What Does CGL Insurance Cover (and Not Cover) in Ontario?

By Michael Landry · Updated October 6, 2026

Liability insuranceGeneral liabilityPolicy basicsAdditional insuredContracts and leasesContractors

Commercial general liability, usually shortened to CGL or “general liability,” is the policy Ontario businesses are asked about most often. Landlords want it in the lease, general contractors want it before you step on site, and event venues want it before you load in. Yet many owners are not sure what it actually pays for. Here is a plain language look at what CGL typically covers, what it usually leaves out and which other policies fill those gaps.

Every policy is different, so treat this as a general guide. The policy wording, endorsements and exclusions on your own contract are what decide how a claim is handled.

What is commercial general liability insurance?

CGL is third party liability insurance. It responds when someone outside your business (a customer, a visitor, a client or a member of the public) claims that your business operations, premises or products caused them harm. If the claim is covered, the policy typically pays for your legal defence and for amounts you become legally obligated to pay, up to the policy limits.

That “third party” idea is the key to understanding CGL. It protects you against claims from others. It is not designed to repair or replace your own property, and it does not pay for every kind of loss a business can have.

What does CGL insurance typically cover?

Most CGL policies are built around a few core coverage parts:

• Bodily injury. A customer slips on a wet floor in your shop, or a passer-by is hurt by falling material from your job site.
• Property damage to others. A contractor floods a client’s basement while installing a fixture, or a mover damages a hallway in a condo building.
• Products and completed operations. A product you sold, or work you finished, later causes injury or damage. For trades and manufacturers, this part is often one of the most important.
• Personal and advertising injury. Claims such as libel, slander or certain advertising-related allegations, depending on the policy wording.
• Defence costs. Lawyers, investigations and court costs to defend a covered claim, even when the claim turns out to have no merit. How defence costs relate to the limit depends on the policy.
• Medical payments. Some policies include a small amount for medical expenses of people injured on your premises, regardless of fault.

Many policies also include tenant’s legal liability, which can respond if you damage the premises you rent, for example through a fire. Limits and conditions for this coverage vary, so check it against your lease.

What does general liability usually not cover?

Exclusions are where most surprises happen. Common examples include:

• Your own property. Your building, equipment, tools, inventory and improvements are typically insured under commercial property insurance, not CGL.
• Injuries to your own employees. These are usually excluded because workplace injuries are meant to be handled through WSIB. WSIB describes its coverage as no-fault workplace insurance that protects employers from costly court settlements.
• Vehicles. Claims arising from owning or using cars, vans and trucks are usually excluded. In Ontario, all motorists are legally required to have auto insurance, and business vehicles are typically insured on an auto policy.
• Professional mistakes. Financial loss caused by your advice, designs, reports or professional services is typically handled by professional liability insurance, also called errors and omissions.
• Faulty workmanship itself. CGL may respond to damage your work causes to other property, but the cost of redoing your own defective work is commonly excluded.
• Intentional acts and contractual penalties. Deliberate harm is generally not covered, and liability you take on only by contract may be limited, depending on the wording.
• Pollution, cyber and abuse claims. These are frequently excluded or restricted, and are often covered under separate policies or endorsements.

How does CGL compare with other business policies?

Type of claim or loss	Typically handled by
Customer injured on your premises	Commercial general liability
Damage to a client’s property during your work	Commercial general liability
Fire damage to your own equipment or inventory	Commercial property
Worker injured on the job	WSIB, where coverage applies
Accident involving a business vehicle	Commercial auto
Client loses money because of your advice	Professional liability (E&O)
Data breach or ransomware attack	Cyber insurance
Claim larger than your CGL limit	Umbrella or excess liability

The exact split depends on your policies and endorsements. A broker can confirm which policy would respond to the risks you care about most.

Who usually needs CGL coverage in Ontario?

No general Ontario law requires every business to buy CGL. In practice, almost any business that deals with the public, visits client sites or rents commercial space should at least consider it. Businesses that are often asked for proof include:

• Contractors and trades working in homes, offices and construction sites
• Retailers, restaurants and cafes with customers on the premises
• Event vendors, caterers and anyone renting a venue
• Manufacturers, distributors and importers whose products reach the public
• Consultants and service providers who meet clients at the client’s location

Even home-based or online businesses can face liability claims, for example when a courier is injured at the door or a product causes harm after delivery.

Why do landlords and clients ask to be an additional insured?

Many contracts ask you to add the landlord, client or general contractor as an additional insured on your CGL policy. This typically extends some of your liability coverage to them for claims arising from your operations, subject to the endorsement wording. It is different from simply receiving a certificate of insurance, which is proof that your coverage exists.

Contracts may also ask for a waiver of subrogation, a specific minimum limit or notice of cancellation. These usually require changes to the policy itself, so send the full insurance clause to your broker before you sign.

How are CGL limits and deductibles set?

CGL policies usually show a per occurrence limit (the most the policy pays for one incident) and an aggregate limit (the most it pays in total during the policy term). Some limits apply separately to products and completed operations. A deductible may apply to property damage claims.

If a lease or contract requires a higher limit than your CGL provides, an umbrella policy can add extra liability limits on top. The premium for any of this depends on your industry, revenue, claims history, location and the limits you choose, so there is no single price that fits every business.

What should I check before buying or renewing CGL?

Before you buy, or at each renewal, go through this short list:

• Describe your operations accurately. Coverage is typically based on the business activities you declare. New services, new locations or subcontracted work should be disclosed.
• Compare limits against your contracts. Gather every lease and client agreement that mentions insurance.
• Read the exclusions and endorsements. Ask what is specifically excluded for your industry.
• Check products and completed operations. If you make, sell or install anything, make sure this part fits your work.
• Look for gaps. Ask which risks need separate coverage, such as professional liability, cyber, pollution or vehicles.

In Ontario, general insurance brokers are licensed and regulated by the Registered Insurance Brokers of Ontario (RIBO). A licensed broker can compare policy wordings from different insurers and explain the exclusions in plain terms. You can also read our overview of commercial general liability insurance for the main coverage points.

Get matched with a licensed Ontario broker

CommercialInsurance.ca is a free referral service, not an insurer or broker. Tell us about your business and we will connect you with a licensed Ontario broker, regulated by RIBO, who follows up within 24 hours to review your liability risks and contract requirements.

Frequently asked questions

Is commercial general liability insurance mandatory in Ontario?

No general Ontario law requires every business to carry CGL insurance. In practice, many landlords, clients, venues and general contractors require it in their contracts, often at a stated minimum limit. If you rent space or work at other people's sites, expect to be asked for proof of coverage.

Does CGL insurance cover damage to my own equipment or building?

Generally, no. CGL is third party coverage, meaning it responds to claims made against you by others. Your own building, equipment, inventory and tenant improvements are usually insured under a commercial property policy instead.

Does general liability cover an employee who gets hurt at work?

Usually not. Injuries to your own workers are typically excluded from CGL because they are meant to be handled through WSIB, which describes its coverage as no-fault workplace insurance that protects employers from costly court settlements. If your business is not required to register, ask a broker how employee injuries would be handled.

What is the difference between general liability and professional liability?

General liability is aimed at physical harm: bodily injury and property damage. Professional liability (errors and omissions) is aimed at financial loss caused by your advice, design or professional services. Many service businesses carry both because the two policies respond to different kinds of claims.

How do I know what limit of CGL coverage I need?

Start with your contracts, because leases and client agreements often state a minimum limit. Then consider your industry, the size of the projects or premises involved and how severe a claim could be. A licensed Ontario broker can review those factors with you, and CommercialInsurance.ca can connect you with one for free.

This article is general information, not insurance or legal advice. Coverage depends on the policy wording. Speak with a licensed broker or advisor about your situation.