what CGL covers, including Coverage A through D, see our commercial general liability insurance page.

Is There a Typical CGL Insurance Cost in Ottawa?

There is no single CGL premium that accurately represents every small business in Ottawa. Even businesses in the same industry may receive different quotes because of differences in their operations, revenue, claims experience, location, contractual requirements and other exposures.

A lower-risk office-based operation, for example, presents a different liability exposure from a contractor whose employees work at height or on customers’ property. A restaurant with regular customer traffic presents different risks again.

The amount of coverage you purchase also matters. A business that needs a higher liability limit or additional endorsements may pay more than one purchasing more basic coverage.

CGL may also be only one part of a business insurance package. If you add commercial property, equipment, business interruption or other coverages to the same policy, the total policy premium will increase because you’re purchasing additional protection. That doesn’t necessarily mean the CGL portion itself has become more expensive.

For that reason, comparing two premiums without comparing the limits, deductibles, endorsements and other coverages included in each policy can be misleading.

What Drives Your Commercial General Liability Insurance Cost?

The Insurance Bureau of Canada identifies several factors insurers consider when setting a business insurance premium, including the coverage required, liability exposure, property replacement cost, location, claims history and market conditions.

For CGL specifically, some of the most important factors can include:

• Your type of business. Underwriters classify businesses based on their operations and the risks involved. Working at height, using heat, handling food, manufacturing or selling products, or regularly having customers on your premises can all affect liability exposure.
• Revenue or payroll. Depending on the type of business, liability premiums may be rated partly on sales, payroll or another measure of business activity. As the business grows, its exposure can change as well.
• Where and how you work. A business operating entirely from an office presents different risks from one whose employees regularly work at customer locations, construction sites or public events.
• Subcontractors. If you hire trades or other contractors, an insurer may ask whether they carry their own liability coverage and whether you collect certificates of insurance from them.
• Claims history. Previous claims can affect how an insurer evaluates the risk of covering your business and may influence both pricing and underwriting terms.
• Coverage limits and endorsements. The amount of liability coverage you purchase and any additional coverage required by a contract, landlord, client or municipality can affect your premium.
• Risk management. Safety procedures, employee training, documentation and other loss-prevention practices can help an insurer understand how your business manages its exposures.

Market conditions matter too. Commercial insurance pricing can change as claims costs, legal costs, insurer capacity and the types of risks insurers are willing to write change over time.

Why CGL Insurance Requirements Can Vary by Location and Contract

Many businesses don’t choose their liability limit in isolation. The amount of coverage they need may be set by a municipal licence or permit, commercial lease, client contract, general contractor or other organization.

In the City of Ottawa, $2 million in commercial general liability coverage is a common minimum for a number of licensed business activities. These include certain food premises, snow plow contractors, public garages, driving schools and kennels. Depending on the licence or agreement, the business may also need to provide a certificate of insurance or name the City as an additional insured.

However, the published municipal minimum isn’t necessarily the limit every business will ultimately be asked to carry.

ONA regularly sees businesses asked for higher limits depending on the type of operation, the permit or contract involved and where the business is located. This can include kennels and other businesses that may be asked to carry more than the minimum shown in municipal licensing material. ONA also sees $3 million requirements in parts of the Russell and Prescott area, while some permits, projects and contracts can require $5 million or more in liability coverage.

Commercial landlords, general contractors and clients may also set their own insurance requirements.

That means businesses shouldn’t assume that one standard limit will satisfy every situation. Before arranging coverage, check the wording in your municipal licence or permit, lease, client contract and any certificate of insurance request you’ve received.

For many business owners, the question isn’t simply how much liability insurance they want to buy. It’s whether their policy satisfies all of the requirements attached to where and how they operate.

Why CGL Insurance Costs Vary by Industry

The nature of your work is one of the biggest reasons CGL premiums differ between businesses. An insurer considers how likely a liability claim may be and how severe that claim could become.

Here are some examples of how exposures can differ:

These aren’t the only factors an insurer will consider, and businesses that appear similar on the surface can still have different risk profiles.

A retailer operating from its own premises, for example, has a different liability exposure from a contractor working on a customer’s property. Contractors can also face claims arising from work after a project has been completed, which is why completed operations coverage can be particularly important.

Our guide to contractors’ liability insurance in Ontario explains how liability exposures can play out on a jobsite, while our contractors insurance page outlines other coverages that may be included in a trades insurance package.

What a CGL Premium Does Not Cover

CGL is designed primarily to respond to certain third-party liability claims, such as claims involving bodily injury or property damage. It isn’t a general-purpose policy covering every risk a business faces.

Other coverages may need to be added to a package or purchased separately, depending on the business:

• Your own property. Damage to your building, stock, equipment or other business property generally falls under commercial property coverage rather than CGL.
• Lost income after a shutdown. Business interruption insurance can help replace income and cover certain ongoing expenses when an insured loss forces a business to close or reduce operations.
• Mistakes in professional advice or services. Claims arising from professional errors or omissions generally require professional liability insurance rather than CGL.
• Cyber incidents and data breaches. Cyber exposures generally require dedicated cyber coverage.
• Workplace injuries. CGL isn’t a substitute for applicable workplace insurance obligations, including WSIB requirements where they apply.

This distinction is important when comparing quotes. A standalone CGL policy and a broader commercial package that includes property, business interruption and other coverages aren’t equivalent simply because both include liability insurance.

A small business insurance package may include several coverages under one policy, while our commercial insurance hub provides an overview of other types of protection businesses may need.

What an Underwriter Needs Before You Get a Quote

General pricing information can only tell you so much because an underwriter needs details about your particular business before determining a premium.

Having accurate information ready can make the quoting process more efficient. Depending on your business, you may be asked for:

• A clear description of your operations, including occasional or seasonal work.
• Your recent revenue and projected revenue for the coming year.
• Payroll and employee information, which may need to be separated between office and field staff.
• Information about subcontractors and whether they carry their own liability insurance.
• Your claims history for the period requested by the insurer.
• The liability limit and insurance wording required by your lease, licence, permit or client contracts.
• Any additional insured requirements.
• Whether you own or lease your premises.
• The addresses and municipalities where your business operates.
• Details about your safety procedures or other risk management practices.

Being specific matters. Requirements can differ by municipality, project and type of work, so your broker should know not only what your business does but where it operates and what insurance documentation you’ve been asked to provide.

How to Manage Your Commercial General Liability Premium

You can’t control every factor that affects commercial insurance pricing, but there are steps businesses can take to help insurers assess their risk accurately and potentially improve their options.

1. Describe your operations accurately. Your premium depends partly on the type of work you perform. Give your broker and insurer a complete description so the business can be classified appropriately.
2. Consider packaging compatible coverages. If you need liability, property and other business coverage, placing them together in a commercial package may be more practical and, in some cases, more cost-effective than purchasing separate policies.
3. Keep subcontractor insurance documentation current. If you use subcontractors, maintain up-to-date certificates showing the liability insurance they carry.
4. Document your risk management practices. Written safety procedures, employee training and other loss-prevention measures give an underwriter a clearer picture of how your business manages risk.
5. Maintain accurate claims information. Providing complete claims history and explaining any changes made following a loss can help an underwriter evaluate your current exposure.
6. Have a broker compare available markets. Insurers have different underwriting appetites. An insurer that is competitive for one type of business may not be the best fit for another.

Reducing your liability limit isn’t necessarily an effective way to manage costs if the lower limit no longer satisfies a lease, licence, permit or client contract. Coverage should still meet the requirements your business has agreed to.

Frequently Asked Questions